Tesla CEO Says New Models, Loans On Track
Author: White, Joseph B
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Feb 2012: n/a.
ProQuest document link
Abstract:
Tesla's Model X announcement comes amid signs of trouble for the electric car industry in the U.S. Earlier this week, Fisker Automotive Inc. disclosed that the Energy Department had halted the company's efforts to draw more money from a $529 million loan granted under an Obama administration program to spur development of electric and plug-in hybrid vehicles.
Full text: Tesla Motors Inc. Chairman and Chief Executive Elon Musk said Thursday his luxury electric car company is in compliance with terms of its loans from the federal government, and on schedule to launch two new models by the end of next year.
"We have a lot of cash in the bank," Mr. Musk said in an interview ahead of the scheduled unveiling Thursday evening of a prototype of a third Tesla model, a sport utility vehicle called the Model X, to launch at the end of 2013.
The Model X, a midsize, all-wheel drive SUV, will be designed to travel about 270 miles on a charge, Mr. Musk said. Tesla will soon unveil a new system for rapidly recharging its cars at highway rest stops and service stations to address concerns about range, he added.
Tesla's Model X announcement comes amid signs of trouble for the electric car industry in the U.S.
Earlier this week, Fisker Automotive Inc. disclosed that the Energy Department had halted the company's efforts to draw more money from a $529 million loan granted under an Obama administration program to spur development of electric and plug-in hybrid vehicles. In a statement, the Energy Department said it had frozen the Fisker loan because the company had missed certain deadlines in its plan to build a plug-in gas-electric hybrid at a former General Motors Co. factory in Delaware.
Tesla's Mr. Musk said his company's plan to use federal loans to build an all-electric Model S sedan at a former GM-Toyota Motor Corp. factory in Fremont, Calif. is on track to meet a previously promised July 2012 launch.
"I assure you Tesla will not be a problem," he said.
Investors appear to share Mr. Musk's optimism. Tesla shares have risen by more than 40% since mid-January, and closed Thursday at $32.58, up 2%, or 65 cents.
The Obama administration approved a $465 million federal loan for Tesla in June 2009, the bulk of the money aimed at financing engineering of the Model S and tooling of the assembly factory.
Mr. Musk said Tesla expects to draw down all of the money remaining in that loan within the next three or four months, as production of the Model S ramps up.
"We have 8,000 deposits for the Model S," he said. If a customer gave Tesla a $5,000 deposit for a Model S today, the car would likely be delivered in March 2013, he said.
Mr. Musk said he's not concerned by the sluggish demand for electric and plug-in hybrid cars currently on the market, such as the Nissan Leaf and Chevrolet Volt.
"It's a mistake to draw parallels between electric vehicles," Mr. Musk said. The Model S, which will start at about $50,000 and range up to $100,000, isn't positioned to compete with mass market brands such as Chevrolet, he said.
"Buyers for a Model S are buyers who would have otherwise bought an Audi A6... a Mercedes E class... or a BMW 5 and 7 series," he said. "It's got nothing to do with electric cars. It's, "Are we a better choice for a premium sedan?"
Write to Joseph B. White at joseph.white@wsj.com
Credit: By Joseph B. White
Subject: Electric vehicles; Automobile industry
People: Musk, Elon
Product name: Chevrolet Volt, Audi A6
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2012
Publication date: Feb 10, 2012
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 920737495
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/920737495?accountid=7117
Copyright: (c) 2012 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-18
Database: The Wall Street Journal
Tesla Takes Luxurious Route to the Electric Car
Author: White, Joseph B
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Mar 2012: n/a.
ProQuest document link
Abstract:
Once Mr. Guillen, the Tesla Motors Ltd. manager in charge of readying the Model S for launch by July, gets some running room, he hits the electric car's accelerator. [...] the Model S, ranging in price from a $49,900 base model (after a $7,500 federal tax credit), to a $97,900 "Signature Performance" model, extends Mr. Musk's bet that the best way to make electric cars a mainstream product is to follow the path taken by cellphones, video recorders and computers:
Full text: Palo Alto, Calif.
Jerome Guillen wants to gun a prototype Tesla Model S up a steep, twisty road on the outskirts of Silicon Valley, but a Porsche blocks his way.
Once Mr. Guillen, the Tesla Motors Ltd. manager in charge of readying the Model S for launch by July, gets some running room, he hits the electric car's accelerator. With only a soft rumble from the tires, the Tesla lunges up the steep curving road as effortlessly as any petroleum-fueled German machine.
The Tesla Model S and a Porsche 911 represent opposite poles of the automotive universe. The 911 is the peak of internal-combustion sports cars. The engine growls. The dashboard dials dance as the gears shift.
The Model S is something else.
The dashboard is dominated by a vertically oriented, 17", high-definition screen--an iPad on steroids. Mr. Guillen says drivers will be able to download apps and news with a mobile link, and the exterior is sleek and aerodynamic, with narrow headlights and a glass, "panorama" roof.
The prototype's interior is trimmed in a subdued, dark lacewood. There is room to comfortably seat as many as five adults, plus two small children in optional rear-facing jump seats. Rear legroom is surprisingly ample, since the electric motors are mounted behind the rear axle and the 1,000-pound battery is merged flat into the floor. And with no engine noise, the Model S rolls with a quiet coolness.
But a Porsche and a Tesla Model S are alike in one important way. They are both luxury cars, priced well above most of the cars sold by mass-market brands such as Chevrolet, Ford or Toyota.
The goal of making an affordable electric car is one rationale for the Obama administration's 2009 decision to grant Tesla a $465 million federal loan. The co-founder and chief executive of Tesla, Elon Musk, says he still intends to make a car he can sell for $30,000--close to the average price of a new car today.
The Model S isn't that car.
Instead, the Model S, ranging in price from a $49,900 base model (after a $7,500 federal tax credit), to a $97,900 "Signature Performance" model, extends Mr. Musk's bet that the best way to make electric cars a mainstream product is to follow the path taken by cellphones, video recorders and computers: Start by selling expensive gear to enthusiasts, and get them to finance the breakthroughs that make the technology affordable for the masses.
An affluent audience appears to be taking Tesla up on the first part of that formula. Tesla said in its annual report that it held more than $90 million in deposits for Model S sedans, and $1.8 million in deposits for Roadsters as of the end of 2011. The total amount of deposits was up $61 million from a year earlier, the company said.
It got its Fremont, Calif. factory for cheap from a failed joint venture between General Motors Co. and Toyota Motor Corp., and It stocked it with production equipment bought for pennies on the dollar from industry fire sales during the recession. It is now turning out "Beta" versions of the Model S and executives last week said the July launch is on schedule.
Mr. Musk says production is sold out through March 2013.
One of those with a deposit down--two, in fact--is Marcus Frasier, CEO of Idle Media Inc. of Leesport, Pa., a company that owns several online-music and social-gaming franchises.
Mr. Frasier says he and his wife own a trio of Audis: an A6 sedan, a Q5 sport utility and an R8 sports car. But he is attracted to the idea of freeing himself from fossil fuels, and to the high-tech style of the Model S and the recently announced Tesla Model X sport utility, due on the market late next year or early 2014. Mr. Frasier says he put down $40,000 deposits to get one of each.
"The big thing for me was the performance and the technology in it," Mr. Frasier says. "You hand me a car with a big old iPad in it, I am all over it."
Larry Chanin, a retired utility-company engineering manager who lives in Sarasota, Fla., says he had a deposit down on a Chevy Volt, when: "I discovered the Model S and it was instant lust." When Tesla brought a prototype to the Sarasota Yacht Club, he put down a $5,000 deposit. That smaller deposit means he'll be behind "signature" customers and owners of Tesla's earlier Roadster in line. Mr. Chanin says he is trying to form a Florida Tesla owners club.
The electric-vehicle cause, supported with billions of dollars in federal loans, tax subsidies and other forms of public aid, has suffered tough hits in recent weeks. GM last week shut down production of its plug-in hybrid Chevrolet Volt for five weeks after sales fell far short of expectations, despite rising fuel prices. The Volt also got a black eye when federal safety regulators raised alarms that the car's batteries could catch fire--concerns GM addressed by installing additional protection.
Nissan Motor Co. sold on average just 577 in each of the first two months of the year of its all-electric Leaf. And Fisker Automotive Inc., maker of the luxury plug-in hybrid Karma, has suffered a series of blows, such as being denied further funding under a Department of Energy loan after falling behind schedule in its effort to develop a U.S.-made sedan that would compete with the Model S. A Fisker spokesman says the company has raised $262 million toward a $400 million goal and expects to close it by month's end.
Tesla has had troubles of its own, catching a volley of flak last month over charges that it failed to properly warn some early Roadster customers that their cars' batteries would die--or "brick"--if left uncharged too long.
"It's a complete red herring," Tesla Chief Technology Officer JB Straubel says of the battery "bricking" flap. He says the Model S is designed "so you can drive it until it stops, and then you can wait a month to plug it in." If customers allow, Tesla has systems to enable remote monitoring of the battery so service technicians could alert the owner if the car is in danger.
Mr. Musk said on a recent conference call that the company is working to set up leasing and financing programs to make Teslas easier to own. He is also working on a plan to install fast chargers along major highways.
In Tesla's factory, presses and molding machines and welding robots are still in testing mode. To save money, manufacturing vice president Gilbert Passin says, Tesla programs its robots to do multiple jobs, and uses low-tech solutions, such as red push carts to move car bodies instead of conveyor belts.
Keeping the factory frugal is one way in which Tesla hopes to survive even if sales volumes remain relatively low. Another is doing high-tech engineering work for larger auto makers such as Daimler AG or Toyota. Porsche uses a similar strategy.
"It's pretty cool driving with no tailpipe," says J. Craig Venter, the biotechnology entrepreneur and a Roadster owner. Mr. Venter says he is in line for a Model S because he wants an electric car he can drive from his institute's campus in San Diego to Los Angeles, and bring some other people along. The Model S will join a collection that includes some motorcycles and a 2006 Aston Martin convertible, Mr. Venter says.
The Aston "doesn't get great gas mileage," he says. But "it sounds great."
Write to Joseph B. White at joseph.white@wsj.com
Credit: By Joseph B. White
Subject: Automobile industry; Video recorders
Product name: Porsche 911, Chevrolet Volt
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2012
Publication date: Mar 27, 2012
column: Eyes on the Road
Section: Autos
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 945024680
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/945024680?accountid=7117
Copyright: (c) 2012 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-19
Database: The Wall Street Journal
Home & Digital -- Eyes on the Road: Tesla Takes Luxurious Route to the Electric Car
Author: White, Joseph B
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 Mar 2012: D.3.
ProQuest document link
Abstract:
[...] the Model S, ranging in price from a $49,900 base model (after a $7,500 federal tax credit), to a $97,900 "Signature Performance" model, extends Mr. Musk's bet that the best way to make electric cars a mainstream product is to follow the path taken by cellphones, video recorders and computers: The Volt also got a black eye when federal safety regulators raised alarms that the car's batteries could catch fire -- concerns GM addressed by installing additional protection.\n
Full text: Palo Alto, Calif. -- Jerome Guillen wants to gun a prototype Tesla Model S up a steep, twisty road on the outskirts of Silicon Valley, but a Porsche blocks his way.
Once Mr. Guillen, the Tesla Motors Ltd. manager in charge of readying the Model S for launch by July, gets some running room, he hits the electric car's accelerator. With only a soft rumble from the tires, the Tesla lunges up the steep curving road as effortlessly as any petroleum-fueled German machine.
The Tesla Model S and a Porsche 911 represent opposite poles of the automotive universe. The 911 is the peak of internal-combustion sports cars. The engine growls. The dashboard dials dance as the gears shift.
The Model S is something else.
The dashboard is dominated by a vertically oriented, 17", high-definition screen -- an iPad on steroids. Mr. Guillen says drivers will be able to download apps and news with a mobile link, and the exterior is sleek and aerodynamic, with narrow headlights and a glass, "panorama" roof.
The prototype's interior is trimmed in a subdued, dark lacewood. There is room to comfortably seat as many as five adults, plus two small children in optional rear-facing jump seats. Rear legroom is surprisingly ample, since the electric motors are mounted behind the rear axle and the 1,000-pound battery is merged flat into the floor. And with no engine noise, the Model S rolls with a quiet coolness.
But a Porsche and a Tesla Model S are alike in one important way. They are both luxury cars, priced well above most of the cars sold by mass-market brands such as Chevrolet, Ford or Toyota.
The goal of making an affordable electric car is one rationale for the Obama administration's 2009 decision to grant Tesla a $465 million federal loan. The co-founder and chief executive of Tesla, Elon Musk, says he still intends to make a car he can sell for $30,000 -- close to the average price of a new car today.
The Model S isn't that car.
Instead, the Model S, ranging in price from a $49,900 base model (after a $7,500 federal tax credit), to a $97,900 "Signature Performance" model, extends Mr. Musk's bet that the best way to make electric cars a mainstream product is to follow the path taken by cellphones, video recorders and computers: Start by selling expensive gear to enthusiasts, and get them to finance the breakthroughs that make the technology affordable for the masses.
An affluent audience appears to be taking Tesla up on the first part of that formula. Tesla said in its annual report that it held more than $90 million in deposits for Model S sedans, and $1.8 million in deposits for Roadsters as of the end of 2011. The total amount of deposits was up $61 million from a year earlier, the company said.
Mr. Musk says production is sold out through March 2013.
One of those with a deposit down -- two, in fact -- is Marcus Frasier, CEO of Idle Media Inc. of Leesport, Pa., a company that owns several online-music and social-gaming franchises.
Mr. Frasier says he and his wife own a trio of Audis: an A6 sedan, a Q5 sport utility and an R8 sports car. But he is attracted to the idea of freeing himself from fossil fuels, and to the high-tech style of the Model S and the recently announced Tesla Model X sport utility, due on the market late next year or early 2014. Mr. Frasier says he put down $40,000 deposits to get one of each.
"The big thing for me was the performance and the technology in it," Mr. Frasier says. "You hand me a car with a big old iPad in it, I am all over it."
Larry Chanin, a retired utility-company engineering manager who lives in Sarasota, Fla., says he had a deposit down on a Chevy Volt, when: "I discovered the Model S and it was instant lust." When Tesla brought a prototype to the Sarasota Yacht Club, he put down a $5,000 deposit. That smaller deposit means he'll be behind "signature" customers and owners of Tesla's earlier Roadster in line. Mr. Chanin says he is trying to form a Florida Tesla owners club.
The electric-vehicle cause, supported with billions of dollars in federal loans, tax subsidies and other forms of public aid, has suffered tough hits in recent weeks. GM last week shut down production of its plug-in hybrid Chevrolet Volt for five weeks after sales fell far short of expectations, despite rising fuel prices. The Volt also got a black eye when federal safety regulators raised alarms that the car's batteries could catch fire -- concerns GM addressed by installing additional protection.
Tesla has had troubles of its own, catching a volley of flak last month over charges that it failed to properly warn some early Roadster customers that their cars' batteries would die -- or "brick" -- if left uncharged too long.
"It's a complete red herring," Tesla Chief Technology Officer JB Straubel says of the battery "bricking" flap. He says the Model S is designed "so you can drive it until it stops, and then you can wait a month to plug it in." If customers allow, Tesla has systems to enable remote monitoring of the battery so service technicians could alert the owner if the car is in danger.
Mr. Musk said on a recent conference call that the company is working to set up leasing and financing programs to make Teslas easier to own. He is also working on a plan to install fast chargers along major highways.
In Tesla's Fremont, Calif., factory, presses and molding machines and welding robots are still in testing mode. To save money, manufacturing vice president Gilbert Passin says, Tesla programs its robots to do multiple jobs, and uses low-tech solutions, such as red push carts to move car bodies instead of conveyor belts.
Keeping the factory frugal is one way in which Tesla hopes to survive even if sales volumes remain relatively low. Another is doing high-tech engineering work for larger auto makers such as Daimler AG or Toyota. Porsche uses a similar strategy.
"It's pretty cool driving with no tailpipe," says J. Craig Venter, the biotechnology entrepreneur and a Roadster owner. Mr. Venter says he is in line for a Model S because he wants an electric car he can drive from his institute's campus in San Diego to Los Angeles, and bring some other people along. The Model S will join a collection that includes some motorcycles and a 2006 Aston Martin convertible, Mr. Venter says.
The Aston "doesn't get great gas mileage," he says. But "it sounds great."
Credit: By Joseph B. White
Subject: Automobile industry; Luxury automobiles; Electric vehicles
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Product name: Porsche 911, Chevrolet Volt
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: D.3
Publication year: 2012
Publication date: Mar 28, 2012
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: Feature
ProQuest document ID: 948214232
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/948214232?accountid=7117
Copyright: (c) 2012 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission .
Last updated: 2017-11-19
Database: The Wall Street Journal
Tesla Readies New Electric Sports Car
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 May 2012: n/a.
ProQuest document link
Abstract:
The launch of its new vehicle will be the key test of whether Tesla can become an established auto maker. Since mid-2009, Tesla has reported losses of more than $500 million.
Full text: Tesla Motors Inc., the Silicon Valley electric car startup, said on Tuesday it would begin delivering its Model S sports car on June 22.
The all-aluminum body Model S is expected to be priced starting at $57,400, giving the Palo Alto, Calif., company a vehicle that could sell in higher volumes than its existing Roadster, which costs about $109,000.
The vehicle is being produced in a retrofitted section of a former Toyota Motor Corp. and General Motors Co. joint venture in Fremont, Calif. Tesla said it has 10,000 reservations for customers hoping to buy a Model S, which with accessories and battery upgrades can run to more than $100,000. It collects $5,000 from potential buyers to reserve the vehicles.
The launch of its new vehicle will be the key test of whether Tesla can become an established auto maker. Since mid-2009, Tesla has reported losses of more than $500 million. It has plans for third vehicle, a sport-utility vehicle called the Model X, to start production in late 2013.
Some other electric vehicle start-ups have already closed their doors, such as Azure Dynamics Inc. and Bright Automotive Inc. Tesla sold shares to the public in 2010 and despite continued losses, Wall Street analysts are bullish on the company. Of 13 equity analysts that have a rating on its stock, 10 suggest buying it. One rates the stock a "hold" while two recommend selling it.
Tesla shares were trading at $31.09, up more than 8%, in afternoon trading on Tuesday. Since Jan. 1, the stock is up about 14%.
In addition to making its own cars, Tesla has deals to supply Daimler AG and Toyota Motor Corp. with battery packs and power trains for electric vehicles, giving it a second revenue stream.
Tesla was awarded $465 million in loans from the U.S. Department of Energy, and drawn about $360 million from that total so far. The money was used to finance 80% of the costs to develop the Model S and to retrofit the factory in Fremont.
The terms of Tesla's loans were amended in February of this year and now require the company to keep enough money set aside so it can make principal and interest payments on its government loan through June 15 of 2013.
Write to Mike Ramsey at
Credit: By Mike Ramsey
Subject: Automobile industry; Losses; Research & development--R & D; Electric vehicles
Location: Palo Alto California
Company / organization: Name: General Motors Corp; NAICS: 333415, 336111, 336399; Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110; Name: Daimler AG; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999; Name: Department of Energy; NAICS: 926130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2012
Publication date: May 22, 2012
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1015165120
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1015165120?accountid=7117
Copyright: (c) 2012 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-19
Database: The Wall Street Journal
Tesla Model S: A Spaceship of a Car; The silent car equipped with high-performance gear. This spaceship of a car is something to be quite fond of, says Dan Neil.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 July 2012: n/a.
ProQuest document link
Abstract: None available.
Full text: This week's test car is Tesla Model S, 'a hard-core amazing car,' says Dan Neil.
The model S (base price: $49,900) is powered by a 416-horsepower AC synchronous electric motor producing 443 pound-feet of torque between zero and 5,550 rpm, with a zero-to-60-mph acceleration of 4.4 seconds and a quarter-mile elapsed time of 12.6 seconds.
'The Model S is the most impressive feat of American industrial engineering,' says Mr. Neil.
'In the dreamily quiet Tesla Model S, when you hit fast-forward, the film speeds up but the soundtrack doesn't really get much louder. The pitch of the electric whine goes up, the suspension sinks down, but compared with an internal-combustion sports car--quaint thing that it is now--this car slips silently as a dagger into triple-digit speed,' says Mr. Neil
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2012
Publication date: Jul 6, 2012
Section: Life and Style
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1023758898
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1023758898?accountid=7117
Copyright: (c) 2012 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-19
Database: The Wall Street Journal
I Am Silent, Hear Me Roar; It doesn't snarl like a Lamborghini, but Tesla's new Model S is no eat-your-broccoli all-electric car, says Dan Neil--more like eat-up-the-pavement-while-grinning-ear-to-ear
Author: Neil, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 July 2012: n/a.
ProQuest document link
Abstract:
The Signature Performance model is powered by a 416-horsepower AC synchronous electric motor producing 443 pound-feet of torque between zero and 5,100 rpm, with a zero-to-60-mph acceleration of 4.4 seconds and a quarter-mile elapsed time of 12.6 seconds. [...]the uniquely un-sourceable Model S has obliged Tesla to do much of the car's subassembly in-house, including all of the aluminum body and chassis stampings, most of the injection-molded plastic, the traction motor, battery pack, and more.
Full text: THIS TESLA MODEL S thing you've heard so much about? You know, all-electric sedan, Silicon Valley, that guy from SpaceX? This is one amazing car. I mean, hard-core amazing. But first and foremost, gentle reader, it goes like the very stink of hell. Fifty-to-100-mph acceleration in the $97,900 Signature Performance model I drove is positively Lambo-like and...wait, let's stop right there:
People who like fast cars are sensualists. And screaming up through the gears of an Italian sports car--getting that flit and loft in the belly, tasting the saliva of speed--is a pleasurable and addictive sensation. They don't call it dopamine for nothing.
Unfortunately, in a car like a Lambo, other people can hear you being stupid for miles around. At full tilt, those cars are like civil-defense sirens, if civil-defense sirens alerted you to the presence of awful men in gold watches and track suits. It's embarrassing.
But in the dreamily quiet Tesla Model S, when you hit fast-forward, the film speeds up but the soundtrack doesn't really get much louder. The pitch of the electric whine goes up, the suspension sinks down, but compared with an internal-combustion sports car--quaint thing that it is now--this car slips silently as a dagger into triple-digit speed. You can cut traffic to bits in this thing and never draw the jealous ire of your fellow motorists.
The Signature Performance model is powered by a 416-horsepower AC synchronous electric motor producing 443 pound-feet of torque between zero and 5,100 rpm, with a zero-to-60-mph acceleration of 4.4 seconds and a quarter-mile elapsed time of 12.6 seconds. The SP package is equipped with a high-capacity drive inverter and twin 10-kilowatt-hour charging inverters for rapid recharge (about four hours). It should come equipped with a lawyer. You're going to need one.
The Model S--indeed, high-performance electric vehicles in general--will take some getting used to, even a new vocabulary. We currently don't have a good term for EVs' distinctive concentration of mass, with batteries slung low as possible and centroid to the vehicle. While traction batteries are heavy, and mass is bad for acceleration and agility, the lower center-of-gravity often compensates with higher levels of cornering, especially when a car wears rubber like the Signature Performance edition's sticky 21-inch summer tires. How about "corner-levering mass"?
Whatever, the Tesla's got it in spades. The car's flat, floorpan-mounted battery pack (85 kWh) accounts for about 30% of the significant total vehicle weight, 4,642 pounds. And yet, with a C-of-G comparable to that of a Ford GT supercar, the Tesla corners like it's tethered with magic. What do you call that?
I'm not going to dwell much on the back story. Elon Musk, creator of PayPal and chief executive of civilian rocketry firm SpaceX, took over Tesla in 2008 and proceeded to promise the moon and the stars for the Model S, an all-electric premium full-size sedan with up to seven seats, a claimed 300-mile range, and a base price, counting the federal $7,500 EV tax credit, of $49,900.
At the time, Tesla was building, rather badly, small numbers of the all-electric Roadster, which was based on a modified Lotus chassis, and losing money like mad. In terms of mass-production car building, Tesla didn't have a stick in the ground three years ago. And here we now are, looking at the Model S, which, if everything works as advertised--something I couldn't discern in an hour-plus test drive in Los Angeles last week--would rank among the world's best cars.
Tesla had a little luck along the way. The 2009 acquisition of the Toyota/General Motors joint venture plant in Fremont, Calif., came with a very nice paint shop, idle stamping machines and many other production resources. It also helped that at the time the domestic car business was holding a yard sale on manufacturing equipment.
Still, the uniquely un-sourceable Model S has obliged Tesla to do much of the car's subassembly in-house, including all of the aluminum body and chassis stampings, most of the injection-molded plastic, the traction motor, battery pack, and more. These folks are casting their own aluminum chassis nodes, for heaven's sake.
The outcome of Mr. Musk's grand experiment in vertical integration is far from certain. But the car is dope.
At 196 inches in length, the Model S is a large car that exploits the benefits of purpose-built EV design. The hood is sleekly low--no internal-combustion engine to conceal--and the cabin floor is flat, thanks to the rear-mounted electric motor. Without an IC engine up front, the Model S doesn't have to accommodate a big radiator. The car's sultry front clip conceals three small heat exchangers to cool the battery/power electronics and two condensers. The lateral lower grille intakes feature active shutters to close when extra cooling isn't needed.
Stylistically, the Model S has something of the sinuous, languid form of a Jaguar XF, one left in the sun too long. Note the brilliant bow of brightwork around the window openings and chrome spear between the taillights. At the bidding of the Model S's key fob, the door handles pop out from the bodywork and then retract flush with the bodywork when everyone's aboard. The car's B-pillars are trimmed with black-glass panels that look stunning when paired with the panoramic glass roof, and taken as a whole, seen in the California sun, the Model S is a glowing, glassine tranche of well-heeled wickedness.
Useful, too. The front section of the car--the abandoned engine bay, if you will--provides a 5.3-cubic-foot stowage area, which Tesla calls the "frunk." The rear hatch encloses a relatively vast 26.3 cubic feet or more than 50 cubes with the seats down. The Model S also offers optional and quite novel kids' jump seats, for seven-passenger seating, though about that I remain dubious.
With a structural monocoque almost entirely of riveted, extruded or cast aluminum--with a sprinkling of high-strength steel--the Model S's lightweight construction is in line with and not radically different than high-end car makers such as Ferrari and Mercedes-Benz. Uniquely, the Tesla's battery pack, less than 5 inches thick and the size of a coffee table, bolts to the bottom of the car, increasing structural rigidity and forming the car's aero-optimized flat underbody. Tesla believes the Model S is the most aerodynamic road car in the world, with a 0.24 coefficient of drag, and has the most rigid car chassis in the world. Nice bit of engineering, that.
Out on the street, suspended with the speed-adaptive air suspension, the Model S has an utterly unshakable, gantry-like vibe to it, even with the big meats in the wheel wells. And yet, given the constraints of our test drive, I can't really describe the car's handling. I'll need at least three months to be sure.
The Model S offers a choice of three battery packs: 40, 60 and 85 kWh capacity, corresponding to a highway range/acceleration of 160 miles/6.5 seconds, 230/5.9 seconds, and 300/5.6 seconds, respectively. The Signature Performance edition couples the biggest battery with those twin power inverters and hotter software.
The Tesla's battery pack (more than 7,000 Panasonic nickel-cathode lithium-ion 18650 cells) are warrantied for eight years and 100,000, 125,000 or unlimited miles, depending on pack size.
The other inimitable flourish is the car's huge, 17-inch capacitive touch-screen console, a glass-panel interface handling vehicle, climate, audio and vehicle functions. It's the attack of the iPhone, if you like. This is the one stumble in the Model S's draftsmanship. While this panel works beautifully--the navigation map display is especially nice--the display is embedded rather gracelessly into the leather-and-carbon trim dash.
So, fittingly, it's a spaceship. The Model S is the most impressive feat of American industrial engineering since, well, a couple of months ago, when Mr. Musk's SpaceX successfully launched and recovered a spacecraft that rendezvoused with the international space station.
Don't get me wrong. I'm prepared for disappointment. The thing could burst into flames or be found to cause cancer of the nether regions. But right now, I have to say, I'm fairly fond of it.
Email Dan at .
More Ways to Do the Electric Slide
Tesla is far from the only outfit making 100%-electron-powered hardware--just check out this Japanese compact, German sport coupe and one of the world's fastest motorcycles
Honda Fit EV
The Fit EV is the car the Fit always wanted to be. What a perfect candidate for an electric-vehicle retrofit: light, fun-to-drive, volumetrically efficient, aesthetically challenged. Gutted of its 1.5-liter four and stuffed with 20 kWh of lithium-ion batteries and a 123-horsepower/189 pound-feet AC synchronous motor, the 3,252-pound electric hatch gets a marquee mileage number of 118 mpg-e (gasoline-gallon equivalent), making it the most energy-efficient car in the land.
A couple more metrics: EPA-estimated mixed-driving range of 82 miles; 132-mile range in city driving; three-hour recharge with 240V; 0-60 in about 8.5 seconds with the driver-selectable Sport mode engaged (the other power-mapping modes are Normal and Eco).
But the number to pay attention to is this one: $389. That's the monthly on Honda's three-year lease deal for the Fit EV. Over two years, 1,100 lucky civilians will get to take advantage of the deal, which includes no down payment and free insurance, in select West Coast markets. If you're one of these customers, please, let the leprechaun go and no one will get hurt.
Oh, yes, and I think I'll stand by this: It handles better than the regular Fit, at least in the Rose Bowl parking lot. The Fit EV's weight-to-torque ratio (3,252 pounds moved by 189 lb.-ft.) beats the pants off the regular Fit (2,577/106). So at city-traffic speeds, the thing is interestingly quick. And thanks to the slab of air-cooled, Toshiba-sourced battery sandwiched between the floorboards, the Fit's center of gravity is somewhere around Australia.
Honda is deploying a four-channel electric servo braking system with this car, which is effective but takes getting use to. The antilock kickback is missing, even when the car is standing on its nose. I don't think it's a good idea to unlearn the feel of ABS among consumers. The transmission--the, uh, Forward-Reverse selector--has a B mode for increased regen, mimicking a sporty engine-braking effect.
The only real loss compared with the gas-powered Fit is the rear cabin, which while marginally larger loses the folding/disappearing Magic Seat functions. Sigh. The batteries have to go somewhere, I suppose.
BMW ActiveE
BMW "ActiveE"? It sounds like the special ingredient in foot powder. Trademarking gyrations aside, the ActiveE is the second major electro-retrofit from the Bavarian monarch after the Mini E (2009-12). Based on the 1-series coupe, this is quite a bit more evolved a machine than the Mini E, which piled the batteries where the rear seat usually goes. The EV componentry is decently hidden with the ActiveE, aside from one carpeted hillock in the trunk. Golfers will have to content themselves with par-threes.
BMW leases these e-burners for $2,250 and $499 a month, for two years. But given plans to build a mere 1,100, with 700 allotted to the U.S., you have to be a very special kind of nerd, apparently. BMW wants brand ambassadors.
Weighing in at about 2 tons and motivated by an AC synchronous, 168-hp/184 lb.-ft. e-motor between the rear half-shafts, the ActiveE has plenty of straight-ahead spirit, with 0-60 mpg acceleration in the low-9-second range. But if you've ever driven a 1-series, the dead stinking mass of this thing will sort of break your heart. The 32 kWh liquid-cooled battery pack, fitted rather like a dumbbell along the car's longitudinal axis, and the assorted hardware add about 800 pounds as compared with the weight of a 128i. This puts an elephant squarely on the back of the otherwise lively and flickable 1-series.
It's too early to know what of BMW's Ultimate Driving Machine ethos will translate into electric mobility, but the ActiveE offers some clues. BMW's engineers love tons of regenerative braking--that is, using the drag of the motor, acting as a generator, to slow the car and fluff the batteries. To stop, simply lift your foot off the accelerator and the car will whoa up aggressively without even a touch of brakes. So much for heel-and-toe driving.
As for the brand's renowned steering and brake feel, the electrification of these systems continues to get better. The ActiveE has an alert steering response, good linear weight and on-centeredness. The brakes? Well, that's the pedal on the left. The real test will come when BMW unveils its i3 in 2014, for which the ActiveE can be regarded as almost an engineering mule.
Maybe that one will help my athlete's foot.
Mission R
In its short and exciting life, Mission Motors' ambitions have gone from wanting to be the Tesla of motorcycles to being a "tier-one supplier of advanced electric powertrain technology," which isn't nearly so romantic.
It's kind of a shame, too, since Mission Motors' current technology demonstrator, the not-for-sale Mission R, is a bolt of lightning with handlebars, a horrifyingly quick superbike that last year, just casually and without much effort, came within 10 seconds (1:31) of Casey Stoner's fastest lap at Laguna Seca during a MotoGP event. And last week, your humble narrator lined the Mission R up on Sears Point's quarter-mile track, put my head down and pinned the rheostat, whereupon the bike dispatched an effortless 10.3-second ET. Hunnn, wheeee, woooosh! Over. With a little more practice, I could have gotten the bike into the mid-9's, which would put the Mission R in the ranks of, if not ahead of, the quickest production street bikes in the world.
This is just plainly, cosmically dumbfounding acceleration, on a bike weighing 550 pounds with a 190-pound rider, on nearly hemispherical road-racing tires. Marron.
It helps that the bike's battery pack is situated in a way that keeps the front wheel down (53/47 weight distribution, front/rear). Also, since the Mission R doesn't have to shift gears--a single 9:1 reduction gear is all that stands between the 161-hp/115 lb.-ft. motor and the drive sprocket--the bike's quarter-mile behavior is marked by wildly uninterrupted torque.
The 42 employees at Mission have about $15 million in working capital and are working all sorts of EV angles, from heavy equipment to outdoor power equipment. That said, my plea goes into the universe: Please, let some motorcycle OEM hire these guys to engineer a fully integrated, mainstream EV superbike. The company's rather half-baked demonstrator--with an Android pad for an instrument readout--is already one of the world's great motorcycle experiences. I'd like to see Mission get the rest of the way.
Dan Neil
Credit: By Dan Neil
Subject: Automobile industry; Product introduction
Location: California
People: Musk, Elon
Company / organization: Name: Space Exploration Technologies Corp; NAICS: 336414
Product name: Honda Fit, Jaguar XF
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2012
Publication date: Jul 6, 2012
column: Rumble Seat
Section: Autos
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1023758904
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1023758904?accountid=7117
Copyright: (c) 2012 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-19
Database: The Wall Street Journal
OFF DUTY --- Gear & Gadgets: More Ways to Do the Electric Slide --- Tesla is far from the only outfit making 100%-electron-powered hardware -- just check out this Japanese compact, German sport coupe and one of the world's fastest motorcycles
Author: Neil, Dan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 July 2012: D.2.
ProQuest document link
Abstract:
Gutted of its 1.5-liter four and stuffed with 20 kWh of lithium-ion batteries and a 123-horsepower/189 pound-feet AC synchronous motor, the 3,252-pound electric hatch gets a marquee mileage number of 118 mpg-e (gasoline-gallon equivalent), making it the most energy-efficient car in the land. EPA-estimated mixed-driving range of 82 miles; 132-mile range in city driving; four-hour recharge with 220V; 0-60 in about 8.5 seconds with the driver-selectable Sport mode engaged (the other power-mapping modes are Normal and Eco).
Full text: Honda Fit EV
The Fit EV is the car the Fit always wanted to be. What a perfect candidate for an electric-vehicle retrofit: light, fun-to-drive, volumetrically efficient, aesthetically challenged. Gutted of its 1.5-liter four and stuffed with 20 kWh of lithium-ion batteries and a 123-horsepower/189 pound-feet AC synchronous motor, the 3,252-pound electric hatch gets a marquee mileage number of 118 mpg-e (gasoline-gallon equivalent), making it the most energy-efficient car in the land.
A couple more metrics: EPA-estimated mixed-driving range of 82 miles; 132-mile range in city driving; four-hour recharge with 220V; 0-60 in about 8.5 seconds with the driver-selectable Sport mode engaged (the other power-mapping modes are Normal and Eco).
But the number to pay attention to is this one: $389. That's the monthly on Honda's three-year lease deal for the Fit EV. Over two years, 1,100 lucky civilians will get to take advantage of the deal, which includes no down payment and free insurance, in select West Coast markets. If you're one of these customers, please, let the leprechaun go and no one will get hurt.
Oh, yes, and I think I'll stand by this: It handles better than the regular Fit, at least in the Rose Bowl parking lot. The Fit EV's weight-to-torque ratio (3,277 pounds moved by 189 lb.-ft.) beats the pants off the regular Fit (2,577/106). So at city traffic speeds, the thing is interestingly quick. And thanks to the air-cooled Toshiba-sourced battery pack sandwiched between the floorboard, the Fit's center of gravity is somewhere around Australia.
Honda is deploying a four-channel electric servo braking system with this car, which is effective but takes getting use to. The antilock kickback is missing, even when the car is standing on its nose. I don't think it's a good idea to unlearn the feel of ABS among consumers. The transmission -- the, uh, forward-back selector -- has a B mode for increased regen, mimicking a sporty engine-braking effect.
The only real loss compared with the gas-powered Fit is the rear cabin, which while marginally larger loses the folding/disappearing Magic Seat functions. Sigh. The batteries have to go somewhere, I suppose.
BMW ActiveE
BMW "ActiveE"? It sounds like the special ingredient in foot powder. Trademarking gyrations aside, the ActiveE is the second major electro-retrofit from the Bavarian monarch after the Mini E (2009-12). Based on the 1-series coupe, this is quite a bit more evolved a machine than the Mini E, which piled the batteries where the rear seat usually goes. The EV componentry is decently hidden with the ActiveE, aside from one carpeted hillock in the trunk. Golfers will have to content themselves with par-threes.
BMW leases these e-burners for $2,250 and $499 a month, for two years. But given plans to build a mere 1,100, with 700 allotted to the U.S., you have to be a very special kind of nerd, apparently. BMW wants brand ambassadors.
Weighing in at about 2 tons and motivated by an AC synchronous, 168-hp/184 lb.-ft. e-motor between the rear half-shafts, the ActiveE has plenty of straight-ahead spirit, with 0-60 mpg acceleration in the low-9-second range. But if you've ever driven a 1-series, the dead stinking mass of this thing will sort of break your heart. The 32 kWh liquid-cooled battery pack, fitted rather like a dumbbell along the car's longitudinal axis, and the assorted hardware add about 800 pounds as compared with the weight of a 128i. This puts an elephant squarely on the back of the otherwise lively and flickable 1-series.
It's too early to know what of BMW's Ultimate Driving Machine ethos will translate into electric mobility, but the ActiveE offers some clues. BMW's engineers love tons of regenerative braking -- that is, using the drag of the motor, acting as a generator, to slow the car and fluff the batteries. To stop, simply lift your foot off the accelerator and the car will whoa up aggressively without even a touch of brakes. So much for heel-and-toe driving.
As for the brand's renowned steering and brake feel, the electrification of these systems continues to get better. The ActiveE has an alert steering response, good linear weight and on-centeredness. The brakes? Well, that's the pedal on the left. The real test will come when BMW unveils its i3 in 2014, for which the ActiveE can be regarded as almost an engineering mule.
Maybe that one will help my athlete's foot.
Mission R
In its short and exciting life, Mission Motors' ambitions have gone from wanting to be the Tesla of motorcycles to being a "tier-one supplier of advanced electric powertrain technology," which isn't nearly so romantic.
It's kind of a shame, too, since Mission Motors' current technology demonstrator, the not-for-sale Mission R, is a bolt of lightning with handlebars, a horrifyingly quick superbike that last year, just casually and without much effort, came within 10 seconds (1:31) of Casey Stoner's fastest lap at Laguna Seca during a MotoGP event. And last week, your humble narrator lined the Mission R up on Sears Point's quarter-mile track, put my head down and pinned the rheostat, whereupon the bike dispatched an effortless 10.3-second ET. Hunnn, wheeee, woooosh! Over. With a little more practice, I could have gotten the bike into the mid-9's, which would put the Mission R in the ranks of, if not ahead of, the quickest production street bikes in the world.
This is just plainly, cosmically dumbfounding acceleration, on a bike weighing 550 pounds with a 190-pound rider, on nearly hemispherical road-racing tires. Marron.
It helps that the bike's battery pack is situated in a way that keeps the front wheel down (53/47 weight distribution, front/rear). Also, since the Mission R doesn't have to shift gears -- a single 9:1 reduction gear is all that stands between the 161-hp/115 lb.-ft. motor and the drive sprocket -- the bike's quarter-mile behavior is marked by wildly uninterrupted torque.
The 42 employees at Mission have about $15 million in working capital and are working all sorts of EV angles, from heavy equipment to outdoor power equipment. That said, my plea goes into the universe: Please, let some motorcycle OEM hire these guys to engineer a fully integrated, mainstream EV superbike. The company's rather half-baked demonstrator -- with an Android pad for an instrument readout -- is already one of the world's great motorcycle experiences. I'd like to see Mission get the rest of the way.
(See related article: "OFF DUTY --- Gear & Gadgets: I Am Silent, Hear Me Roar" -- WSJ July 7, 2012)
Credit: By Dan Neil
Subject: Automobile industry; Product introduction; Braking systems; Electric vehicles
Company / organization: Name: Environmental Protection Agency--EPA; NAICS: 924110
Product name: Honda Fit
Classification: 9190: United States; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: D.2
Publication year: 2012
Publication date: Jul 7, 2012
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: Feature
ProQuest document ID: 1023893865
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1023893865?accountid=7117
Copyright: (c) 2012 Dow Jone s & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-19
Database: The Wall Street Journal
Effort to Save Tesla Lab Gets Surprise Web Jolt; Online Donors Give More Than $1 Million to Aid Wardenclyffe Site in Shoreham
Author: Will, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Aug 2012: n/a.
ProQuest document link
Abstract:
[...]more than a century after the renowned scientist and inventor founded the experimental site known as Wardenclyffe in Shoreham, his fans have raised more than $1 million in an effort to save what is left of his Long Island facility: a boarded-up brick building that is the last remaining Tesla laboratory in the world.
Full text: In 1901, visionary Nikola Tesla began building a 187-foot-tall wooden tower on the North Shore of Long Island, dreaming of sending wireless Morse code messages over the Atlantic and even transmitting electricity through the atmosphere.
After experiments two years later--during which nearby residents reported hearing a thunder-like noise and seeing light emanate from the spire--Tesla lost his equipment to creditors and was sued for back taxes. The tower was later demolished with dynamite.
Now, more than a century after the renowned scientist and inventor founded the experimental site known as Wardenclyffe in Shoreham, his fans have raised more than $1 million in an effort to save what is left of his Long Island facility: a boarded-up brick building that is the last remaining Tesla laboratory in the world.
Using the crowdfunding website IndieGoGo.com, the campaign sparked donations from more than 25,000 Tesla supporters in 102 countries, hitting the $1 million mark in nine days and providing a jolt of attention for the long-dead scientist.
The Oatmeal--a humor website featuring comics like "Hammer Pants vs. Hipsters: A Visual Comparison" and quizzes like "How Many Hungry Weasels Could Your Body Feed?"--organized the online campaign, launching it on Aug. 15. It reached its original $850,000 goal in just six days.
The pace of the donations surprised even the beneficiary of the drive--Friends of Science East, the small Long island nonprofit that had tried and failed for 16 years to stir up enough support to preserve the lab and create a museum on the site.
"We didn't imagine it would go this far," said Jane Alcorn, a retired schoolteacher who leads Friends of Science East. "We thought we would be lucky if we got a couple hundred thousand dollars. We were hopeful for that."
Ms. Alcorn said her nonprofit is preparing to make an offer to Agfa-Gevaert Group, the Belgium-based analog and digital imaging company that has owned Wardenclyffe since 1969. The museum supporters envision will include classrooms, a playground and workshops for inventors and tinkerers.
The group is also counting on a $850,000 grant from New York state that can be used for the purchase of the property.
Matthew Inman, the 29-year-old cartoonist behind the Oatmeal, recently published a comic hailing Mr. Tesla as "the greatest geek who ever lived." Tesla fans aware of the tribute to the scientist contacted Mr. Inman hoping that he might be able to assist somehow with the efforts to preserve the Shorham property.
While exceeding its goal, Mr. Inman plans to continue the online fund-raising into late September.
"Every extra penny we get will go to fixing the grounds, building exhibits and turning this land into something worthy of Tesla's awesomeness," he said.
Born of Serbian descent in what is now Croatia, Tesla pioneered the development of the alternating current system for electricity. He became locked in a historic "War of Currents" against Thomas Edison over their competing methods of distributing electricity and was key to harnessing hydroelectric power from Niagara Falls on a large scale. Tesla also is credited with inventing fluorescent lighting as well as components that later made radio and television possible.
The scientist, who was burdened with financial troubles throughout his life, sold Wardenclyffe in 1915. The site was later used to manufacture photographic emulsion until it was abandoned about two decades ago.
The 16-acre property has been on the market for three years and is listed at $1.6 million, said Christopher Santomassimo, Agfa-Gevaert's general counsel, secretary and chief compliance officer.
Ms. Alcorn said her nonprofit struggled to raise funds for much of its history because silver and cadmium were in the soil and groundwater at the historic property due the manufacturing that had gone on there. The effort to preserve the site gained a new urgency this March, when the state declared that an eight-year cleanup of contamination there was complete, and new offers started to come in for property, Ms. Alcorn said.
Agfa-Gevaert is "currently fielding several serious expressions of interest that Agfa believes will result in offers to purchase the property," Mr. Santomassimo confirmed.
Although Tesla died impoverished and alone in a room in the New Yorker Hotel in 1943, his fans have long regarded him as one of the most important creative minds in history--something that they say the popularity of the Wardenclyffe fund-raiser has validated for them.
"This is evidence not only that Tesla is the greatest scientists who ever lived," said Dr. Ljubo Vujovic, president of the Tesla Memorial Society of New York, "but that he is loved all over the world."
Mr. Inman, a resident of Seattle, said the campaign's success is indicative of a new generation of Tesla fans who have helped lift the inventor out of relative obscurity. "Tesla, over the last couple of years on the Internet, has really become this sort of cult icon," he said.
Credit: By Will James
Subject: Fluorescent lighting
Company / organization: Name: Agfa-Gevaert; NAICS: 339112, 333293, 333315
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2012
Publication date: Aug 29, 2012
Section: New York
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1035428551
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1035428551?accountid=7117
Copyright: (c) 2012 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-19
Database: The Wall Street Journal
Property: Effort to Save Tesla Lab Gets Surprise Web Jolt --- Online Donors Give More Than $1 Million to Aid Wardenclyffe Site in Shoreham
Author: Will, James
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Aug 2012: A.20. [Duplicate]
ProQuest document link
Abstract:
[...]more than a century after the renowned scientist and inventor founded the experimental site known as Wardenclyffe in Shoreham, his fans have raised more than $1 million in an effort to save what is left of his Long Island facility: a boarded-up brick building that is the last remaining Tesla laboratory in the world.
Full text: In 1901, visionary Nikola Tesla began building a 187-foot-tall wooden tower on the North Shore of Long Island, dreaming of sending wireless Morse code messages over the Atlantic and even transmitting electricity through the atmosphere.
After experiments two years later -- during which nearby residents reported hearing a thunder-like noise and seeing light emanate from the spire -- Tesla lost his equipment to creditors and was sued for back taxes. The tower was later demolished with dynamite.
Now, more than a century after the renowned scientist and inventor founded the experimental site known as Wardenclyffe in Shoreham, his fans have raised more than $1 million in an effort to save what is left of his Long Island facility: a boarded-up brick building that is the last remaining Tesla laboratory in the world.
Using the crowdfunding website IndieGoGo.com, the campaign sparked donations from more than 25,000 Tesla supporters in 102 countries, hitting the $1 million mark in nine days and providing a jolt of attention for the long-dead scientist.
The Oatmeal -- a humor website featuring comics like "Hammer Pants vs. Hipsters: A Visual Comparison" and quizzes like "How Many Hungry Weasels Could Your Body Feed?" -- organized the online campaign, launching it on Aug. 15. It reached its original $850,000 goal in just six days.
The pace of the donations surprised even the beneficiary of the drive -- Friends of Science East, the small Long island nonprofit that had tried and failed for 16 years to stir up enough support to preserve the lab and create a museum on the site.
"We didn't imagine it would go this far," said Jane Alcorn, a retired schoolteacher who leads Friends of Science East. "We thought we would be lucky if we got a couple hundred thousand dollars. We were hopeful for that."
Ms. Alcorn said her nonprofit is preparing to make an offer to Agfa-Gevaert Group, the Belgium-based analog and digital imaging company that has owned Wardenclyffe since 1969. The museum supporters envision will include classrooms, a playground and workshops for inventors and tinkerers.
The group is also counting on a $850,000 grant from New York state that can be used for the purchase of the property.
Matthew Inman, the 29-year-old cartoonist behind the Oatmeal, recently published a comic hailing Mr. Tesla as "the greatest geek who ever lived." Tesla fans aware of the tribute to the scientist contacted Mr. Inman hoping that he might be able to assist somehow with the efforts to preserve the Shoreham property.
While exceeding its goal, Mr. Inman plans to continue the online fund-raising into late September.
"Every extra penny we get will go to fixing the grounds, building exhibits and turning this land into something worthy of Tesla's awesomeness," he said.
Born of Serbian descent in what is now Croatia, Tesla pioneered the development of the alternating current system for electricity. He became locked in a historic "War of Currents" against Thomas Edison over their competing methods of distributing electricity and was key to harnessing hydroelectric power from Niagara Falls on a large scale. Tesla also is credited with inventing fluorescent lighting as well as components that later made radio and television possible.
The scientist, who was burdened with financial troubles throughout his life, sold Wardenclyffe in 1915. The site was later used to manufacture photographic emulsion until it was abandoned about two decades ago.
The 16-acre property has been on the market for three years and is listed at $1.6 million, said Christopher Santomassimo, Agfa-Gevaert's general counsel, secretary and chief compliance officer.
Ms. Alcorn said her nonprofit struggled to raise funds for much of its history because silver and cadmium were in the soil and groundwater at the historic property due the manufacturing that had gone on there. The effort to preserve the site gained a new urgency this March, when the state declared that an eight-year cleanup of contamination there was complete, and new offers started to come in for property, Ms. Alcorn said.
Agfa-Gevaert is "currently fielding several serious expressions of interest that Agfa believes will result in offers to purchase the property," Mr. Santomassimo confirmed.
Although Tesla died impoverished and alone in a room in the New Yorker Hotel in 1943, his fans have long regarded him as one of the most important creative minds in history -- something that they say the popularity of the Wardenclyffe fund-raiser has validated for them.
"This is evidence not only that Tesla is the greatest scientists who ever lived," said Dr. Ljubo Vujovic, president of the Tesla Memorial Society of New York, "but that he is loved all over the world."
Mr. Inman, a resident of Seattle, said the campaign's success is indicative of a new generation of Tesla fans who have helped lift the inventor out of relative obscurity.
"Tesla, over the last couple of years on the Internet, has really become this sort of cult icon," he said.
Subscribe to WSJ:
Credit: By Will James
Subject: Fund raising; Web sites; Historic preservation
Location: Long Island New York
People: Tesla, Nikola
Company / organization: Name: IndieGoGo Inc; NAICS: 518210; Name: Agfa-Gevaert; NAICS: 339112, 333293, 333315
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.20
Publication year: 2012
Publication date: Aug 29, 2012
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: New spapers
Language of publication: English
Document type: News
ProQuest document ID: 1035504392
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1035504392?accountid=7117
Copyright: (c) 2012 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-19
Database: The Wall Street Journal
Tesla Cuts Revenue Outlook, Unveils Plan to Sell More Shares
Author: White, Joseph B; Langlois, Shawn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Sep 2012: n/a.
ProQuest document link
Abstract:
Luxury electric car maker Tesla Motors Inc., facing a revenue squeeze from production problems, said on Tuesday it would sell about 5 million shares to raise cash after winning breathing room on terms of a $465 million U.S. Energy Department loan.
Full text: Luxury electric car maker Tesla Motors Inc., facing a revenue squeeze from production problems, said on Tuesday it would sell about 5 million shares to raise cash after winning breathing room on terms of a $465 million U.S. Energy Department loan.
Tesla said production of its new Model S electric sedan is running between four and five weeks behind the company's original plan, sending its shares down about 10% to $27.66 in 4 p.m. Nasdaq trading on Tuesday.
The selloff, and the operational and financial problems that Tesla disclosed, are a blow to high-profile co-founder Elon Musk, who led a glitzy unveiling of a new battery charger on Monday, the same day the company got the DOE to amend its loan terms.
Tesla's troubles could prompt more criticism of the Obama administration's green-technology investments. Republicans have made the failure of another Energy Department loan recipient, solar panel maker Solyndra, an exhibit in their election case against President Obama's economic policies.
The Palo Alto, Calif.-based luxury electric-car maker expects an as much as $200 million shortfall in revenue this year as a result of production delays. It projected full-year revenue of between $400 million and $440 million, down from between $560 million and $600 million earlier.
On Monday, it won a waiver on terms of its DOE loan, according to a filing with the Securities and Exchange Commission. The waiver postpones $14.6 million of a loan payment due next month to Feb. 15, revises other scheduled payments and commits to submitting by Oct. 31 a plan to repay the 10-year government loan ahead of schedule.
Deepak Ahuja, Tesla finance chief, said that the company projects it would have about $100 million in cash at the end of the third quarter excluding proceeds from the stock sale. He said that sale, which is scheduled to close on Thursday, should raise about $128 million.
Tesla is currently at its "lowest cash position," but expects to start generating cash from operations by the end of the fourth quarter, Mr. Ahuja said.
The company has about $133.4 million in deposits from would-be customers, some of which would be refundable if the customers cancelled their orders. Mr. Ahuja said that Tesla approached several thousand customers this quarter to get them to commit to cars, and about 1,000 asked for their $5,000 deposits back. But he added the cancellations were more than offset by 2,600 new vehicle reservations.
Mr. Musk, who currently holds about 26% of the electric-car maker's stock, has committed to buying $1 million worth of the shares.
Tesla, in its filing, said that including proceeds from the proposed share offering, it expects to have $228 million in cash, cash equivalents and restricted cash by the end of the month. The company said it plans to cut capital spending by 20% in the third quarter from second quarter levels.
The all-aluminum body Model S is the company's second vehicle and is designed and priced to sell in higher volumes than its existing Roadster, which costs about $109,000. The company earlier had hoped to produce this year 5,000 of the Model S cars, which are priced between $50,000 and $98,000 after federal tax credit.
Tesla didn't provide details of the production problems in its filing. It alluded to concerns about quality and concerns about suppliers as reasons why its Fremont, Calif., factory has produced since June just 255 Model S cars as of Sept. 23.
"Certain suppliers have experienced delays in meeting our demand and we continue to focus on supplier capabilities and constraints," Tesla said.
The U.S. last year suspended payments to another luxury electric car startup, Fisker Automotive Inc., after that company fell behind schedule in its effort to engineer a midsize, plug-in hybrid sedan called the Atlantic that would compete against the Model S.
Anaheim, Calif.-based Fisker had been awarded $529 million under the DOE's Advanced Technology Vehicles Manufacturing loan program in part to re-tool a former General Motors Co. factory in Delaware to build the Atlantic. That plan is now on hold, and Fisker and its newly appointed chief executive, Tony Posawatz, are trying to raise private capital to replace the frozen federal loan.
Many established car makers with long histories of launching new models struggle to hit ambitious launch schedules without compromising the assembly quality of their vehicles.
Tesla said that it plans to "reach our objective of weekly production of 400 Model S vehicles before the end of 2012 which should enable us to produce more than 20,000 Model S vehicles in 2013.
Melodie Warner contributed to this article.
Write to Joseph B. White at joseph.white
Credit: By Joseph B. White And Shawn Langlois
Subject: Automobile industry; NASDAQ trading; Financial performance
People: Musk, Elon
Company / organization: Name: Securities & Exchange Commission; NAICS: 926150; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2012
Publication date: Sep 25, 2012
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1070440014
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1070440014?accountid=7117
Copyright: (c) 2012 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-19
Database: The Wall Street Journal
Corporate News: Its Cars Delayed, Tesla Raises Cash
Author: White, Joseph B; Langlois, Shawn
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]26 Sep 2012: B.3.
ProQuest document link
Abstract:
High-end electric car maker Tesla Motors Inc., facing a revenue squeeze from production problems, said on Tuesday it would sell about 5 million shares to raise cash after winning breathing room on terms of a $465 million U.S. Energy Department loan.
Full text: High-end electric car maker Tesla Motors Inc., facing a revenue squeeze from production problems, said on Tuesday it would sell about 5 million shares to raise cash after winning breathing room on terms of a $465 million U.S. Energy Department loan.
Tesla said production of its new Model S electric sedan is running between four and five weeks behind the company's original plan, sending its shares down about 10% to $27.66 in 4 p.m. Nasdaq trading on Tuesday.
The selloff, and the operational and financial problems that Tesla disclosed, are a blow to high-profile co-founder Elon Musk, who led a glitzy unveiling of a new battery charger on Monday.
The Palo Alto, Calif., maker of high-performance electric cars expects an as much as $200 million shortfall in revenue this year as a result of production delays. It projected full-year revenue of between $400 million and $440 million, down from between $560 million and $600 million earlier.
On Monday, it won a waiver on terms of its DOE loan, according to a filing with the Securities and Exchange Commission.
The waiver postpones $14.6 million of a loan payment due next month to Feb. 15, revises other scheduled payments and commits to submitting by Oct. 31 a plan to repay the 10-year government loan ahead of schedule.
Deepak Ahuja, Tesla finance chief, said that the company projects it would have about $100 million in cash at the end of the third quarter excluding proceeds from the stock sale.
He said that sale, which is scheduled to close on Thursday, should raise about $128 million.
Tesla, in its filing, said that including proceeds from the proposed share offering, it expects to have $228 million in cash, cash equivalents and restricted cash by the end of the month. The company said it plans to cut capital spending by 20% in the third quarter from second quarter levels.
The all-aluminum body Model S is the company's second vehicle and is designed and priced to sell in higher volumes than its existing Roadster, which costs about $109,000. The company earlier had hoped to produce this year 5,000 of the Model S cars, which are priced between $50,000 and $98,000 after federal tax credit.
Tesla didn't provide details of the production problems in its filing.
The company alluded to concerns about quality and concerns about suppliers as reasons why its Fremont, Calif., factory has produced since June just 255 Model S cars as of Sept. 23.
"Certain suppliers have experienced delays in meeting our demand and we continue to focus on supplier capabilities and constraints," Tesla said.
The U.S. last year suspended payments to another electric car startup, Fisker Automotive Inc., after that company fell behind schedule in its effort to engineer a midsize, plug-in hybrid sedan.
Fisker, based in Anaheim, Calif., had been awarded $529 million under the DOE's Advanced Technology Vehicles Manufacturing loan program in part to re-tool a former General Motors Co. factory in Delaware to build the Atlantic. That plan is now on hold, and Fisker and its newly appointed chief executive, Tony Posawatz, are trying to raise private capital to replace the frozen federal loan.
Many established car makers with long histories of launching new models struggle to hit ambitious launch schedules without compromising the assembly quality of their vehicles.
Tesla said that it plans to "reach our objective of weekly production of 400 Model S vehicles before the end of 2012 which should enable us to produce more than 20,000 Model S vehicles in 2013.
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Credit: By Joseph B. White and Shawn Langlois
Subject: Automobile industry; Vehicles; Capital expenditures; NASDAQ trading
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 3100: Capital & debt management; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2012
Publication date: Sep 26, 2012
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1073862769
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1073862769?accountid=7117
Copyright: (c) 2012 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-19
Database: The Wall Street Journal
Tesla Boosts Stock Offering
Author: Chaudhuri, Saabira
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Sep 2012: n/a.
ProQuest document link
Abstract:
The Palo Alto, Calif., electric-car maker earlier said it hoped to raise about $130 million by offering about 5 million shares after receiving a waiver on terms of a $465 million U.S. Department of Energy loan.
Full text: Tesla Motors Inc. said it plans sell as many as 8 million shares at about $28.25, raising as much as $225 million to avert a cash squeeze amid production delays.
The Palo Alto, Calif., electric-car maker earlier said it hoped to raise about $130 million by offering about 5 million shares after receiving a waiver on terms of a $465 million U.S. Department of Energy loan. The DOE on Monday agreed to delay a $14.6 million payment due next month to February and required the company to submit a plan by Oct. 31 that would repay the loan ahead of its 10-year schedule.
Investors cheered the vote of confidence shown by the larger than expected number of shares, boosting Tesla's stock price 4% to $29.65 in Friday afternoon trading. Goldman Sachs Group is handling the share sale.
Chief Executive Elon Musk agreed to buy up to 35,398 shares for about $1 million, the company said. Mr. Musk currently holds about 26% of the electric-car maker's stock, according to FactSet Research.
There were 105.4 million shares outstanding as of July 16.
The offering is expected to close on Oct. 3.
Tesla began deliveries of its all-electric Model S sedan in June, a month ahead of schedule. But on Tuesday, Tesla cut its revenue target for 2012 by as much as $200 million, warning it has fallen behind on its Model S sedan, citing unspecified production problems. The car sells for between $50,000 and $98,000 after federal tax credit.
The company didn't detail the problems in a security filing but alluded to concerns about quality and suppliers as reasons why its Fremont, Calif., factory has produced since June just 255 Model S cars as of Sept. 23.
"Certain suppliers have experienced delays in meeting our demand and we continue to focus on supplier capabilities and constraints," Tesla said.
Tesla said that it plans to "reach our objective of weekly production of 400 Model S vehicles before the end of 2012 which should enable us to produce more than 20,000 Model S vehicles in 2013.
Credit: By Saabira Chaudhuri
Subject: Automobile industry
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Goldman Sachs Group Inc; NAICS: 523110, 523120; Name: Tesla Motors Inc; NAICS: 336999; Name: Department of Energy; NAICS: 926130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2012
Publication date: Sep 28, 2012
Section: Autos
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1080904427
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1080904427?accountid=7117
Copyright: (c) 2012 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-19
Database: The Wall Street Journal
Corporate News: Tesla Motors Seeking to Raise $225 Million From Share Sale
Author: Chaudhuri, Saabira
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Sep 2012: B.3.
ProQuest document link
Abstract:
Investors on Friday cheered the vote of confidence shown by the larger than expected number of shares, boosting Tesla's stock price 2.8% to $29.28 in 4 p.m. Nasdaq trading.
Full text: Tesla Motors Inc. said it plans sell as many as 8 million shares at about $28.25 apiece, looking to raise as much as $225 million to avert a cash squeeze amid production delays.
The luxury electric-car maker earlier this week disclosed an offering to raise about $130 million by selling about 5 million new shares.
The stock-sale came as it received a waiver on terms of a $465 million U.S. Department of Energy loan.
The DOE on Monday agreed to push back $14.6 million of a payment due next month to February and to require the company to submit a new repayment plan by Oct. 31 that would fully repay the loan ahead of its 10-year schedule.
Investors on Friday cheered the vote of confidence shown by the larger than expected number of shares, boosting Tesla's stock price 2.8% to $29.28 in 4 p.m. Nasdaq trading. Goldman Sachs Group is handling the share sale.
Tesla Chief Executive Elon Musk agreed to buy up to 35,398 shares of the stock sale for about $1 million, the company said. Mr. Musk currently holds about 26% of the Palo Alto, Calif., company's stock, according to FactSet Research.
There were 105.4 million shares outstanding as of July 16.
The offering is expected to close on Oct. 3.
Tesla began deliveries of its all-electric Model S sedan in June, a month ahead of schedule. But on Tuesday, it a cut a revenue target for 2012 by as much as $200 million, warning production has fallen behind on its Model S sedan, citing unspecified problems. The sedan sells for between $50,000 and $98,000 after federal tax credit.
The company didn't detail the production problems in a security filing. It alluded to concerns about quality and suppliers as reasons why a Fremont, Calif., factory has produced since June just 255 Model S cars as of Sept. 23. It also lowered its estimate of 2012 production.
"Certain suppliers have experienced delays in meeting our demand and we continue to focus on supplier capabilities and constraints," Tesla said in its securities filing.
It also said that it plans to "reach our objective of weekly production of 400 Model S vehicles before the end of 2012 which should enable us to produce more than 20,000 Model S vehicles in 2013."
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Credit: By Saabira Chaudhuri
Subject: Stock prices; Securities offerings
Location: United States--US
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2012
Publication date: Sep 29, 2012
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1081119358
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1081119358?accountid=7117
Copyright: (c) 2012 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permissi on.
Last updated: 2017-11-19
Database: The Wall Street Journal
Tesla's Cars Look Better Than Its Stock
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Oct 2012: n/a.
ProQuest document link
Abstract:
[...]fully 78% of Deutsche Bank's calculation of Tesla's net present value relates to estimated discounted cash flows from 2020 and beyond.
Full text: The biggest concern with electric cars is that they might never get you to your destination. That is also a risk with Tesla Motors, the vehicle of choice for many investors enamored of the prospects for battery-powered autos.
Tesla's new Model S sedan, on which the company's immediate future rests, has earned rave reviews. Great products don't always make for great investments, though.
Having risen about 63% since its June 2010 initial public offering and valued at 118.3 times estimated 2013 earnings, Tesla is closer to the tech than auto sector.
Investors are essentially providing it with publicly traded venture capital. Financially, this higher-risk, early-stage nature can be seen in Tesla's high rate of cash burn and recent stock offering to replenish its coffers. It can also be seen in valuations. For example, fully 78% of Deutsche Bank's calculation of Tesla's net present value relates to estimated discounted cash flows from 2020 and beyond.
This means a lot needs to go right to justify investing. Tesla is building an automotive company from scratch, selling a limited set of models demanding new infrastructure and changed expectations among drivers to be successful. Tesla's recent downgrade of 2012 production targets, prompting a 10% one-day drop in the stock price, reflects its daunting task. Tesla says, however, it is still on track to deliver 20,000 Model S cars in 2013.
Even assuming supply-chain challenges are resolved adequately, though, there is also demand to consider.
From one angle, Tesla's target looks easy. Jefferies points out that even if electric vehicles accounted for just 0.5% of the vehicle market, this would equate to 75,000 a year. Tesla should be able to secure a large chunk of that.
Even that 0.5% isn't easy. The 25,000 electric vehicles sold in the U.S. this year by the end of August--0.3% of all auto sales, according to Maxim Group--includes not just all-electric vehicles like the Model S, but also plug-in hybrid electric vehicles like General Motors' Chevrolet Volt.
It is important to remember that various technologies are competing to shift drivers away from oil.
Toyota caused a stir last month when it killed plans for a new all-electric car, saying current battery technology didn't "meet society's needs."
Hybrids aside, it is also possible that none of the competing electric technologies will succeed for some time. Indeed, Lux Research concludes that despite generous subsidies, electric vehicles may remain uncompetitive with traditional cars, precluding significant adoption even over the next decade. Volatile gasoline prices and political support for tax breaks are key determinants.
It isn't just electric vehicles Tesla must compete with. The Model S comes in three basic versions, depending on battery size, ranging from $49,900 to just under $69,900, net of a $7,500 federal tax credit.
At those prices, the car competes with middle, upper and specialty luxury vehicles like the Audi A8, using Ward's Automotive Group's market segmentation.
These segments averaged annual U.S. sales of about 262,000 in the past five years, according to Ward's. Assuming Tesla's sales are mostly in the U.S., that implies it would need to capture about 8% of that market. That may sound small. But consider that Cadillac, Audi and Acura each have around 9% to 10% of the retail market for 2012 model luxury vehicles, according to consultancy Strategic Vision.
Investors enamored of Tesla's vision risk forgetting that it must compete with an established automotive industry. Toyota, GM, Ford, Nissan and others are already releasing competing products and also sell a wide portfolio of traditional vehicles generating cash to absorb inevitable early-stage losses.
There is a parallel with another new-paradigm industry dependent on subsidies: solar-panel manufacturing.
To expand the market, costs must be driven down relentlessly to make the new technology competitive with older, cheaper alternatives. For solar power, this has worked by Chinese manufacturers capturing market share from established pioneers.
The result has been better, cheaper products for consumers and enormous declines in the value of Western first movers like First Solar.
Tesla's vehicles may well help shift the world toward an all-electric future. For investors, though, first movers don't always win the race.
Write to Liam Denning at
Credit: By Liam Denning
Subject: Electric vehicles; Competition; Automobile industry; Investments; Automobile sales
Location: United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Product name: Audi A8, Chevrolet Volt
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publicationyear: 2012
Publication date: Oct 14, 2012
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1111789141
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1111789141?accountid=7117
Copyright: (c) 2012 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproductio n or distribution is prohibited without permission.
Last updated: 2017-11-19
Database: The Wall Street Journal
Tesla Posts Loss, but Production Ramps Up
Author: Jones, Kristin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Nov 2012: n/a.
ProQuest document link
Abstract:
Electric-car maker Tesla Motors Inc. posted a wider third-quarter loss on rising expenses.
Full text: Electric-car maker Tesla Motors Inc. posted a wider third-quarter loss on rising expenses.
The Palo Alto, Calif.-based company also said it had reached a production rate of 200 cars a week, a level it needs to generate positive operating cash flow. It was producing five cars a week at the beginning of the quarter.
Its shares rose about 8%, or $2.29, to $31.21 in afternoon Nasdaq stock market trading as investors cheered the news on its higher production rate.
In September, it warned of an as much as $200 million revenue shortfall this year as a result of production problems. It reaffirmed a full-year revenue forecast of between $400 million and $440 million, down from a prior forecast of between $560 million and $600 million.
Tesla began deliveries of its all-electric Model S sedan in June, a month ahead of schedule. But the about $100,000 vehicle later ran into production delays, which Tesla suggested stemmed from problems with its supply chain. Tesla said on Monday that it produced almost 350 and delivered more than 250 Model S sedans during the latest quarter.
Tesla reported a loss of $110.8 million, or $1.05 a share, compared with a year-earlier loss of $65.1 million, or 63 cents a share. Excluding factors such as stock-based compensation, the per-share loss widened to 92 cents from 55 cents a year earlier.
Revenue fell 13% to $50.1 million from $57.7 million a year earlier on a decline in development services. Automotive sales, which make up most of the top line, rose 16%. Revenue from development services, or work it performed for other auto makers, dropped to $81,000, from $14.4 million.
Analysts polled by Thomson Reuters were expecting a per-share loss of 90 cents, with revenue of $48.3 million.
Gross margin was negative 17.7%, compared with a positive 29.9% margin a year earlier due to the cost of introducing the Model S and the limited output from its factory.
Operating expenses rose 22% to $99.7 million, reflecting higher research and development and overhead costs.
The company has said it hopes to reach a weekly production rate of 400 Model S vehicles by year-end.
Write to Kristin Jones at
Credit: By Kristin Jones
Subject: Financial performance; Earnings; Automobile industry; Losses
Location: Palo Alto California
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2012
Publication date: Nov 5, 2012
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1130661938
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1130661938?accountid=7117
Copyright: (c) 2012 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-19
Database: The Wall Street Journal
Private Properties; Tesla co-founder Elon Musk pays $17 million for Bel Air home; a pirate-themed Caribbean villa listed for $35 million; the price of Wyoming ranch is reduced to $14.9 million; Florida equestrian estate hits auction block.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Dec 2012: n/a.
ProQuest document link
Abstract:
According to listing agent Lee Steiner, the home has a video arcade, two master suites and Carrara marble showers.
Full text: Tesla Motors co-founder Elon Musk purchased this Bel Air estate for $17 million. He has been renting the home for the past three years.
The 20,248-square-foot home has six bedrooms and nine bathrooms. The property overlooks Bel-Air Country Club and includes a lighted tennis court, five garages, gym, guest quarters, spa and pool, pictured here.
A pirate-themed villa on the island of St. Thomas has listed for $35 million. The 15,000-square-foot home is located in the Preserve at Botany Bay, a 397-acre residential neighborhood on the western tip of the island.
According to listing agent Lee Steiner, the home has a video arcade, two master suites and Carrara marble showers. The property also has a caretaker cottage with a four-car garage, an infinity-edge pool with a mosaic showing a scene of turtles, fish and mermaids, helipad access and private beach access.
The asking price of this Wyoming ranch has been reduced 24%, to $14.9 million from $19.5 million.
The home features a 32-foot-long window in the living room that is about 14-feet high, offering views of the Wyoming Range.
The property includes 9,800 acres of land, with two horse stables, a riding arena, manager's home, guest cabin and a private airstrip, says listing agent John Pierce.
This Wellington, Fla., estate, is hitting the auction block in February. The home, which was relisted in April 2011, is currently on the market for $7.5 million. It originally was listed in June 2007 for $9.6 million.
The 2,600-square-foot property includes an 80-by-220-foot covered and mirrored riding arena.
The estate has 10 acres, featuring a 12-stall courtyard stable and tack room. Platinum Luxury Auctions will handle the Feb. 9 auction, which has a reserve price of $4 million. Property previews begin Jan. 5.
Subject: Auctions
Location: Botany Bay
People: Musk, Elon
Company / organization: Name: Bel Air; NAICS: 445110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2012
Publication date: Dec 27, 2012
Section: Real Estate
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1253065041
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1253065041?accountid=7117
Copyright: (c) 2012 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Co-Founder Elon Musk Pays $17 Million for a Bel Air Home
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Dec 2012: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Motors co-founder Elon Musk has bought the Bel Air estate he's been renting for the past three years for $17 million.
The 20,248-square-foot home has six bedrooms, nine bathrooms, five fireplaces, a wine cellar that holds 1,000 bottles of wine and a two-story library. The property overlooks Bel-Air Country Club and includes a lighted tennis court, five garages, a pool and spa, gym and guest quarters.
The home, which was owned by Mitch Julis, co-founder of hedge fund Canyon Capital Advisors, was put on the market in 2008 for $27 million. Mr. Musk, who also co-founded PayPal and founded SpaceX, started renting the property in 2009. The home was built in 1990.
Listing agent Victoria Risko, of Sotheby's International Realty, says Mr. Musk decided to purchase the property so he could "customize it to his taste." Mr. Julis agreed to the sale price so long as the home closed in 2012, for capital-gains tax incentives, says a person familiar with the deal. Brian Ades, also of Sotheby's, represented Mr. Musk in the transaction.
Alyssa Abkowitz
Big Drop: Once Listed in the $30 Million Range, Wyoming Ranch Is Reduced to $14.9 Million
The asking price of a 9,800-acre Wyoming ranch owned by the ex-wife of United States Surgical founder Leon Hirsch has been reduced 24%, to $14.9 million from $19.5 million.
Outside Pinedale, the 9,700-square-foot main home has seven bedrooms, nine bathrooms and a 32-foot-long window in the living room that's about 14-feet high, offering views of the Wyoming Range. The property includes two horse stables, a riding arena, manager's home, guest cabin and a private airstrip that's longer than the runways at New York's La Guardia Airport.
The seller, Turi Josefsen, received the ranch in her divorce from Mr. Hirsch. Listing agent John Pierce, of Hall & Hall, says Ms. Josefsen is selling because she's reached a stage in her life in which she's no longer able to enjoy the property to its full extent.
The home has been on the market for several years. It had an original list price in the "$30-million range" when it was marketed by another real-estate brokerage, Mr. Pierce says.
A.A.
See Me Ride: Florida Equestrian Estate With Mirrored Arena Hits the Auction Block
The Wellington, Fla., estate of the former co-owner of the Boston Celtics and New Jersey Nets is hitting the auction block in February.
Carol Cohen, the widow of Alan Cohen, has decided to auction off the equestrian property because she's "frustrated with the inability of the market to respond through the traditional process," says Trayor Lesnock, president of Platinum Luxury Auctions. The home, which was relisted in April 2011, is currently on the market for $7.5 million. It originally was listed for $9.6 million in June 2007.
An equestrian hub, Wellington is located in Palm Beach County near Royal Palm Beach. The 10-acre property has a 2,600-square-foot home with four bedrooms and 5½ bathrooms. The grounds have a 12-stall courtyard stable, a tack room and an 80-by-220-foot covered and mirrored riding arena.
Platinum Luxury Auctions will handle the Feb. 9 auction, which has a reserve price of $4 million. Property previews begin Jan. 5.
A.A.
Pirates of the Caribbean: $35 Million, Treasure Chests Negotiable
A pirate-themed villa on the island of St. Thomas has listed for $35 million.
The 15,000-square-foot home with six bedrooms and eight bathrooms is located in the Preserve at Botany Bay, a 397-acre residential neighborhood on the western tip of the island. Named Whydah, after the 1700s ship of pirate "Black Sam" Bellamy, the home took four years to build and was finished earlier this month.
Listing agent Lee Steiner says the owner, who works in the finance industry, is a pirate enthusiast who designed the home as a place for "a successful retired pirate surrounded by his spoils." Authentic treasure chests, cannons and guns from actual pirate ships, along with nautical bunk beds, are displayed throughout the home. Mr. Steiner says the pirate furnishings and décor aren't included in the asking price, but are negotiable.
Built for more than $1,000 a square foot, according to Mr. Steiner, the home has a video arcade, two master suites and Carrara marble showers. The property also has a caretaker cottage with a four-car garage, an infinity-edge pool with a mosaic showing a scene of turtles, fish and mermaids, helipad access and private beach access.
Mr. Steiner, of United States Virgin Islands Sotheby's International Realty, says the owner is selling because he's spending less time in the Caribbean due to life changes.
A.A.
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2012
Publication date: Dec 28, 2012
Section: Real Estate
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1255439939
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1255439939?accountid=7117
Copyright: (c) 2012 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-19
Database: The Wall Street Journal
Tesla Motors Approaches Crossroad; Output Figures for Battery-Powered Model S Are Expected to Shed Light on Car Maker's Viability
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Feb 2013: n/a.
ProQuest document link
Abstract:
A patent attorney in Mountain View, Calif., Ms. Boyd recently put down a $5,000 deposit to buy a $101,000 Tesla Model S, the battery-powered car that the Silicon Valley company is counting on to drive it to profitability and ensure it doesn't meet the same misfortune as other fledgling makers of electric vehicles. When investors short a stock, they borrow stock, hoping the share price falls so they can buy the stock back later at a lower price, return the shares and make a profit.
Full text: For electric-car maker Tesla Motors Inc., success is going to depend a lot on people like Karen Boyd.
A patent attorney in Mountain View, Calif., Ms. Boyd recently put down a $5,000 deposit to buy a $101,000 Tesla Model S, the battery-powered car that the Silicon Valley company is counting on to drive it to profitability and ensure it doesn't meet the same misfortune as other fledgling makers of electric vehicles.
Ms. Boyd said her interest in the car was "an environmental nod. I am trying to be at the cutting edge of more sustainable vehicles."
But she also said she likes the way it drives like a BMW, with ground-hugging steering and speed. "It totally rocks," she said.
Investors will get a critical look at how Tesla is doing with the Model S--the first car the company has designed from the ground up--in the next few weeks when it reports its fourth-quarter results. A key figure will be how many Model S cars the company is now making per week. It was making 200 a week in October and needs to make at least 400 a week to break even.
The company won't say how many cars it has delivered so far, but it planned to have sold about 3,000 by the end of 2012. More than 13,000 people have already paid $5,000 deposits.
Tesla, which has posted a loss in every quarter since its initial public offering in 2010, is facing plenty of skeptics. In the third quarter of 2012, it reported a loss of $111 million on revenue of $50 million. The company raised $193 million in an October stock offering.
The fourth quarter "is the quarter that they really need to show me the money," said Josh Norman, a senior analyst with Saibus Research, a Boston-based investment-research firm, which doesn't own Tesla shares. "This is the make-or-break quarter."
Tesla declined to be interviewed for this article.
In December the company said Model S production for two weeks reached an annualized pace of 20,000 vehicles a year, or 400 a week, and Chief Executive Elon Musk told Reuters that he is "hoping we have a profitable quarter this year. Shame on us if we can't achieve that." Tesla confirmed the comment.
Tesla is closely watched as lower-than-expected demand for electric cars has forced several startups and publicly traded companies to shut down, and because Tesla received $465 million in loans from the Department of Energy. Not since the 1920s has a startup car company managed to survive in the U.S. market.
Some investors are betting against Tesla. Several investment funds, including Cadian Capital Management and Barclays PLC, have taken out significant short positions on the company, expecting its stock to fall.
As of the end of December, open short-sales positions in Tesla stock equaled nearly 24% of the company's shares outstanding, placing it among the most shorted stocks on the Nasdaq, according to a Wall Street Journal analysis of data from the exchange.
When investors short a stock, they borrow stock, hoping the share price falls so they can buy the stock back later at a lower price, return the shares and make a profit.
Still, Tesla has been supported by investments from Daimler AG, Toyota Motor Corp. and Panasonic Corp., among others.
Adam Jonas, the automotive analyst for Morgan Stanley, is among the believers. His firm has a buy rating on Tesla's shares and expects them to rise to $47 in 12 months from $39.24 Friday, which is up 40% since the fall. Morgan Stanley owns more than 1% of Tesla's shares, according to the firm's disclosure.
"We are going to find out in the next few months whether we are seeing a viable company or not," Mr. Jonas said. "You either believe the story or not."
Tesla was founded in 2003 and a year later garnered a big investment from Mr. Musk, who made a fortune as a co-founder of PayPal Inc.
The company in 2008 started selling the $109,000 Tesla Roadster, which is a modified version of a Lotus sports car.
The base version of the Model S, priced at just under $60,000, is expected to go 160 miles before needing a recharge, about double most other electric vehicles. It also features a 17-inch touch-screen display in its console, has automatic retractable door handles and accelerates to 60 miles per hour in 4.4 seconds.
The Model S was named "Car of the Year" for 2013 by Motor Trend magazine, although it has taken Tesla longer than expected to ramp up production as it dealt with supplier delays.
Ms. Boyd isn't deterred. She opted for a version that is supposed to go 265 miles on a single charge. It won't arrive for another two months, but she has her vanity plate picked out: "KARNS S."
Write to Mike Ramsey at
Credit: By Mike Ramsey
Subject: Stock prices; Automobile industry; Financial performance; Investments; Losses
People: Musk, Elon
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Barclays PLC; NAICS: 522110, 523110, 551111; Name: Tesla Motors Inc; NAICS: 336999; Name: Department of Energy; NAICS: 926130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Feb 11, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1285380094
Document URL: https://login.ezproxy.uta.edu/l ogin?url=https://search-proquest-com.ezproxy.uta.edu/docview/1285380094?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Corporate News: Tesla Motors Approaches Crossroad --- Output Figures for Battery-Powered Model S Are Expected to Shed Light on Car Maker's Viability
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Feb 2013: B.3.
ProQuest document link
Abstract:
A patent attorney in Mountain View, Calif., Ms. Boyd recently put down a $5,000 deposit to buy a $101,000 Tesla Model S, the battery-powered car that the Silicon Valley company is counting on to drive it to profitability and ensure it doesn't meet the same misfortune as other fledgling makers of electric vehicles. When investors short a stock, they borrow stock, hoping the share price falls so they can buy the stock back later at a lower price, return the shares and make a profit.
Full text: For electric-car maker Tesla Motors Inc., success is going to depend a lot on people like Karen Boyd.
A patent attorney in Mountain View, Calif., Ms. Boyd recently put down a $5,000 deposit to buy a $101,000 Tesla Model S, the battery-powered car that the Silicon Valley company is counting on to drive it to profitability and ensure it doesn't meet the same misfortune as other fledgling makers of electric vehicles.
Ms. Boyd said her interest in the car was "an environmental nod. I am trying to be at the cutting edge of more sustainable vehicles."
But she also said she likes the way it drives like a BMW, with ground-hugging steering and speed. "It totally rocks," she said.
Investors will get a critical look at how Tesla is doing with the Model S -- the first car the company has designed from the ground up -- in the next few weeks when it reports its fourth-quarter results.
A key figure will be how many Model S cars the company is now making per week. It was making 200 a week in October and needs to make at least 400 a week to break even.
The company won't say how many cars it has delivered so far, but it planned to have sold about 3,000 by the end of 2012. More than 13,000 people have already paid $5,000 deposits.
Tesla, which has posted a loss in every quarter since its initial public offering in 2010, is facing plenty of skeptics. In the third quarter of 2012, it reported a loss of $111 million on revenue of $50 million. The company raised $193 million in an October stock offering.
The fourth quarter "is the quarter that they really need to show me the money," said Josh Norman, a senior analyst with Saibus Research, a Boston-based investment-research firm, which doesn't own Tesla shares. "This is the make-or-break quarter."
Tesla declined to be interviewed for this article.
In December the company said Model S production for two weeks reached an annualized pace of 20,000 vehicles a year, or 400 a week, and Chief Executive Elon Musk told Reuters that he is "hoping we have a profitable quarter this year. Shame on us if we can't achieve that." Tesla confirmed the comment.
Tesla is closely watched as lower-than-expected demand for electric cars has forced several startups and publicly traded companies to shut down, and because Tesla received $465 million in loans from the Department of Energy. Not since the 1920s has a startup car company managed to survive in the U.S. market.
Some investors are betting against Tesla. Several investment funds, including Cadian Capital Management and Barclays PLC, have taken out significant short positions on the company, expecting its stock to fall.
As of the end of December, open short-sales positions in Tesla stock equaled nearly 24% of the company's shares outstanding, placing it among the most shorted stocks on the Nasdaq, according to a Wall Street Journal analysis of data from the exchange.
When investors short a stock, they borrow stock, hoping the share price falls so they can buy the stock back later at a lower price, return the shares and make a profit.
Still, Tesla has been supported by investments from Daimler AG, Toyota Motor Corp. and Panasonic Corp., among others.
Adam Jonas, the automotive analyst for Morgan Stanley, is among the believers. His firm has a buy rating on Tesla's shares and expects them to rise to $47 in 12 months from $39.24 Friday, which is up 40% since the fall. Morgan Stanley owns more than 1% of Tesla's shares, according to the firm's disclosure.
"We are going to find out in the next few months whether we are seeing a viable company or not," Mr. Jonas said. "You either believe the story or not."
Tesla was founded in 2003 and a year later garnered a big investment from Mr. Musk, who made a fortune as a co-founder of PayPal Inc.
The company in 2008 started selling the $109,000 Tesla Roadster, which is a modified version of a Lotus sports car.
The base version of the Model S, priced at just under $60,000, is expected to go 160 miles before needing a recharge, about double most other electric vehicles. It also features a 17-inch touch-screen display in its console, has automatic retractable door handles and accelerates to 60 miles per hour in 4.4 seconds.
The Model S was named "Car of the Year" for 2013 by Motor Trend magazine, although it has taken Tesla longer than expected to ramp up production as it dealt with supplier delays.
Ms. Boyd isn't deterred. She opted for a version that is supposed to go 265 miles on a single charge. It won't arrive for another two months, but she has her vanity plate picked out: "KARNS S."
Subscribe to WSJ:
Credit: By Mike Ramsey
Subject: Financial performance; Automobile production; Electric vehicles
Location: California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2013
Publication date: Feb 11, 2013
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1285445659
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1285445659?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
A Spectator's Stake in the Tesla Test-Drive Spat; Oh, for the day when electric-car enthusiasts didn't expect the rest of us to subsidize their hobby.
Author: Jenkins, Holman W; Jr.
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Feb 2013: n/a.
ProQuest document link
Abstract:
Most troubling, to Tesla at least, ought to be the new Obama fuel-economy rules that virtually require the big auto makers to build electric cars and bribe consumers to drive them off the lot in order to create headroom for the cars that auto makers really want to sell. The Ash rule applies not just to electric cars, but to wind farms, solar power and other renewable energy projects, all of which may have potential, all of which would be better served if government limited itself to funding basic research until a technology emerges that the marketplace can support on its merits.
Full text: Somebody once asked the late, great British motorcycle journalist Kevin Ash about the electric motorcycles then arriving on the market. After noting that most electricity comes from coal, casting doubt on any eco-benefit, he dug in: "The silly small range and long recharge times make them impractical. . . . An entirely new method of storing electricity is needed to transform practicality, and it must be invented (and then refined in labs) first. Developing electric road vehicles using existing technology is a waste and a deception."
Ash, who was killed last month testing a new BMW bike in South Africa, naturally comes to mind amid this week's spat between the New York Times and Tesla over a road trip from Washington to Boston attempted by a Times reporter in one of the company's electric cars. The car ran out of juice. Recriminations flew.
Ecumenically, let's dispense blame to all involved. Tesla certainly has a point that, on such an extended journey, Priorities A through F should be attending to the battery, not keeping up with traffic or enjoying the ride. The New York Times has a point if the purpose of the Tesla-designed exercise was to show the Tesla S can be a worry-free substitute for a gas-powered car on a long trip. It can't.
The best point, though, is had by those green-car advocates who say Tesla was nuts to concoct such a PR stunt in the first place. "If an average driver needs such hand-holding from an automaker to make the trip, it's the wrong car for the trip," writes GM's former in-house electric-car enthusiast Chelsea Sexton at Wired.com.
The ensuing furor undoubtedly owes much to the fact that Tesla and its affluent fans are heavily subsidized by the U.S. taxpayer. More power to Tesla founder Elon Musk and his customers if, with entirely their own money, they wish to indulge an interest in electrical vehicles. But that's not the case here, and the delusions of U.S. government policy seem to have filtered into Tesla's public relations.
Kevin Ash was right. To subsidize the take-up of immature technologies that can't meet ordinary expectations of the marketplace is a formula for embarrassment, scandal and discrediting the very technology being promoted. We like to imagine coherent government planning. We like to think policy actions are predicated on careful and intelligent anticipation of consequences. But the nature of the beast is otherwise. Any rational coordination of means and ends goes out the window as soon as the political scramble for subsidies begins.
Tesla, let's recall, set out to market an electric car before Washington entered the business with its vast and distorting subsidies. Most troubling, to Tesla at least, ought to be the new Obama fuel-economy rules that virtually require the big auto makers to build electric cars and bribe consumers to drive them off the lot in order to create headroom for the cars that auto makers really want to sell. Hard to devise would be a better strategy for discouraging the profitable emergence of a niche maker of electric vehicles.
The Ash rule applies not just to electric cars, but to wind farms, solar power and other renewable energy projects, all of which may have potential, all of which would be better served if government limited itself to funding basic research until a technology emerges that the marketplace can support on its merits.
Consider the spectacle Germany has been making of itself in this regard. German politicians decided it would be nice if 35% of the country's electricity came from renewables by 2020. German politicians, after Fukushima, decided it would be nice to phase out the country's nuclear plants. German politicians decided factories should be protected from any increase in electricity prices. In their home districts, politicians thought "factory" should be extended to cover any large and influential employer.
Now the green future has arrived and German voters are in revolt over rising power prices. "Fuel poverty" has become a buzz term as thousands have been shut off for nonpayment of bills. Politicians have begun trying to claw back subsidies from companies that say the subsidies are the only reason they're in business. A scandal seems to emerge weekly over some big-name company illicitly benefiting from subsidized electricity rates.
Though Germany is burning more coal than ever, though carbon-dioxide emissions are higher than ever, its fossil-fuel plants are going broke while waiting for the wind to die down or the sun to disappear behind a cloud. Operators at one point were receiving negative prices (i.e., paying) to get customers to accept power created by coal- and gas-fired generators that must be kept spinning in order to support the heavily subsidized renewables.
Yet somehow Germany continues to feature as a role model in the rhetoric of U.S. policy makers. One hopes the news will catch up with them before the U.S. economy is stuck on the roadside needing a tow.
Credit: By Holman W. Jenkins, Jr.
Subject: Electric vehicles; Automobile industry; Factories; Politics
Location: United States--US
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Feb 15, 2013
column: Business World
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1288023914
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1288023914?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Corporate News: Electric-Car Maker Tesla Reports a Wider Loss
Author: White, Joseph B
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]21 Feb 2013: B.3.
ProQuest document link
Abstract:
Electric-car maker Tesla Motors Inc. on Wednesday reported a wider fourth-quarter loss and promised new cost cuts, but said production of its Model S sedan is running at a rate of 20,000 vehicles a year, a key benchmark for investors.
Full text: Electric-car maker Tesla Motors Inc. on Wednesday reported a wider fourth-quarter loss and promised new cost cuts, but said production of its Model S sedan is running at a rate of 20,000 vehicles a year, a key benchmark for investors.
The Palo Alto, Calif., auto maker said higher expenses for manufacturing and sales operations contributed to a loss of $89.9 million, or 79 cents a share, compared with a loss of $81.5 million, or 78 cents a share, a year earlier. It also missed its target for fourth-quarter production.
Tesla shares fell nearly 6% in late trading on Wednesday after declining 74 cents to $38.54 in 4 p.m. Nasdaq trading.
The company said its unrestricted cash dropped to under $202 million at the end of the quarter, and it promised a fresh round of cost cutting measures.
Tesla Chief Executive Elon Musk said he is confident the company will be narrowly profitable this quarter, and forecast deliveries of 20,000 Model S battery-powered sedans this year. In an interview, Mr. Musk said he doesn't expect Tesla will need to raise additional money through share sales or debt offerings to fund the "couple hundred million" dollar costs of bringing its Model X electric sport-utility vehicle to production by 2014.
Instead, Mr. Musk said he expects Tesla will fund the new model from customer deposits and profits from what he forecast will be about $2 billion in annual revenue. "I'm talking about good old profits," he said.
Mr. Musk also doesn't plan to seek more investments from partners Toyota Motor Corp. or Daimler AG.
In the short term, Mr. Musk said Tesla is focusing on cutting manufacturing costs, including cutting temporary positions at its factory, and smoothing out parts supply problems.
Subscribe to WSJ:
Credit: By Joseph B. White
Subject: Earnings per share; Financial performance; Company reports; Losses
Location: Palo Alto California United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry; 3100: Capital & debt management
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2013
Publication date: Feb 21, 2013
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1289448830
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1289448830?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Earns $40 Million Selling Pollution Credits
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Mar 2013: n/a.
ProQuest document link
Abstract:
Last year, the Palo Alto, Calif.-based maker of the Model S electric car collected $40.5 million--about 10% of its total revenue--selling credits earned from states to other auto makers, according to the company's annual financial report.
Full text: Tesla Motors Inc. is racking up big bucks peddling pollution credits earned from sales of its $60,000 and up electric cars.
Last year, the Palo Alto, Calif.-based maker of the Model S electric car collected $40.5 million--about 10% of its total revenue--selling credits earned from states to other auto makers, according to the company's annual financial report.
Auto makers are stockpiling these credits to avoid penalties in California and other states that require a portion of the vehicles they sell to emit zero pollutants. Tesla, which delivered about 2,650 vehicles last year, isn't required to meet the standard because its volumes are too low, but still generates credits every time it sells a vehicle. The company can sell the credits to other car makers.
The regulatory filing doesn't say which car makers bought the credits.
In 2011, Tesla's credits fetched $2.7 million. In 2010, they brought in $2.8 million. Regulations in California, Arizona, Connecticut, Maine, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Rhode Island and Vermont require the credits to be accumulated and each state will be requiring more over time. By 2018, California will require companies generate emission credits equal to 15% of their sales in the state or face costly fines, including a ban on sales in the state. Car makers can earn partial credits by selling plug-in hybrids and bigger credits by selling hydrogen fuel cell powered vehicles.
Every major car maker is building electric vehicles and launching them first in the states where the requirements exist. So far, sales of electric vehicles have been small. Fewer than 20,000 fully electric cars were sold in the U.S. last year in a market of 14.5 million.
Tesla, which recently reported an annual loss of $396.2 million on revenue of $413.3 million for 2012, also disclosed that it had amended its agreement with the U.S. government to repay its $465 million loan in 28 quarterly installments rather than 40. Tesla began paying the loan in December and it is set to expire in 10 years.
As part of the early termination agreement, the U.S. has warrants to purchase 3,085,011 shares of Tesla stock at $7.54 beginning in December 2018. The stock was recently trading at $38.47.
Write to Mike Ramsey at
Credit: By Mike Ramsey
Subject: Electric vehicles; Automobile industry; Fuel cells; Fines & penalties
Location: Maine United States--US Maryland Connecticut Arizona California Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Mar 8, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1315212692
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1315212692?accountid=7117
Copyright: (c) 2013 Dow Jon es & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Sees First-Ever Quarterly Profit
Author: Ramsey, Mike; Stynes, Tess
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Apr 2013: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. said it would report a first-quarter profit, sending the luxury electric-car maker's shares surging 16% on Monday.
Full text: Tesla Motors Inc. said it would report a first-quarter profit, sending the luxury electric-car maker's shares surging 16% on Monday.
The Palo Alto, Calif., maker of $70,000 vehicles lifted its forecast for the quarter after delivering more Model S electric vehicles than it previously forecast. Tesla has a backlog of 15,000 orders and books revenue for the vehicles as soon as they are shipped to customers.
The company, which has reported a loss every quarter since it went public in 2010, said its Model S deliveries reached more than 4,750 vehicles in the first quarter, compared with Tesla's February outlook for 4,500 cars.
In 4 p.m. Nasdaq Stock Market trading, Tesla shares finished up $6.04 at $43.93.
Analysts polled by Thomson Reuters had projected a first-quarter loss of seven cents a share for Tesla.
The disclosure, made late Sunday, came a few days after Chief Executive Officer Elon Musk had used Twitter to foreshadow news coming from the Silicon Valley car maker.
"I am incredibly proud of the Tesla team for their outstanding work. There have been many car startups over the past several decades, but profitability is what makes a company real. Tesla is here to stay and keep fighting for the electric car revolution," Mr. Musk said in a statement.
A Tesla representative said the profit forecast wasn't the big announcement that Mr. Musk alluded to, and later added the company would make an announcement on Tuesday.
In a message posted last week on Twitter, Mr. Musk said a "really exciting" bit of news was to come and that he was going to "put my money where my mouth is in v[ery] major way." He later said he had to delay the announcement so as not to create any end-of-quarter distractions.
The profit forecast for Tesla comes at a critical time as investors had been waiting to see if the company could ever move beyond the startup stage in an industry where even long-established giants have struggled to compete.
Tesla also said it would no longer offer the 40-kilowatt-hour battery pack with the Model S. That option, which allowed buyers to buy a car that cost around $60,000, is being discontinued because of lack of demand. The smaller battery pack offered an estimated range of 160 miles, compared with 230 miles for the 60 kWh version.
The 60 kWh Model S, the next largest battery size, starts at just under $70,000. Buyers may be eligible for a $7,500 federal tax credit for a vehicle's purchase.
Tesla said it would give customers who ordered the smaller pack a 60 kWh model, but limit its range electronically, unless they choose to pay for the upgrade.
Tesla last month said in regulatory filings that it shortened its $465 million loan term by nearly five years.
Last year, the company booked $40.5 million for selling pollution tax credits to other auto makers, an amount that equaled almost 10% of its total annual revenue. Higher sales this year would generate more credits and could be a significant source of earnings.
The company in February had reported a wider fourth-quarter loss and promised new cost cuts, but said production of its Model S sedan was running at a rate of 20,000 vehicles a year, a key benchmark for investors.
At the time, Mr. Musk said he was confident the company would be narrowly profitable this quarter, and forecast deliveries of 20,000 Model S battery-powered sedans this year.
Write to Mike Ramsey at and Tess Stynes at
Credit: By Mike Ramsey and Tess Stynes
Subject: Financial performance; Automobile industry; Corporate profits; Vehicles; Investments; Losses
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Apr 1, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1321935501
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1321935501?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Corporate News: Tesla Expects Profit as Car Deliveries Pick Up
Author: Ramsey, Mike; Stynes, Tess
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Apr 2013: B.3.
ProQuest document link
Abstract:
Tesla Motors Inc. said it would report a first-quarter profit, sending the luxury electric-car maker's shares surging 16% on Monday.
Full text: Tesla Motors Inc. said it would report a first-quarter profit, sending the luxury electric-car maker's shares surging 16% on Monday.
The Palo Alto, Calif., maker of $70,000 vehicles lifted its forecast for the quarter after delivering more Model S electric vehicles than it previously forecast. Tesla has a backlog of 15,000 orders and books revenue for the vehicles as soon as they are shipped to customers.
The company, which has reported a loss every quarter since it went public in 2010, said its Model S deliveries reached more than 4,750 vehicles in the first quarter, compared with Tesla's February outlook for 4,500 cars.
In 4 p.m. Nasdaq Stock Market trading, Tesla shares finished up $6.04 at $43.93.
Analysts polled by Thomson Reuters had projected a first-quarter loss of seven cents a share for Tesla.
The disclosure, made late Sunday, came a few days after Chief Executive Officer Elon Musk had used Twitter to foreshadow news coming from the Silicon Valley car maker.
"I am incredibly proud of the Tesla team for their outstanding work. There have been many car startups over the past several decades, but profitability is what makes a company real. Tesla is here to stay and keep fighting for the electric car revolution," Mr. Musk said in a statement.
A Tesla representative said the profit forecast wasn't the big announcement that Mr. Musk alluded to, and later added the company would make an announcement on Tuesday.
In a message posted last week on Twitter, Mr. Musk said a "really exciting" bit of news was to come and that he was going to "put my money where my mouth is in v[ery] major way." He later said he had to delay the announcement so as not to create any end-of-quarter distractions.
The profit forecast for Tesla comes at a critical time as investors had been waiting to see if the company could ever move beyond the startup stage in an industry where even long-established giants have struggled to compete.
Tesla also said it would no longer offer the 40-kilowatt-hour battery pack with the Model S. That option, which allowed buyers to buy a car that cost around $60,000, is being discontinued because of lack of demand. The smaller battery pack offered an estimated range of 160 miles, compared with 230 miles for the 60 kWh version.
The 60 kWh Model S, the next largest battery size, starts at just under $70,000. Buyers may be eligible for a $7,500 federal tax credit for a vehicle's purchase.
Tesla said it would give customers who ordered the smaller pack a 60 kWh model, but limit its range electronically, unless they choose to pay for the upgrade.
Tesla last month said in regulatory filings that it shortened its $465 million loan term by nearly five years.
Last year, the company booked $40.5 million for selling pollution tax credits to other auto makers, an amount that equaled almost 10% of its total annual revenue. Higher sales this year would generate more credits and could be a significant source of earnings.
The company in February had reported a wider fourth-quarter loss and promised new cost cuts, but said production of its Model S sedan was running at a rate of 20,000 vehicles a year, a key benchmark for investors.
Subscribe to WSJ:
Credit: By Mike Ramsey and Tess Stynes
Subject: Financial performance; Corporate profits; Electric vehicles; Investments; Automobile production
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2013
Publication date: Apr 2, 2013
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1322194184
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1322194184?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tweets Lift Tesla's Shares; Lease Offer Deflates Them
Author: White, Joseph B
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Apr 2013: n/a.
ProQuest document link
Abstract:
Tesla will soon face competition in the plug-in luxury car market from more established, better capitalized rivals, including Germany's BMW AG, Daimler AG, Volkswagen AG and General Motors Co.'s Cadillac brand, which plans to launch a luxury car with plug-in hybrid technology similar to the Chevrolet Volt.
Full text: Tesla Motors Inc., after building anticipation for several days with social media teasers promising a significant development, on Tuesday said it would do what all other makers have done for years: offer lease financing on its cars.
Palo Alto, Calif.-based Tesla said it has arranged with US Bank and Wells Fargo to structure leases that allow consumers to put the value of federal and state electric-car tax credits, which range from $7,500 to $15,000, toward the cost of a down payment.
The company said the financing deal, which combines elements of a five-year loan and a three-year lease, would allow customers with good credit to put 10% down on a Tesla Model S sedan that costs about $80,000 and drive it for about $1,199 a month out of pocket for up to 66 months.
Tesla shares fell 2% in after-hours trading after closing up 41 cents at $44.34 in 4 p.m. trading on the Nasdaq Stock Market. The stock is up more than $6 since its March 28 close.
Like established luxury car brands, Tesla's plan would take back its cars at the end of the lease. It is guaranteeing Model S customers they'll receive a trade-in value equivalent to that of a Mercedes-Benz S-class sedan. The company said its Chief Executive Elon Musk "is personally standing behind that guarantee to give customers absolute peace of mind about the value of the asset they are purchasing."
Tesla's lease caps several days of anticipation touched off when Mr. Musk tweeted last week that he had a "really exciting @Tesla announcement coming" and that he was "going to put my money where my mouth is in v[ery] major way."
Tesla reckons that avoided gasoline costs and business tax deductions would lower the $1,199 monthly cost to about $543 a month. For example, Tesla's savings figure about $100 a month from not going to a gas station to fill up, time it values at $100 an hour.
The calculated $543 monthly cost in this examples is competitive with discounted leases offered on luxury models such as a BMW AG's 5 series or a Mercedes-Benz E-Class sedan.
After first three years, Tesla would offer to repurchase the Model S at a rate similar to residual values on a Mercedes-Benz S-class, currently about 43% of sticker price after three years. Or the customer could keep the vehicle until the 66 month term is up.
In a tweet earlier Tuesday, Mr. Musk hinted there are more announcements to come. "Today's Tesla announcement is actually the 2nd in a 5 part trilogy (love Douglas Adams)," he posted.
Tesla shares soared more than 16% on Monday after it said it would turn a solid profit for the first quarter, beating the company's previous forecast of a modest gain.
Analysts say Tesla's biggest challenge remains proving that it can generate enough cash by selling cars, pollution credits or shares to pay the steep costs of engineering and launching new models over the long haul.
Mr. Musk said in February that he expects to raise the roughly $200 million needed to launch his Model X electric sport utility from the company's cash flow. The company signaled in its latest annual report that the Model X will launch late next year, instead of early in 2014 as previously forecast. Mr. Musk is also promising a less expensive, higher volume model. And eventually he will need to replace the current Model S.
Morgan Stanley analyst Adam Jonas says Tesla will need the Model S and the Model X to combine for more than 40,000 sales a year to generate enough cash to fund future product programs--and even that level of sales leaves "no room for error," he said.
Tesla will soon face competition in the plug-in luxury car market from more established, better capitalized rivals, including Germany's BMW AG, Daimler AG, Volkswagen AG and General Motors Co.'s Cadillac brand, which plans to launch a luxury car with plug-in hybrid technology similar to the Chevrolet Volt.
LMC Automotive analyst Jeff Schuster projects the number of plug-in models priced at $60,000 or above--about that of the Model S--will expand to 19 by 2017 from 15 this year. LMC projects the total premium plug-in market will grow to more than 71,000 vehicles by 2017 from about 14,500 vehicles this year. "That market is becoming more intensely competitive," Mr. Schuster says.
Last year, it collected $40.5 million--about 10% of its total revenue--selling credits earned from states to other auto makers, according to the company's annual financial report. In February, Tesla shares fell by 10% after it reported falling short of its production targets for the fourth quarter of 2012. Mr. Musk said he was confident the company would overcome its production bottlenecks and make a profit in the first quarter.
Still, less than a month ago, Tesla shares were trading at just over $35 a share, and much of the talk about the company had to do with a February spat, conducted largely via Twitter, between Mr. Musk and an auto writer at the New York Times who wrote an article critical of the Model S's cold weather driving range.
Since then, abetted in part by Mr. Musk's use of his Twitter account to promote good news, Tesla shares climbed as high as $45.50. The announcement earlier this week that Tesla would make an unspecified net profit for the first quarter sent the stock soaring.
Mike Ramsey contributed to this article.
Write to Joseph B. White at
Credit: By Joseph B. White
Subject: Automobile industry; Luxury automobiles; Cost control
Location: Palo Alto California
Company / organization: Name: Wells Fargo & Co; NAICS: 522110, 551111; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Tesla Motors Inc; NAICS: 336999
Product name: Chevrolet Volt, Mercedes-Benz E-Class
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Apr 2, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1322548849
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1322548849?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tweets Lift Tesla's Shares; Lease Offer Deflates Them
Author: White, Joseph B
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Apr 2013: n/a.
ProQuest document link
Abstract:
Tesla will soon face competition in the plug-in luxury car market from more established, better capitalized rivals, including Germany's BMW AG, Daimler AG, Volkswagen AG and General Motors Co.'s Cadillac brand, which plans to launch a luxury car with plug-in hybrid technology similar to the Chevrolet Volt.
Full text: Tesla Motors Inc., after building anticipation for several days with social-media teasers promising a significant development, on Tuesday said it would do what all other makers have done for years: offer lease financing on its electric cars.
Tesla said it has arranged with U.S. Bancorp and Wells Fargo to structure leases that allow consumers to put the value of federal and state electric-car tax credits, which range from $7,500 to $15,000, toward the cost of a down payment.
The Palo Alto, Calif., company said the financing deal, which combines elements of a five-year loan and a three-year lease, would allow customers with good credit to put 10% down on a Tesla Model S sedan that costs about $80,000 and drive it for about $1,199 a month out of pocket for up to 63 months.
Tesla shares fell 2.3% in after-hours trading after closing up 41 cents at $44.34 in 4 p.m. trading on the Nasdaq Stock Market. The stock is up more than $6 since its March 28 close.
Like established luxury-car brands, Tesla's plan would take back its cars at the end of the lease. It is guaranteeing Model S customers they'll receive a trade-in value equivalent to that of a Mercedes-Benz S-class sedan.
The company said its Chief Executive Elon Musk "is personally standing behind that guarantee to give customers absolute peace of mind about the value of the asset they are purchasing."
Tesla's lease caps several days of anticipation touched off when Mr. Musk tweeted last week that he had a "really exciting @Tesla announcement coming" and that he was "going to put my money where my mouth is in v[ery] major way."
What customers would pay out of pocket will vary considerably based on their financial circumstances. A calculator on Tesla's website indicates that avoided gasoline costs and business tax deductions would lower the $1,199 monthly cost for its more expensive model, with a 265-mile government certified range, to about $543 a month. That figure includes about $100 a month from not going to a gas station to fill up, time Tesla values at $100 an hour.
Mr. Musk, in an interview, said that Tesla's less expensive model, with a 208-mile range, could be acquired for an out-of-pocket monthly payment of about $500 if the customer could take business tax deductions for the car.
Promoting the Model S at $500 a month will put the car on a more competitive footing with discounted leases periodically offered on luxury models such as a BMW AG's 5 series or a Mercedes-Benz E-Class sedan.
After first three years, Tesla would offer to repurchase the Model S at a rate similar to residual values on a Mercedes-Benz S-class, currently about 43% of sticker price after three years. Or the customer could keep the vehicle until the 63-month term is up.
In a tweet earlier Tuesday, Mr. Musk hinted there are more announcements to come. "Today's Tesla announcement is actually the 2nd in a 5 part trilogy (love Douglas Adams)," he posted.
Tesla shares soared more than 16% on Monday after it said it would turn a solid profit for the first quarter, beating the company's previous forecast of a modest gain.
Analysts say Tesla's biggest challenge remains proving that it can generate enough cash by selling cars, pollution credits or shares to pay the steep costs of engineering and launching new models over the long haul.
Mr. Musk said in February that he expects to raise the roughly $200 million needed to launch his Model X electric sport utility from the company's cash flow. The company signaled in its latest annual report that the Model X will launch late next year, instead of early in 2014 as previously forecast. Mr. Musk is also promising a less expensive, higher volume model. And eventually he will need to replace the current Model S.
Morgan Stanley analyst Adam Jonas says Tesla will need the Model S and the Model X to combine for more than 40,000 sales a year to generate enough cash to fund future product programs--and even that level of sales leaves "no room for error," he said.
Tesla will soon face competition in the plug-in luxury car market from more established, better capitalized rivals, including Germany's BMW AG, Daimler AG, Volkswagen AG and General Motors Co.'s Cadillac brand, which plans to launch a luxury car with plug-in hybrid technology similar to the Chevrolet Volt.
LMC Automotive analyst Jeff Schuster projects the number of plug-in models priced at $60,000 or above--about that of the Model S--will expand to 19 by 2017 from 15 this year. LMC projects the total premium plug-in market will grow to more than 71,000 vehicles by 2017 from about 14,500 vehicles this year. "That market is becoming more intensely competitive," Mr. Schuster says.
Last year, Tesla collected $40.5 million--about 10% of its total revenue--selling credits earned from states to other auto makers, according to the company's annual financial report. In February, Tesla shares fell by 10% after it reported falling short of its production targets for the fourth quarter of 2012. Mr. Musk said he was confident the company would overcome its production bottlenecks and make a profit in the first quarter.
Still, less than a month ago, Tesla shares were trading at just over $35 a share, and much of the talk about the company had to do with a February spat, conducted largely via Twitter, between Mr. Musk and an auto writer at the New York Times who wrote an article critical of the Model S's cold weather driving range.
Since then, abetted in part by Mr. Musk's use of his Twitter account to promote good news, Tesla shares climbed as high as $45.50. The announcement earlier this week that Tesla would make an unspecified net profit for the first quarter sent the stock soaring.
Mike Ramsey contributed to this article.
Corrections & Amplifications Tesla revised the terms of its auto loan calculator to 63 months from 66 months after an earlier version of this article was first published.
Write to Joseph B. White at
Credit: By Joseph B. White
Subject: Automobile industry; Costs; Tax deductions
Company / organization: Name: US Bancorp-Minneapolis MN; NAICS: 522110, 551111; Name: Wells Fargo & Co; NAICS: 522110, 551111; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Tesla Motors Inc; NAICS: 336999
Product name: Chevrolet Volt, Mercedes-Benz E-Class
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Apr 3, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1322552092
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/ 1322552092?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Corporate News: Tweets Lift Tesla's Shares; Lease Offer Deflates Them
Author: White, Joseph B
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Apr 2013: B.3.
ProQuest document link
Abstract:
Promoting the Model S at $500 a month will put the car on a more competitive footing with discounted leases periodically offered on luxury models such as a BMW AG's 5 series or a Mercedes-Benz E-Class sedan.
Full text: Tesla Motors Inc., after building anticipation for several days with social-media teasers promising a significant development, on Tuesday said it would do what all other makers have done for years: offer lease financing on its electric cars.
Tesla said it has arranged with U.S. Bancorp and Wells Fargo to structure leases that allow consumers to put the value of federal and state electric-car tax credits, which range from $7,500 to $15,000, toward the cost of a down payment.
The Palo Alto, Calif., company said the financing deal, which combines elements of a five-year loan and a three-year lease, would allow customers with good credit to put 10% down on a Tesla Model S sedan that costs about $80,000 and drive it for about $1,199 a month out of pocket for up to 66 months.
Tesla shares fell 2.3% in after-hours trading after closing up 41 cents at $44.34 in 4 p.m. trading on the Nasdaq Stock Market. The stock is up more than $6 since its March 28 close.
Like established luxury-car brands, Tesla's plan would take back its cars at the end of the lease. It is guaranteeing Model S customers they'll receive a trade-in value equivalent to that of a Mercedes-Benz S-class sedan.
The company said its Chief Executive Elon Musk "is personally standing behind that guarantee to give customers absolute peace of mind about the value of the asset they are purchasing."
Tesla's lease caps days of anticipation touched off when Mr. Musk tweeted last week that he had a "really exciting @Tesla announcement coming" and that he was "going to put my money where my mouth is in v[ery] major way."
What customers would pay out of pocket will vary considerably based on their financial circumstances. A calculator on Tesla's website indicates that avoided gasoline costs and business tax deductions would lower the $1,199 monthly cost for its more expensive model, with a 265-mile government certified range, to about $543 a month. That figure includes about $100 a month from not going to a gas station to fill up, time Tesla values at $100 an hour.
Mr. Musk, in an interview, said that Tesla's less expensive model, with a 208-mile range, could be acquired for an out-of-pocket monthly payment of about $500 if the customer could take business tax deductions for the car.
Promoting the Model S at $500 a month will put the car on a more competitive footing with discounted leases periodically offered on luxury models such as a BMW AG's 5 series or a Mercedes-Benz E-Class sedan.
In a tweet earlier Tuesday, Mr. Musk hinted there are more announcements to come. "Today's Tesla announcement is actually the 2nd in a 5 part trilogy (love Douglas Adams)," he posted.
Tesla shares soared more than 16% Monday after it said it would turn a solid profit for the first quarter, beating the company's previous forecast of a modest gain.
Analysts say Tesla's biggest challenge remains proving that it can generate enough cash by selling cars, pollution credits or shares to pay the steep costs of engineering and launching new models over the long haul.
Mr. Musk said in February that he expects to raise the roughly $200 million needed to launch his Model X electric sport utility from the company's cash flow. The company signaled in its latest annual report that the Model X will launch late next year, instead of early in 2014 as previously forecast. Mr. Musk is also promising a less expensive, higher volume model. And eventually he will need to replace the current Model S.
Morgan Stanley analyst Adam Jonas says Tesla will need the Model S and the Model X to combine for more than 40,000 sales a year to generate enough cash to fund future product programs -- and even that level of sales leaves "no room for error," he said.
Tesla will soon face competition in the plug-in luxury car market from more established rivals, including Germany's BMW AG, Daimler AG, Volkswagen AG and General Motors Co.'s Cadillac brand, which plans to launch a luxury car with plug-in hybrid technology similar to the Chevrolet Volt.
---
Mike Ramsey contributed to this article.
Subscribe to WSJ:
Credit: By Joseph B. White
Subject: Automobile industry; Costs; Tax deductions; Electric vehicles; Leases
Location: Palo Alto California
Company / organization: Name: US Bancorp-Minneapolis MN; NAICS: 522110, 551111; Name: Wells Fargo & Co; NAICS: 522110, 551111; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Tesla Motors Inc; NAICS: 336999
Product name: Mercedes-Benz E-Class
Classification: 9190: United States; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2013
Publication date: Apr 3, 2013
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1322634477
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1322634477?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla's Not-So-New Deal
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Apr 2013: n/a.
ProQuest document link
Abstract:
Roughly a third relate to tax benefits if you drive the car for business purposes: great for fleet-buyers, less of a slam-dunk for individuals. [...]base line assumptions on fuel savings such as $5 gasoline, a competing sedan getting just 19 miles to the gallon, and an 11 cent per kilowatt-hour cost of electricity, all look too favorable for Tesla.
Full text: Tesla Motors may be building the car of the future, but it retains the spirit of old Detroit in one key respect: aggressive marketing.
Late Tuesday, the electric-vehicle maker outlined a new leasing program, an announcement hotly anticipated due to mysterious tweets sent beforehand by Chief Executive Elon Musk. The day before, the company surprised by saying it had beaten its first-quarter deliveries target and would now show a profit for the period under generally accepted accounting standards.
The net result: Tesla's stock hit an all-time high of almost $47 on Monday and, despite slipping back, is still up 9% this week.
But exactly what has changed? The key aspect of the new financing plan is Tesla's offer to buy a leased Model S sedan back after three years at a price linked to the equivalent depreciation of a similar luxury car, personally guaranteed by Mr. Musk.
If that means Mr. Musk will personally buy those cars if Tesla can't, that raises the question of whether his own finances will be detailed in future company accounts. In any case, while this alleviates one risk for potential buyers--no one really knows yet what a used all-electric vehicle is worth--it offers only incremental help with Tesla's main issue: Its cars remain very expensive.
This is emphasized by Tesla's "True Cost of Ownership" calculator on its website. Under the preprogrammed scenario, the all-in monthly cost--for a 60 kWh Model S bought in California--of $1,097 drops to $471 due to a series of savings.
But the savings are highly malleable. Roughly a third relate to tax benefits if you drive the car for business purposes: great for fleet-buyers, less of a slam-dunk for individuals. Moreover, base line assumptions on fuel savings such as $5 gasoline, a competing sedan getting just 19 miles to the gallon, and an 11 cent per kilowatt-hour cost of electricity, all look too favorable for Tesla.
Then there is the additional savings of a driver's time by not, for example, having to visit a gas station. Tesla suggests valuing this at $100 an hour. But like the perceived costs associated with range-anxiety for electric-vehicle drivers, this is subjective: Why not shoot for $1,000? Under that scenario, you are being paid to own a Tesla.
Meanwhile, Ben Schuman, analyst at Pacific Crest Securities, reminds investors that Monday's sales guidance was up just 6% above its target. He adds that one-time effects could help explain the new profit guidance. Mr. Schuman questions if all that really warranted Monday's 16% stock-price jump and suggests some short sellers, knowing from Mr. Musk's tweets that another announcement was imminent, chose to cover positions. Indeed, the stock slipped around 8% Wednesday.
Regardless, while Tesla's innovation in technology and financing is welcome, its stock price still owes much to option value. That much hasn't changed in the past few days.
Write to Liam Denning at
Credit: By Liam Denning
Subject: Profits; Cost control
Location: Detroit Michigan California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: Pacific Crest Securities; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Apr 3, 2013
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1323161035
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1323161035?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-19
Database: The Wall Street Journal
Tesla Motors Revamps Sales Program
Author: Ramsey, Mike; White, Joseph B
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2013: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. said it revamped a month-old sales program that guarantees the resale value of its about $70,000 plug-in electric car after the program was widely criticized.
Full text: Tesla Motors Inc. said it revamped a month-old sales program that guarantees the resale value of its about $70,000 plug-in electric car after the program was widely criticized.
A new offer guarantees that the Model S will be worth at least 50% of its original cost after three years, up from 43%. As part of its new financing program, Tesla would agree to buy cars back from owners at that price, regardless of third-party estimates of what the car might be worth.
The Palo Alto, Calif., company also is revising an online calculator to determine the monthly cost of a lease-to-purchase program. The revision would make the cost savings estimate more conservative by excluding such factors as time saved by not having to pump gas. Features of Tesla's earlier online cost calculator had prompted criticism for lowering the monthly payment presented to shoppers by using noncash savings.
"When we did our first financing announcement a month ago, we didn't get it quite right," Chief Executive Elon Musk said in a conference call. "This is backed by me personally to give peace of mind about the long-term value of the product."
The deal also set up a lease residual at that three-year level. Critics said the S-class wasn't a good vehicle to peg the value, so Tesla then used the average of all its competitors in the same class of vehicle and raised the percentage to 50%.
"If we really believe we are making the best car, we should provide the best resale values," Mr. Musk said. The offer will be retroactive for customers who bought their Teslas under the original deal.
The result could mean a lease payment that falls to $800 from around $1,100 for a Model S with a 60 kilowatt-hour battery pack, Mr. Musk said. Additionally, Tesla now will offer loans of up to 72 months instead of topping out at 63 months.
"We appreciate the feedback from a number of journalists and customers that the first version of our financing product wasn't quite right. They were right, so we are fixing it and, moreover, upping the ante by providing the best resale value guarantee in the automotive industry," Mr. Musk said.
Write to Mike Ramsey at and Joseph B. White at
Credit: By Mike Ramsey And Joseph B. White
Subject: Resale value; Automobile industry
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: May 3, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1348166424
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1348166424?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Battery-Driven Tesla May Run Out of Juice
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 May 2013: n/a.
ProQuest document link
Abstract:
Since global auto makers lose thousands of dollars per vehicle on electric cars today, the prospects are hazy.
Full text: Now that's acceleration.
Without so much as a puff of smoke, Tesla Motors Inc.'s stock has rallied an incredible 64% this year. One catalyst: an announcement last month that it had reached "full profitability" for the quarter through March. Analysts don't seem so sure, though, projecting the company on Wednesday will report a loss of seven cents a share.
Rather than quibble over a few million dollars here or there, investors need to focus on the big picture of a car maker now worth $6.6 billion that has attracted many skeptical "short" sellers betting against the stock. Even with sales seen surging more than sixfold to over 20,000 cars this year, that is a debt-adjusted market value per vehicle some 90 times as high as at General Motors Co. Is Tesla worth it?
Comparing a Tesla to any GM car, even the Volt, is like mixing apples and oranges, of course. The $100,000 price tag for Tesla's best-selling model puts it in the realm of high-end luxury, as does its projected gross margin of 25%. And 20,000 units is substantial for a car maker in that category--four times the combined U.S. sales of Maserati, Lamborghini and Ferrari. It is also double the U.S. sales of the market's leading purely electric vehicle, the Nissan Leaf.
Those sales look achievable for now given a long waiting list from wealthy, environmentally conscious buyers. More troubling is what drives Tesla's margin. With state and federal subsidies of $10,000 per car sold in California and state emissions credits potentially worth thousands more, much of that profit could be erased in a few strokes of a government pen.
Investors confident enough that subsidies will remain in place for what is a luxury item still have to mull the car maker's long-term earnings goals. These hinge on Tesla becoming a profitable mass-market manufacturer. Since global auto makers lose thousands of dollars per vehicle on electric cars today, the prospects are hazy. One dramatic step taken recently by Chief Executive Elon Musk was personally guaranteeing the resale value of the Model S will be the highest of any luxury sedan.
Even for a billionaire, that is quite an undertaking for a car with a battery that deteriorates over time. Unfortunately for shareholders, he hasn't made a similar offer for the stock.
Write to Spencer Jakab at
Credit: By Spencer Jakab
Subject: Automobile industry; Investments
Location: United States--US California
People: Musk, Elon
Company / organization: Name: Maserati; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: May 7, 2013
column: Ahead of the Tape
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1348937985
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1348937985?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-19
Database: The Wall Street Journal
Tesla Site Powers Ahead; Long Island Laboratory Used by Electricity Pioneer Is Bought by Nonprofit Group
Author: Will, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 May 2013: n/a.
ProQuest document link
Abstract:
Friends of Science East hopes to establish a Tesla museum, a science learning center, workshops for inventors and a physics-themed playground on the overgrown property, where several buildings have stood vacant for decades.
Full text: A Long Island nonprofit has purchased the last remaining laboratory of Nikola Tesla, the scientist who pioneered the alternating-current system of delivering electricity and dreamed of transmitting electric power through the air.
The nonprofit, Friends of Science East, worked for 16 years to acquire and preserve the property known as Wardenclyffe in Shoreham, N.Y., before raising more than $1.3 million in online contributions during a 45-day fund drive last year.
Matthew Inman, the cartoonist behind the Oatmeal, a humor website, organized and promoted the fundraiser, helping surpass the original goal of $850,000 in just six days. More than 33,000 people from 108 countries contributed to the drive.
Friends of Science East purchased the 16-acre property from Agfa-Gevaert Group for $850,000 on May 2. The Belgian maker of analog and digital imaging systems has owned the site since 1969 but stopped manufacturing there in 1987.
Friends of Science East hopes to establish a Tesla museum, a science learning center, workshops for inventors and a physics-themed playground on the overgrown property, where several buildings have stood vacant for decades.
"We still have a long way to go toward the ultimate goal of a completed science center," said Jane Alcorn, a retired schoolteacher who leads the nonprofit. "So we're, for the moment, taking a deep breath and enjoying the success, but we're also recognizing the work that's ahead of us."
Ms. Alcorn said the group needs to raise an estimated $10 million to bring its plans to fruition. It has started boarding up and locking buildings, and plans to assess which ones can be restored and incorporated into plans for the site and which must be razed.
Tesla, who died in 1943, purchased Wardenclyffe in 1901 and built a 187-foot tower, which he hoped to use to send wireless Morse code messages and to transmit electricity through the atmosphere.
After experimenting with the spire, he lost his equipment to creditors and sold the property in 1915. The tower was demolished, but Tesla's brick laboratory building still stands.
Ms. Alcorn said she's relieved someone else didn't buy the property and knock down the laboratory.
"It's very gratifying feeling to see the fruits of your labor come to a kind of conclusion where we can actually now say we've saved the site and can move to the next phase," she said.
Christopher Santomassimo, North American general counsel for Agfa-Gevaert, said the company "is proud to be associated, albeit in a small way, with this historic event."
Credit: By Will James
Subject: Science; Electricity distribution
Location: Long Island New York
Company / organization: Name: Agfa-Gevaert; NAICS: 339112, 333293, 333315
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: May 8, 2013
Section: New York
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1349027488
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1349027488?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Property: Tesla Site Powers Ahead --- Long Island Laboratory Used by Electricity Pioneer Is Bought by Nonprofit Group
Author: Will, James
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 May 2013: A.22.
ProQuest document link
Abstract:
Friends of Science East hopes to establish a Tesla museum, a science learning center, workshops for inventors and a physics-themed playground on the overgrown property, where several buildings have stood vacant for decades.
Full text: A Long Island nonprofit has purchased the last remaining laboratory of Nikola Tesla, the scientist who pioneered the alternating-current system of delivering electricity and dreamed of transmitting electric power through the air.
The nonprofit, Friends of Science East, worked for 16 years to acquire and preserve the property known as Wardenclyffe in Shoreham, N.Y., before raising more than $1.3 million in online contributions during a 45-day fund drive last year.
Matthew Inman, the cartoonist behind the Oatmeal, a humor website, organized and promoted the fundraiser, helping surpass the original goal of $850,000 in just six days. More than 33,000 people from 108 countries contributed to the drive.
Friends of Science East purchased the 16-acre property from Agfa-Gevaert Group for $850,000 on May 2. The Belgian maker of analog and digital imaging systems has owned the site since 1969 but stopped manufacturing there in 1987.
Friends of Science East hopes to establish a Tesla museum, a science learning center, workshops for inventors and a physics-themed playground on the overgrown property, where several buildings have stood vacant for decades.
"We still have a long way to go toward the ultimate goal of a completed science center," said Jane Alcorn, a retired schoolteacher who leads the nonprofit. "So we're, for the moment, taking a deep breath and enjoying the success, but we're also recognizing the work that's ahead of us."
Ms. Alcorn said the group needs to raise an estimated $10 million to bring its plans to fruition. It has started boarding up and locking buildings, and plans to assess which ones can be restored and incorporated into plans for the site and which must be razed.
Tesla, who died in 1943, purchased Wardenclyffe in 1901 and built a 187-foot tower, which he hoped to use to send wireless Morse code messages and to transmit electricity through the atmosphere.
After experimenting with the spire, he lost his equipment to creditors and sold the property in 1915. The tower was demolished, but Tesla's brick laboratory building still stands.
Ms. Alcorn said she's relieved someone else didn't buy the property and knock down the laboratory.
"It's very gratifying feeling to see the fruits of your labor come to a kind of conclusion where we can actually now say we've saved the site and can move to the next phase," she said.
Christopher Santomassimo, North American general counsel for Agfa-Gevaert, said the company "is proud to be associated, albeit in a small way, with this historic event."
Subscribe to WSJ:
Credit: By Will James
Subject: Laboratories; Real estate; Historic buildings & sites; Nonprofit organizations
Location: Shoreham New York
People: Tesla, Nikola
Company / organization: Name: Agfa-Gevaert; NAICS: 339112, 333293, 333315
Classification: 9190: United States; 8360: Real estate
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.22
Publication year: 2013
Publication date: May 8, 2013
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1349075831
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1349075831?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Posts Its First Quarterly Profit
Author: Sweet, Cassandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 May 2013: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. said it earned $11.2 million in the first quarter of 2013 as deliveries of Model S electric vehicles lifted the maker of luxury electric cars to its first quarterly profit.
Full text: Tesla Motors Inc. said it earned $11.2 million in the first quarter of 2013 as deliveries of Model S electric vehicles lifted the maker of luxury electric cars to its first quarterly profit.
The company--which had reported a loss in every quarter since it went public in 2010--said Wednesday it recognized revenue from 4,900 Model S vehicles in the first period, up from the company's previous outlook for 4,500 cars in the quarter.
Revenue totaled $562 million, up from $30.2 million a year ago. On a per-share basis, earnings were zero. Tesla posted a net loss of $89.9 million a year earlier.
Shares of Tesla jumped 18% to $65.76 in after-hours trading Wednesday.
The Palo Alto, Calif., company is trying to become the first successful automotive startup in the U.S. since the 1920s. As recently as six months ago, the company was forced to sell shares to raise cash and avert a liquidity crisis. Also, Tesla had struggled with delayed deliveries from suppliers that slowed production.
Tesla said its production of Model S vehicles was 400 or more per week, for a total of more than 5,000 vehicles during the first quarter. The company has said it needs to produce at a rate of 20,000 vehicles a year to be profitable.
The company said it is receiving orders for more than 20,000 vehicles a year world-wide, and plans to build about 5,000 Model S vehicles in the second quarter. Tesla plans to deliver about 4,500 vehicles in the second quarter and deliver about 21,000 vehicles during 2013.
Of those cars, Tesla is likely to deliver about 15,000 vehicles to customers in North America, 5,000 to Europe and about 1,000 to Asia, Tesla Chairman and Chief Executive Elon Musk said. He added that the company plans to ramp up production after it resolves manufacturing-efficiency issues.
"I think there's potential next year for a fairly significant increase in volume as we test the depth of the demand that's out there," Mr. Musk said during a conference call with analysts. "I think [demand] is probably quite a bit higher than we originally thought."
Mr. Musk added that when the company ramps up production, he expects to see "at least 10,000 units a year from demand in Europe and at least 5,000 in Asia."
Tesla launched a new financing program earlier this year that guarantees the value of the Model S after three years, giving buyers the ability to trade in the vehicle to the company at a designated residual value.
The financing options have made the car more affordable to a wider range of buyers, Mr. Musk said. The company is considering additional changes that would make the Model S more attractive to potential customers, such as reducing the deposit that customers have to put down, from $5,000 currently to "some lower number," Mr. Musk said.
Tesla said that excluding one-time items, adjusted quarterly earnings were $15 million, or 12 cents a share. Gross margin was 17%, up from 8% in the fourth quarter.
Analysts polled by Thomson Reuters had expected earnings of four cents a share on revenue of $500 million.
Mike Ramsey contributed to this article.
Write to Cassandra Sweet at
Credit: By Cassandra Sweet
Subject: Net losses; Financial performance; Vehicles
Location: Europe Asia Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: May 9, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1349435844
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1349435844?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Getting the Short Story on Tesla Motors
Author: Lahart, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 May 2013: n/a.
ProQuest document link
Abstract:
[...]produce an affordable mass-market electric car.
Full text: Some investors bet that Tesla's stock is an accident waiting to happen. So far, the only thing that's gotten wrecked is those investors' own performance.
After announcing its first-ever quarterly profit late Wednesday, the electric-car maker saw its shares surge 24% Thursday. With a market value of $7.9 billion, Tesla is now worth more than Fiat.
That gain in part reflects what Tesla has accomplished. Early on, Chief Executive Elon Musk elucidated a plan: First, build a high-performance electric sports car, to prove it could be done. Second, market a luxury car that broadens Tesla's appeal. Finally, produce an affordable mass-market electric car.
Whether Tesla will pull off that final step is uncertain. Infrastructure that makes owning an electric car practical for most Americans isn't yet in place. Tesla will also have to compete with established auto makers that are making the internal combustion engine far more efficient.
But Tesla has completed the first step, and looks likely to accomplish the second. It now expects to sell 21,000 cars this year, more than the 20,000 it has said it needs to be profitable.
So whatever the probability of Tesla's ultimate success was, say, a year ago, it is higher now. Since its shares largely represent an option on that, they are worth more.
But Thursday's spurt also reflected how many bets investors had placed against Tesla's success. At last count, about 40% of Tesla's freely tradable shares were sold short. The scramble to buy back borrowed shares added gas to Tesla's rally.
Tesla's shares, now trading at about 560 times expected 2013 earnings, look beyond pricey. But investors who bet against the company while it is still managing to tick off the boxes in Mr. Musk's plan are driving fast without a seat belt.
Write to Justin Lahart at
Credit: By Justin Lahart
Subject: Automobile industry; Investments
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: May 9, 2013
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1349588785
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1349588785?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-19
Database: The Wall Street Journal
Getting the Short Story on Tesla Motors
Author: Lahart, Justin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 May 2013: C.8.
ProQuest document link
Abstract:
[...]produce an affordable mass-market electric car.
Full text: [Financial Analysis and Commentary]
Some investors bet that Tesla Motors' stock is an accident waiting to happen. So far, the only thing that's gotten wrecked is those investors' own performance.
After announcing its first-ever quarterly profit Wednesday, the electric-car maker saw its shares surge 24% Thursday. With a market value of $7.9 billion, Tesla is now worth more than Fiat.
That gain in part reflects what Tesla has accomplished. Early on, Chief Executive Elon Musk elucidated a plan: First, build a high-performance electric sports car, to prove it could be done. Second, market a luxury car that broadens Tesla's appeal. Finally, produce an affordable mass-market electric car.
Whether Tesla will pull off that final step is uncertain. Infrastructure that makes owning an electric car practical for most Americans isn't yet in place. Tesla will also have to compete with established auto makers that are making the internal combustion engine far more efficient.
But Tesla has completed the first step, and looks likely to accomplish the second. It now expects to sell 21,000 cars this year, more than the 20,000 it has said it needs to be profitable. So whatever the probability of Tesla's ultimate success was, say, a year ago, it is higher now. Since its shares largely represent an option on that, they are worth more.
But Thursday's spurt also reflected how many bets investors had placed against Tesla's success. At last count, about 40% of Tesla's freely tradable shares were sold short. The scramble to buy back borrowed shares added gas to Tesla's rally.
Tesla's shares, now trading at about 560 times expected 2013 earnings, look beyond pricey. But investors who bet against the company while it is still managing to tick off the boxes in Mr. Musk's plan are driving fast without a seat belt.
Subscribe to WSJ:
Credit: By Justin Lahart
Subject: Automobile industry; Investments; Investment policy; Company reports
Location: United States--US
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 3100: Capital & debt management; 3400: Investment analysis & personal finance; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.8
Publication year: 2013
Publication date: May 10, 2013
column: Heard on the Street
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1349694703
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1349694703?accountid= 7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Day Traders Steer Tesla Higher
Author: Russolillo, Steven; Cheng, Jonathan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 May 2013: n/a.
ProQuest document link
Abstract:
[...]traders in recent years have targeted the shares issued by companies including Netflix Inc., Green Mountain Coffee Roasters Inc. and Priceline.com Inc. In 2010, Chipotle Mexican Grill Inc. hit the radar screen of day traders. At its peak, the stock was trading at 47 times projected future earnings, according to FactSet, more than double that of McDonald's Corp. and Taco Bell operator Yum Brands Inc. Thanks to its rally, the stock market values Tesla, which sold 4,900 cars in the first quarter, at $10.6 billion.
Full text: For weeks, Anne-Marie Baiynd kept a close eye on shares of Tesla Motors Inc.
On May 9, a day after the company posted its first-ever quarterly profit, the stock exploded higher in heavy trading. Ms. Baiynd, a full-time short-term trader since 2006, pounced. From her home office in Charlotte, N.C., the 48-year-old says she scooped up shares at $67.15 and sold them on Monday for a 31% gain.
The very next day, Ms. Baiynd changed tack, she says, successfully betting Tesla would head lower on a day when the shares finished down 14% from their intraday high.
Ms. Baiynd wasn't the only short-term trader flocking to the stock. Over a four-day period starting May 9, an average of 28.3 million Tesla shares changed hands--more than seven times the average this year. Volume surpassed even short-term trading favorite Apple Inc. on those days.
"If you're a trader, you can't not be involved in this name," says Ms. Baiynd.
The action in Tesla is the latest illustration of the power of short-term traders known as "day traders," even though some hold positions for days or even weeks before moving on. Their swarming around a small number of stocks can supercharge moves in the shares, both up and down. The whipsaw trading can complicate longer-term investors' efforts to assess companies' prospects and create volatility that draws the ire of corporate managers.
Such traders in recent years have targeted the shares issued by companies including Netflix Inc., Green Mountain Coffee Roasters Inc. and Priceline.com Inc. In 2010, Chipotle Mexican Grill Inc. hit the radar screen of day traders. Its share price quadrupled over the next two years while trading volume nearly doubled. At its peak, the stock was trading at 47 times projected future earnings, according to FactSet, more than double that of McDonald's Corp. and Taco Bell operator Yum Brands Inc.
Thanks to its rally, the stock market values Tesla, which sold 4,900 cars in the first quarter, at $10.6 billion. Ford Motor Co., which sold nearly 236,000 cars and light trucks in March alone, is valued at $57.6 billion.
For most of its history, Tesla has been a relatively sleepy stock. It went public in late June 2010 at $17 a share. Between July 1, 2010, and March 28 of this year, trading volume averaged 1.3 million shares a day.
Along the way, its mission to produce a commercially viable electric car attracted skepticism. In June 2009, the U.S. Department of Energy gave the company $465 million in federal loans to help launch its pricey Model S series cars, making Tesla and its chief executive, Elon Musk, a target of political broadsides. And in September 2012, the company faced a cash squeeze that forced it to sell millions of new shares.
As 2013 began, Tesla shares slowly pushed higher. The stock spent March bouncing between $35 and $40.
Then, in an announcement before the start of trading April 1, Tesla surprised traders by saying it expected to report a first-quarter profit on better sales of the Model S. The stock jumped 16% that day, moving above $40 for the first time ever in heavy trading.
That move caught the eye of Glenda Pagan, a full-time day trader in Manhattan. To her, it looked like a "gap and go" stock, a situation where the stock was rallying into uncharted territory. In that scenario, she says, "the sky is the limit."
Ms. Pagan, who has been trading stocks since 2004, bought Tesla that day at $42. For the next few days it looked like a losing bet, but by mid-month Tesla was again moving higher and she added to her stake. By month-end, Ms. Pagan sold, taking profits at $47.50 and $51. "Pretty much any trade you entered, if you held it long enough, you made money," she says.
But as Ms. Pagan was buying, short sellers--who sell borrowed shares in hopes of buying them back at lower levels--were also piling in.
The percentage of Tesla shares on loan--a proxy for short-selling activity--stands at about 25% of the shares available for trading, according to data from securities-financing tracker Markit. That compares with an average of 2.3% for stocks in the Standard & Poor's 500-stock index.
One bearish case against Tesla was laid out in mid-April on SumZero, a social-networking site for hedge-fund investors. Zachary Turnage, a portfolio manager at Harbert Management Corp., a Birmingham, Ala., hedge fund, argued Tesla "will continue its history of burning cash, missing expectations and raising capital." The stock, he wrote, "was an excellent shorting opportunity" and predicted it would fall to $10 a share over the next one to two years. A spokesman for Harbert wouldn't comment on whether the firm's funds had taken a short position in Tesla.
A Tesla spokesman declined to comment on the trading activity and didn't make Mr. Musk available for comment.
With Tesla stock above $55 on Wednesday, May 8, the short sellers were feeling significant pain. Their situation got much worse when, after the closing bell, the company reported profit and revenue that topped analysts' expectations.
Shares jumped 57% over the next three trading days. The next day, shares touched an intraday high of $97.12, as trading volume exploded to 37 million shares. Buying from short-sellers forced to close positions was seen fueling the gains.
After Ms. Baiynd made her successful short-term bet that Tesla shares would fall Tuesday, she is on the sidelines but still keeping a close watch on the stock.
"In terms of the ability to pick low-hanging fruit, it's probably at the top of the list," says Ms. Baiynd.
Tom Lauricella contributed to this article.
Write to Steven Russolillo at and Jonathan Cheng at
Credit: By Steven Russolillo and Jonathan Cheng
Subject: Financial performance; Investment policy; Stock prices; Corporate profits
People: Musk, Elon
Company / organization: Name: Priceline.com; NAICS: 454111, 518210, 561599; Name: Chipotle Mexican Grill; NAICS: 722211; Name: Netflix Inc; NAICS: 532230, 451220; Name: Green Mountain Coffee Roasters Inc; NAICS: 424490, 454390, 311920; Name: Ford Motor Co; NAICS: 336111, 336399, 333924; Name: Apple Inc; NAICS: 511210, 334111, 334220; Name: Tesla Motors Inc; NAICS: 336999; Name: Department of Energy; NAICS: 926130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: May 17, 2013
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1352162845
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1352162845?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Offering Reaps More Than $1 Billion; Long-Term Investors Buy Shares, Debt, Joining Day Traders in Hot Stock
Author: Jarzemsky, Matt; Demos, Telis
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 May 2013: n/a.
ProQuest document link
Abstract:
The sale by Tesla Motors Inc. of more than $1 billion worth of stock and convertible debt saw strong demand from long-term investors, people familiar with the deal said, showing that more than just short-term traders are helping fuel the jump in the company's shares.
Full text: The sale by Tesla Motors Inc. of more than $1 billion worth of stock and convertible debt saw strong demand from long-term investors, people familiar with the deal said, showing that more than just short-term traders are helping fuel the jump in the company's shares.
The success of the offering, which saw Tesla's share price rise even after it announced the deal, also signaled that investors may be warming to some clean-technology companies after shunning most such stocks since the financial crisis.
Tesla raised $1.08 billion in the stock and convertible-note offerings priced Thursday night, which included a sale of shares to chief executive and founder Elon Musk. The total raised through the offering was up from the $830 million the company had said it hoped to collect when it announced the sales earlier this week. Those figures assume underwriters exercise options to buy additional shares in the deal.
In recent months, Tesla's shares have attracted growing interest from skeptics who doubted the prospects of the company's luxury-class electric cars. More than a third of the company's available shares were sold short by bearish traders in April, among the highest of recently public companies, according to Markit, the market-data provider. Short sellers borrow a security and sell it, betting that it will be cheaper to buy back later.
But the company's shares rocketed last week after Tesla and raised its forecast for how many cars it expects to sell. Its new Model S vehicle also got a rave review from Consumer Reports. Tesla's share price has risen 64% since May 8, before the earnings release, and is up 170% on the year, closing Friday at $91.50.
Trading volume in the company's shares has also jumped since the earnings announcement, with more than 16 million of its shares changing hands each day. That compares with the stock's 30-day average daily volume of 7.8 million shares, according to FactSet.
Buyers of Thursday's stock offering included funds that had previously backed Tesla in its initial public offering, but also new investors, including European funds and large-cap funds that could invest in the company for the first time as its valuation crossed $10 billion this week, according to people familiar with the deal. Tesla's market capitalization is currently $10.7 billion, according to FactSet.
The company sold 3.4 million shares of stock, or 3.9 million including shares the underwriters may buy, up from a planned 2.7 million, for $92.24 a share, according to a regulatory filing.
That price represents just a one-cent discount to its closing price Thursday--a sign of strong demand. Big blocks of shares typically sell for a discount to the stock's recent going rate as a way to ease the risk buyers take that the share price will fall after the purchase.
In addition, the stock offering priced 8.7% higher than the shares' last close before the deal was announced. Such so-called "file-to-offer" premiums have occurred in just 8% of follow-on stock offerings by U.S.-listed companies this year, according to Dealogic. On average, big share offerings have priced at a 5.6% discount to the shares' last close before deal announcements.
The success of the company's newest car, the Model S, has helped build interest among investors who weren't as impressed by the company's first model, the Roadster, which it launched in 2008.
"As we were making calls to investors, we learned that many people who had driven the Roadster during the IPO and driven the Model S subsequently are now owners of the car," said Stuart Bernstein, global head of the clean technology and renewables group at Goldman Sachs. Goldman was the lead underwriter on Tesla's offerings. "If you're an owner of the car, you become an evangelist for the car, and for the company."
Mr. Bernstein also said some investors were cheered by the fact that Tesla announced plans to repay a Department of Energy loan.
Meanwhile, the convertible-debt offering was successful with yield-seeking investors who also wanted exposure to the company's growth, said the people familiar with the offering.
Unlike in many convertible-bond deals, the buyers of Tesla's debt were primarily looking to buy and hold the investment. Many convertible offerings are also bought by arbitrage traders who buy the bonds for the interest payments, but who sell the shares short at the same time to hedge their exposure. That was difficult in the case of Tesla's offering because such a high portion of the company's stock had already been sold short.
The convertible-bond deal also saw aggressive pricing. Investors agreed to acquire notes carrying a 1.5% coupon, the low end of the 1.5%-to-2% range bankers were pitching, according to people familiar with the deal.
The size of the debt offering was increased twice in two days, to $600 million, putting it in a tie for the fifth-largest convertible-note sale by a U.S.-listed company this year, according to Dealogic. The deal value could rise to $660 million if underwriters purchase additional shares.
Tesla's offering came amid growing momentum for stocks of other clean-tech companies. That includes SolarCity Corp., of which Mr. Musk is chairman. SolarCity's shares have surged to $45 from its December IPO price of $8 a share. Goldman Sachs on Thursday said it was lending $500 million to fund additional solar projects for SolarCity.
The S&P Global Clean Energy index is up 25% so far this year, beating the S&P 500 index's 17% rise since the beginning of the year.
"We identified this space as an attractive opportunity for the firm and in the [technology] industry," said Mr. Bernstein, who is overseeing Goldman's recent commitment of $40 billion to clean-technology lending and financing.
Credit: By Matt Jarzemsky And Telis Demos
Subject: Stock offerings; Clean technology; Investments; Initial public offerings
People: Musk, Elon
Company / organization: Name: Consumer Reports; NAICS: 511120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: May 17, 2013
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1352745346
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1352745346?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Electric Car Startup Tesla Repays U.S. Loan
Author: White, Joseph B
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 May 2013: n/a.
ProQuest document link
Abstract:
Tesla currently has 4,500 workers in the U.S. The company used the federal loan mainly to finance the launch of its about $70,000 Model S battery-powered sedan at a former General Motors Co. and Toyota Motor Corp. joint-venture factory in Fremont, Calif.
Full text: Luxury electric-car maker Tesla Motors Inc. said on Wednesday it has fully repaid a $452 million federal loan it received in 2010, and said it would be able to finance development of its next two vehicles without selling new shares.
Tesla promised earlier this month that it would use some of the proceeds from a $1 billion sale of stock and debt to repay a loan it received during the depths of the financial crisis, when even well-established car makers were scrambling to finance their operations. The company and the U.S. Department of Energy confirmed the repayment on Wednesday.
"Having accepted taxpayer money, I thought we had an obligation to repay it as soon as we reasonably could," Tesla Chief Executive Elon Musk said in an interview with The Wall Street Journal on Wednesday. "If economics were the only consideration, we would not have done this."
After repaying the U.S., Tesla has about $679 million in cash. That, plus anticipated cash flow, should be enough to complete development of its next model, a sport-utility vehicle called the Model X, and a third, lower-priced line that could be launched within three or four years, Mr. Musk said.
Completing the Model X, which is based on the Model S, should cost about $250 million. The third-generation car could cost another $1 billion, he said. But he said Tesla could finance the expansion of its model line without further stock sales. "I believe we have enough funding to get all the way to our third generation," Mr. Musk said.
Tesla currently has 4,500 workers in the U.S. The company used the federal loan mainly to finance the launch of its about $70,000 Model S battery-powered sedan at a former General Motors Co. and Toyota Motor Corp. joint-venture factory in Fremont, Calif.
Mr. Musk said he plans new ways for Tesla owners to rapidly recharge their cars to allow for longer trips between charges. Tesla has indicated in filings with the Securities and Exchange Commissionthat it is working on a way to quickly swap out the batteries of a Model S and to improve its cars' recharging speed through a network of "supercharger" stations.
Tesla was one of five car makers that received loans from the Department of Energy's Advanced Technology Vehicles Manufacturing loan program, which was launched under President George W. Bush and expanded by President Barack Obama. Two recipients, luxury plug-in hybrid maker Fisker Automotive Inc. and the Vehicle Production Group LLC, have halted operations, and it is unclear whether they will repay their loans. Fisker received $192 million, and the Vehicle Production Group received $50 million.
Fisker's troubles prompted a contentious hearing last month before a House subcommittee, during which lawmakers criticized the Obama administration for granting taxpayer-financed loans to the company.
The largest share of the total $8 billion in advanced vehicle loans went to Ford Motor Co., which received $5.9 billion, and Nissan Motor Co.'s North American arm, which borrowed $1.45 billion. Ford and Nissan said they are complying with loan terms, but haven't announced plans to accelerate repayment.
Energy Secretary Ernest Moniz praised Tesla's repayment, and used the occasion to counter Republican attacks on the loan program's overall performance. Out of a $34 billion portfolio of loans to develop new technology to reduce fossil fuel consumption, losses to date represent about 2% of the total, Mr. Moniz said.
Tesla's disclosure of the repayment included a jab at its rivals, saying that it is "the only American car company to have fully repaid the government."
Chrysler Group LLC repaid its loans to the U.S. and Canadian governments. But the company is majority-owned by Italy's Fiat SpA and the Treasury has said it is unlikely it will fully recover about $1.9 billion in loans made to the "old" Chrysler left behind as part of its bankruptcy filing.
General Motors also repaid loans made by the U.S. government as part of its bailout, but the Treasury Department still holds stock in the company and is currently in the red on its total investment.
Write to Joseph B. White at
Credit: By Joseph B. White
Subject: Automobile industry; Research & development--R & D; Loans
Location: United States--US
People: Obama, Barack Bush, George W
Company / organization: Name: Fisker Automotive Inc; NAICS: 336111; Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110; Name: Tesla Motors Inc; NAICS: 336999; Name: Department of Energy; NAICS: 926130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: May 22, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1353644757
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1353644757?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Corporate News: Electric Car Startup Tesla Repays U.S. Loan
Author: White, Joseph B
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]23 May 2013: B.3.
ProQuest document link
Abstract:
Tesla currently has 4,500 workers in the U.S. The company used the federal loan mainly to finance the launch of its about $70,000 Model S battery-powered sedan at a former General Motors Co. and Toyota Motor Corp. joint-venture factory in Fremont, Calif.
Full text: Luxury electric-car maker Tesla Motors Inc. said on Wednesday it has fully repaid a $452 million federal loan it received in 2010, and said it would be able to finance development of its next two vehicles without selling new shares.
Tesla promised earlier this month that it would use some of the proceeds from a $1 billion sale of stock and debt to repay a loan it received during the depths of the financial crisis, when even well-established car makers were scrambling to finance their operations. The company and the U.S. Department of Energy confirmed the repayment on Wednesday.
"Having accepted taxpayer money, I thought we had an obligation to repay it as soon as we reasonably could," Tesla Chief Executive Elon Musk said in an interview with The Wall Street Journal on Wednesday. "If economics were the only consideration, we would not have done this."
After repaying the U.S., Tesla has about $679 million in cash. That, plus anticipated cash flow, should be enough to complete development of its next model, a sport-utility vehicle called the Model X, and a third, lower-priced line that could be launched within three or four years, Mr. Musk said.
Completing the Model X, which is based on the Model S, should cost about $250 million. The third-generation car could cost another $1 billion, he said. But he said Tesla could finance the expansion of its model line without further stock sales. "I believe we have enough funding to get all the way to our third generation," Mr. Musk said.
Tesla currently has 4,500 workers in the U.S. The company used the federal loan mainly to finance the launch of its about $70,000 Model S battery-powered sedan at a former General Motors Co. and Toyota Motor Corp. joint-venture factory in Fremont, Calif.
Mr. Musk said he plans new ways for Tesla owners to rapidly recharge their cars to allow for longer trips between charges. Tesla has indicated that it is working on a way to quickly swap out the batteries of a Model S and to improve its cars' recharging speed through a network of "supercharger" stations.
Tesla was one of five car makers that received loans from the Department of Energy's Advanced Technology Vehicles Manufacturing loan program. Two recipients, luxury plug-in hybrid maker Fisker Automotive Inc. and the Vehicle Production Group LLC, have halted operations, and it is unclear whether they will repay their loans. Fisker received $192 million, and the Vehicle Production Group received $50 million.
The largest share of the total $8 billion in advanced vehicle loans went to Ford Motor Co., which received $5.9 billion, and Nissan Motor Co.'s North American arm, which borrowed $1.45 billion. Ford and Nissan said they are complying with loan terms, but haven't announced plans to accelerate repayment.
Energy Secretary Ernest Moniz praised Tesla's repayment, and used the occasion to counter Republican attacks on the loan program's overall performance. Out of a $34 billion portfolio of loans to develop new technology to reduce fossil fuel consumption, losses to date represent about 2% of the total, Mr. Moniz said.
Tesla's disclosure of the repayment included a jab at its rivals, saying that it is "the only American car company to have fully repaid the government."
Chrysler Group LLC repaid its loans to the U.S. and Canadian governments. But the company is majority-owned by Italy's Fiat SpA and the Treasury has said it is unlikely it will fully recover about $1.9 billion in loans made to the "old" Chrysler left behind as part of its bankruptcy filing.
General Motors also repaid loans made by the U.S. government as part of its bailout, but the Treasury Department still holds stock in the company and is currently in the red on its total investment.
Credit: By Joseph B. White
Subject: Automobile industry; Research & development expenditures; Guaranteed loans; Electric vehicles; Repayments
Location: United States--US
Company / organization: Name: Fisker Automotive Inc; NAICS: 336111; Name: Department of Energy; NAICS: 926130; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2013
Publication date: May 23, 2013
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1353939547
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1353939547?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
The Other Government Motors; Tesla by the numbers: How taxpayers made an electric car company.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 May 2013: n/a.
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Abstract:
A number of states including California require that traditional car makers reach certain production quotas of zero-emission vehicles--or to purchase credits if they cannot. Analysts are also warning that Tesla has yet to show it can sell its very pricey car to a mass market. *** Tesla's investors claim this taxpayer support is worth it if it creates a new electric-car company, and for them it is.
Full text: The list of the Obama Administration's industrial policy failures is long, from Solyndra to Fisker Automotive. But now we are hearing that one success redeems them all: Tesla Motors. Tesla's share price has soared this year on rave reviews for its electric car, growing sales and its first quarterly profit.
Rarely noted is how much this profit is a function of government subsidy and coercion. So let's take apart Tesla by the numbers, if only to give our reader-taxpayers a better sense of what they've paid to make Tesla's owners rich.
The decade-old Tesla debuted its first product, the Roadster, in 2006. With a base price of $109,000, it was discontinued before it hit 2,500 sales. Tesla introduced its Model S a year ago and had sold an estimated 9,650 at a bargain $70,000 through April. By contrast, Ford sold 168,843 F-series pickup trucks in the first quarter alone.
Tesla wouldn't have sold even that many cars without the extraordinary help of government. In 2009 the company received a $465 million Obama loan guarantee, supplemented last year by a $10 million grant from the California Energy Commission.
That money has underwritten Tesla's engineering and manufacturing, but federal and state governments also subsidize the purchase of Tesla products. Any U.S. buyer of a Tesla car qualifies for a $7,500 federal tax credit, while states like Colorado throw in up to $6,000 more in state income-tax credits. Taxpayers pay first so Tesla can build the cars and again to help the wealthy buy them.
These subsidies are important enough to Tesla that its website features an "Incentives" section directing buyers where to look for their states' electric-vehicle benefits--rebates, free parking, exemptions from state sales tax, use of high-occupancy lanes, and the like. Buyers from states that offer no incentives get this Tesla message: "Want to help make EV [electric vehicle] incentives a reality in your area? Encourage your local or state representative by calling or sending them a letter."
Tesla's biggest windfall has been the cash payments it extracts from rival car makers (and their customers), via its sale of zero-emission credits. A number of states including California require that traditional car makers reach certain production quotas of zero-emission vehicles--or to purchase credits if they cannot. Tesla is a main supplier.
A Morgan Stanley report in April said Tesla made $40.5 million on credits in 2012, and that it could collect $250 million in 2013. Tesla acknowledged in a recent SEC filing that emissions credit sales hit $85 million in 2013's first quarter alone--15% of its revenue, and the only reason it made a profit.
Take away the credits and Tesla lost $53 million in the first quarter, or $10,000 per car sold. California's zero-emission credits provided $67.9 million to the company in the first quarter, and the combination of that state's credits and federal and local incentives can add up to $45,000 per Tesla sold, according to an analysis by the Los Angeles Times.
One irony is that rival car makers--even those making electric hybrids or gasoline subcompacts--don't get the same benefit from zero-emissions mandates. As environmentalist Bjorn Lomborg notes, manufacturing and charging electric cars over their life cycle can produce more carbon than small, gas-powered vehicles. Yet Tesla is cashing in because of the policy bias for fully-electric cars.
Another irony is that the main beneficiaries of this electric-car largesse belong to--well, the 1%. Tesla co-founder Elon Musk is already a successful entrepreneur, and his estimated net worth has soared past $4 billion thanks to the IPOs of Tesla and SolarCity.
Also realizing Tesla IPO windfalls are the elite of Silicon Valley venture capital: the Westly Group (whose principal, Steve Westly, is an Obama campaign bundler), Draper Fisher Jurvetson, and VantagePoint Venture Partners. Other paupers in the Tesla venture include or have included Daimler, Fidelity Investments, Google co-founders Sergey Brin and Larry Page, Hyatt heir Nick Pritzker, and former eBay president Jeff Skoll. The state-owned Abu Dhabi Water & Electricity Authority last year booked a $113 million profit selling its share of Tesla. You're welcome.
Tesla isn't oblivious to the politics of all this, and on Wednesday it said it had fully repaid its government loan. That's good, since Tesla's long-term prospects are far from certain. The major auto makers will soon have their own zero-emissions vehicles, which Mr. Musk says will end Tesla's credits boom by year end. Analysts are also warning that Tesla has yet to show it can sell its very pricey car to a mass market.
***
Tesla's investors claim this taxpayer support is worth it if it creates a new electric-car company, and for them it is. But such a success must still be measured against other taxpayer losses and misallocated capital.
And even if Tesla's cars do sell, the policy question is why billionaires in California couldn't have financed the business themselves. Why should middle-class taxpayers whose incomes are falling still pay to subsidize the purchase of cars that only the affluent can afford, and then partly as a gesture of their superior environmental virtue? When does the rest of America get its return on Tesla's profits?
Correction: On Sept. 7, 2011 the Department of Energy offered a loan guarantee to SolarCity, but the process was not completed. An earlier version of this editorial said the company had received the loan guarantee.
Subject: Automobile sales; Research & development--R & D; Electric vehicles; Automobile industry; Corporate profits; Emissions; Industrial policy
Location: California
Company / organization: Name: Fisker Automotive Inc; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: California Energy Commission; NAICS: 926130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: May 23, 2013
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1354489076
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1354489076?accoun tid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
The Wizard of Houston Street; Thomas Edison's rival Nikola Tesla was a visionary and dreamer in equal measure.
Author: Ball, Philip
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 May 2013: n/a.
ProQuest document link
Abstract:
The classic photograph of Tesla seated calmly reading a book in his Colorado laboratory while an electrical storm rages across the gigantic coils around him captures brilliantly the sense of a magus commanding wild forces. [...]it is his image that he commands here:
Full text: When Christopher Nolan cast David Bowie as the Serbian inventor Nikola Tesla in his 2006 movie, "The Prestige," he chose wisely. Despite Bowie's dodgy moustache (and dodgier accent), few other actors could have supplied the otherworldliness that the role demands: a combination of RadioShack nerd and space alien. Strikingly handsome, Tesla was a celebrity and socialite in the final decades of the 19th century before disappearing into bankruptcy and then legend.
At one time Thomas Edison's employee, Tesla (1856-1943) became his rival, vying for the crown of Electrical Wizard. Legends still cling to him--that he discovered how to tap cosmic energy, that his plans for death rays were hidden by the U.S. government. As W. Bernard Carlson, a historian of technology at the University of Virginia, points out in his biography, "Tesla," he has been credited with every innovation of the electronic age and dismissed as a madman. The classic photograph of Tesla seated calmly reading a book in his Colorado laboratory while an electrical storm rages across the gigantic coils around him captures brilliantly the sense of a magus commanding wild forces. In fact, it is his image that he commands here: The photo was a faked double exposure.
But if it's the legendary Tesla you seek, you'll be disappointed--Mr. Carlson does a good job of debunking the New Agers and conspiracy theorists. Instead you will have to negotiate rather opaque discourses on the merits of alternating-current (AC) versus direct-current (DC) power generation. This is both a strength and a weakness of the book.
Tesla was born in the province of Lika in what is now Croatia but was then a Serbian region on the outskirts of the Austro-Hungarian Empire. The son of an educated but austere priest, he was trying to make flying machines while still at school and was seemingly never destined, as his father hoped, for the priesthood himself. During a rather haphazard training as an engineer in Graz and Prague, Tesla developed a fascination for motors, dynamos and electromagnetism in general. While working in Budapest he was hired by Edison's branch in Paris and then brought to the Edison Machine Works in New York. "This is a damn good man," Edison is said to have remarked when they met in 1884, but Tesla quit soon after when he felt that his contribution to the company's arc-lighting system went unappreciated.
His breakthrough invention was a motor that ran off AC. It was simpler and without the sparking contacts of DC motors. He sold the patent to George Westinghouse, who collaborated with him to develop AC power--which was easier to transmit over long distances--in America. The construction of Westinghouse's AC hydroelectric power plant at Niagara Falls in 1895 was arguably Tesla's greatest and most enduring success. As Mr. Carlson explains: "Tesla's AC inventions were essential to making electricity a service that could be mass-produced and mass-distributed; his inventions set the stage for the ways in which we produce and consume electricity today."
Like Edison, Tesla was a showman who actively cultivated an impression of wizardry in an age when electromagnetic phenomena still smelled of magic--an association that probably contributed more to Tesla's status than Mr. Carlson credits. To demonstrate the safety of AC power, he staged public lectures in which he would pass 250,000 volts through his body, creating a glow of ionized air at his fingertips and the ends of his hairs. Despite being prone to depression and odd behavior, he was also, in his heyday, a socialite who could win over tycoons such as Westinghouse, John Jacob Astor and J.P. Morgan.
So Tesla was ingenious--but was he a genius? Like other great inventors of his age, such as Edison, Bell and Ford, he brimmed with imaginative, sometimes bizarre, plans, supported by obsessive determination and only a cursory understanding of the basic science. He hatched grand schemes that were visionary and unrealistic in equal measure. His desire to transfer electrical power wirelessly has become relevant again in the age of the laptop and cellphone. But dreamers are prone to myopia, and he missed opportunities. He believed that "wireless telegraphy" would have to transmit electromagnetic signals through the earth rather than the atmosphere, and so he lost out to Marconi, breaking both his spirit and his financial backing. He missed a chance to discover X-rays, overlooking those produced by his gas-discharge lighting tubes, and he found no takers for his remote-controlled vehicles.
Yet what dreams he had! As he promises to communicate with Martians by radio or to use electricity to convert atmospheric nitrogen into fertilizer (the chemical method Fritz Haber devised a decade later supports the world's current population), you have to admire his chutzpah. At his experimental station in Colorado Springs, he wirelessly lighted up distant electric bulbs planted in the desert soil and generated ball lightning in a laboratory that surely inspired the film director James Whale's electrified Frankenstein. He persuaded Morgan to finance another lab at Wardenclyffe on Long Island, complete with a 600-foot radio transmission tower--which never worked, turning their relationship sour and precipitating Tesla's slow decline into obscurity.
Mr. Carlson's account is thorough, but flawed by its lack of psychological insight. Tesla was evidently a strange and troubled man. "I . . . calculated the cubical contents of soup plates, coffee cups and pieces of food," he wrote in a memoir--"otherwise my meal was unenjoyable." When he reports that dropping little squares of paper into a dish of liquid made him "always sense a peculiar and awful taste in my mouth," Mr. Carlson doesn't wonder why he might be engaged in that activity in the first place. He seems to regard these peculiar habits as inconveniences, noting with unintentional deadpan that "they undoubtedly interfered with his relationships with other people." Mr. Carlson's view of inner worlds sounds at times almost Victorian: As a boy, he says, Tesla overcame recurrent nightmares "by developing his willpower."
Most perplexingly, Mr. Carlson does not examine Tesla's belief that "I was but an automaton devoid of free will in thought and action" except to cite it as motivating his interest in building radio-controlled robotic devices. By the time Mr. Carlson steels himself to talk about sex, we have already deduced that Tesla was sexually repressed and probably gay. Mr. Carlson touches on Tesla's possible homosexuality but is content to attribute his apparent celibacy to the asceticism of his Eastern Orthodox background and the solitary demands of inventive genius. The author's relief in getting back to a discussion of inductance coils is almost palpable.
This is a shame, because Mr. Carlson has some interesting things to say about technological innovation, such as the need to blend imagination and analytical rigor--to "think hard but dream boldly"--and the delicate relationship between inventors and investors. But the omissions are important for that very reason. While one shouldn't pathologize Tesla too much, his idiosyncrasies raise questions about the extent to which one can generalize from his approach to invention--or even how much of it, as reported by Tesla himself, can be taken at face value. Without a deeper insight into the man, it becomes hard to draw any lessons about the process of invention and innovation in history. For that, the mathematician Norbert Wiener's little treatise "Invention," written in 1954, is still hard to beat. In the meantime, this book provides a good survey of Tesla's technics, but the man remains an enigma.
Mr. Ball is the author of "Curiosity: How Science Became Interested in Everything."
Credit: By Philip Ball
Subject: Research & development--R & D; Age
Location: United States--US
People: Nolan, Christopher Westinghouse, George (1846-1914) Bowie, David
Company / organization: Name: RadioShack Corp; NAICS: 443112, 443120; Name: Machine Works; NAICS: 336612; Name: University of Virginia; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: May 24, 2013
Section: Life and Style
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1355121950
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1355121950?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla to Triple Area Covered by Fast Electric Car Chargers
Author: Ovide, Shira; Rusli, Evelyn M
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 May 2013: n/a.
ProQuest document link
Abstract: None available.
Full text: RANCHO PALOS VERDES, Calif.--Tesla Motors Inc. Chief Executive Elon Musk said the company plans to triple the area covered by the auto maker's ultrafast electric-car charging stations.
Mr. Musk, in an appearance at the D: All Things Digital technology conference, said Tesla plans on Thursday to announce details of the significant expansion of the charging network by the end of next month.
Tesla has a handful of its solar-powered charging stations along the East Coast and in California. Mr. Musk said the expanded network will eventually allow a drive from New York City to Los Angeles using only the fast-charging stations.
Credit: By Shira Ovide And Evelyn M. Rusli
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: May 30, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1356166174
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1356166174?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
First Comes an Electric Car. Next, a Trip to Mars. Tesla's Elon Musk lays out his vision for two vehicles for the future
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 June 2013: n/a.
ProQuest document link
Abstract:
For Elon Musk, the South African inventor and entrepreneur, it may not be a giant leap to go from founder of an electric-car company to space-rocket engineer. The goal is to improve rocket technology and spacecraft technology and keep improving it every year until ultimately we are able to send people to Mars and establish a self-sustaining base on Mars.
Full text: For Elon Musk, the South African inventor and entrepreneur, it may not be a giant leap to go from founder of an electric-car company to space-rocket engineer. He's had success with innovation before, as co-creator of the well-known Web-based payment system, PayPal.
He sat down with All Things Digital's Kara Swisher and Walt Mossberg to discuss recent developments at Tesla Motors and Space Exploration Technologies.
Coal Comfort
MR. MOSSBERG: Do you worry that a lot of electricity used by the cars is generated from coal?
MR. MUSK: There are two obvious rebuttals.
One, if you take the same source fuel and burn it at the power-plant level, you will get two to three times the efficiency than if you burned it in the car itself. At the power-plant level, you're not constrained by mass and volume, and you can take the waste heat and use it to run a steam turbine. The other factor is we have to find sustainable means of electricity production anyway, and the obvious mode for transport is electric.
MR. MOSSBERG: What does it cost, your most successful one?
MR. MUSK: Before tax credits, it's about $70,000. After tax credits, it's like $60,000.
MR. MOSSBERG: There's a federal tax credit for a pure electric car?
MR. MUSK: That's right, $7,500. But they're receiving less of a subsidy than gasoline cars. If you look at the subsidy of gasoline cars and if you're pricing the environmental damages, every time you buy a gasoline car there are huge subsidies occurring. And you can actually tell that these subsidies are higher than the subsidies for electric cars because people are not buying electric cars except ours.
MR. MOSSBERG: You also get federal and state subsidies, right?
MR. MUSK: Yes.
MR. MOSSBERG: When will you be at a point where even if you didn't have subsidies and credit sales you would be profitable?
MR. MUSK: We're anticipating being profitable, even better than slightly profitable, in the fourth quarter of this year. We're projecting 25% gross margins, absent of credits.
MR. MOSSBERG: But not absent the tax subsidies?
MR. MUSK: Right. There's a consumer tax credit, which is effectively something that improves the level of demand. But Tesla doesn't get the tax credit, the consumer does.
Space Exploration
MR. MOSSBERG: What is your ultimate goal for SpaceX?
MR. MUSK: The goal is to improve rocket technology and spacecraft technology and keep improving it every year until ultimately we are able to send people to Mars and establish a self-sustaining base on Mars.
MR. MOSSBERG: What got you into space?
MR. MUSK: The future of humanity, it's going to fundamentally bifurcate in two directions, or life as we know it. Either it's going to become multiplanetary, or it's going to be confined to one planet until some eventual extinction event.
MS. SWISHER: What's happening now with SpaceX?
MR. MUSK: The big breakthrough that's needed in rocketry is to achieve fully rapidly reusable rockets. If you think about any other mode of transport, like a plane, bike, car, anything, of course, they are reusable quickly.
MR. MOSSBERG: And the only one we have, the U.S. at least built, or anybody built, I think, was the shuttle.
MR. MUSK: Right. And it was only partly reusable. So in order to have a breakthrough, you have to have a fully reusable rocket. We're making progress in that direction. I'm hopeful that in the next couple of years we'll be able to achieve full and operable usability of the first stage, which is about three-quarters of the cost of the rocket. And then with a future design architecture achieve full reusability.
MS. SWISHER: Your rockets now are for doing payloads, and it's a business, correct?
MR. MUSK: SpaceX launches satellites for commercial customers and does space-station servicing for NASA. We run the primary contract to do space-station cargo to and from the station. We're the only craft capable of bringing significant cargo back from the space station.
Subject: Tax credits; Mars; Space exploration; Electric vehicles
Company / organization: Name: PayPal Inc; NAICS: 522320; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Jun 2, 2013
Section: Special
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1357400121
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1357400121?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Isn't Standing on Its Own Yet
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 June 2013: n/a.
ProQuest document link
Abstract:
[...]if Tesla's autos are must-haves for wealthy drivers with money to burn, why not let them burn just a little more and stop forcing taxpayers and moderate-income car buyers to subsidize the top 1% with individual tax credits, rebates and zero-emission corporate credits?
Full text: Todd Foley of the American Council On Renewable Energy (, June 5) ignores the gist of the Journal's editorial critique of Tesla Motors ( May 24) and encourages us all to celebrate Tesla's early repayment of its DOE loan. Mr. Foley fails to refute the inconvenient truth that Tesla's revenues and profits involved a healthy dose of income redistribution from federal and state taxpayers and from rival car makers and their customers. So those of us who pay taxes and buy non-Tesla vehicles provided a loan to Tesla and then, in effect, gave Tesla the money to repay us--with interest.
If Tesla and all of the other wonderful companies in the DOE loan program represent superb investment opportunities, why not let private investors enjoy the risks and rewards? And if Tesla's autos are must-haves for wealthy drivers with money to burn, why not let them burn just a little more and stop forcing taxpayers and moderate-income car buyers to subsidize the top 1% with individual tax credits, rebates and zero-emission corporate credits? When we stop lending money to cronies and then stop funneling them money to pay us back, we can all pop open the champagne bottles.
Steve Perry
Richmond, Va.
Subject: Income redistribution; Research & development--R & D
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Jun 12, 2013
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1366713190
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1366713190?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Isn't Standing on Its Own Yet
Author: Anonymous
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]13 June 2013: A.16.
ProQuest document link
Abstract:
[...]if Tesla's autos are must-haves for wealthy drivers with money to burn, why not let them burn just a little more and stop forcing taxpayers and moderate-income car buyers to subsidize the top 1% with individual tax credits, rebates and zero-emission corporate credits?
Full text: Todd Foley of the American Council On Renewable Energy (Letters, June 5) ignores the gist of the Journal's editorial critique of Tesla Motors ("The Other Government Motors," May 24) and encourages us all to celebrate Tesla's early repayment of its DOE loan. Mr. Foley fails to refute the inconvenient truth that Tesla's revenues and profits involved a healthy dose of income redistribution from federal and state taxpayers and from rival car makers and their customers. So those of us who pay taxes and buy non-Tesla vehicles provided a loan to Tesla and then, in effect, gave Tesla the money to repay us -- with interest.
If Tesla and all of the other wonderful companies in the DOE loan program represent superb investment opportunities, why not let private investors enjoy the risks and rewards? And if Tesla's autos are must-haves for wealthy drivers with money to burn, why not let them burn just a little more and stop forcing taxpayers and moderate-income car buyers to subsidize the top 1% with individual tax credits, rebates and zero-emission corporate credits? When we stop lending money to cronies and then stop funneling them money to pay us back, we can all pop open the champagne bottles.
Steve Perry
Richmond, Va.
Subject: Income redistribution; Research & development--R & D
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.16
Publication year: 2013
Publication date: Jun 13, 2013
Section: Letters to the Editor
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1366782168
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1366782168?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Clashes With Car Dealers; Electric-Vehicle Maker Wants to Sell Directly to Consumers; Critics Say Plan Violates Franchise Laws
Author: Ramsey, Mike; Bauerlein, Valerie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 June 2013: n/a.
ProQuest document link
Abstract:
The focus of the power struggle between Mr. Musk and auto dealers is a thicket of state franchise laws, many of which go back to the auto industry's earliest days when industry pioneer Henry Ford began turning to eager entrepreneurs to help sell his Model T. Dealers say laws passed over the decades to prevent car makers from selling directly to consumers are justified because without them auto makers could use their economic clout to sell vehicles for less than their independent franchisees. Dealers worry that existing car companies might try to create new subsidiaries to sell vehicles directly to consumers--a tactic General Motors Co. and Ford Motor Co. flirted with during the late 1990s before retreating in the face of a dealer backlash.
Full text: RALEIGH, N.C.--Elon Musk made a fortune disrupting the status quo in online shopping and renewable energy. Now he's up against his toughest challenge yet: Local car dealers.
Mr. Musk, the billionaire behind PayPal and now Tesla Motors Inc., wants to sell his $70,000 Tesla electric luxury vehicles directly to consumers, bypassing franchised automobile dealers. Dealers are flexing their considerable muscle in states including Texas and Virginia to stop him.
The latest battleground is North Carolina, where the Republican-controlled state Senate last month unanimously approved a measure that would block Tesla from selling online, its only sales outlet here. Tesla has staged whiz-bang test drives for legislators in front of the State House and hired one of the state's most influential lobbyists to stave off a similar vote in the House before the legislative session ends in early July.
The focus of the power struggle between Mr. Musk and auto dealers is a thicket of state franchise laws, many of which go back to the auto industry's earliest days when industry pioneer Henry Ford began turning to eager entrepreneurs to help sell his Model T.
Dealers say laws passed over the decades to prevent car makers from selling directly to consumers are justified because without them auto makers could use their economic clout to sell vehicles for less than their independent franchisees. Dealers say Tesla's direct sales violate those laws. These franchise laws have insulated car dealers from much of the e-commerce revolution that has hammered other sectors from books to electronics.
Franchise laws don't apply to Tesla, Mr. Musk has said, because the company has never had franchised dealers. This argument has been a winner for Tesla in court skirmishes with dealers in New York and Massachusetts. It has fared less well in state houses where lawmakers are more attuned to the concerns of important local employers and political donors.
If Tesla is successful in establishing its own retail network, it could open the door for other new companies, such as Chinese auto makers, to set up direct sales networks, legal experts say. Dealers worry that existing car companies might try to create new subsidiaries to sell vehicles directly to consumers--a tactic General Motors Co. and Ford Motor Co. flirted with during the late 1990s before retreating in the face of a dealer backlash.
Franchise laws differ by state. Most prohibit manufacturers from having both company and franchised stores. Some states, like North Carolina and Texas, require manufacturers use independent dealers. In some states, including North Carolina, dealers are pushing lawmakers to strengthen prohibitions against any form of direct-to-consumer selling by auto makers.
Dealers have "an essential monopoly on their business and they want to maintain it," said Diarmuid O'Connell, Tesla's chief of business development. Car dealers and alcohol distributors, he said, are the rare businesses still vigorously fighting disruption by the Internet.
Mr. O'Connell said the company has been looking at a federal legal challenge based on limits to interstate commerce and at pursuing new legislation in Congress. The company is committed to selling direct, he said. Tesla doesn't break out its spending on lobbying, but its first quarter overhead costs rose 53% to $47 million, in part because of hiring in sales and marketing.
Thomas Tallerico, a senior lawyer at Bodman PLC in Detroit who has represented auto makers and franchised dealers, said the chances of overturning franchise laws are dim.
"It is difficult to understand what the legal basis is by which Tesla could persuade a federal judge to strike down state laws designed to protect dealers, particularly when every state in the country has passed such laws and there is a federal law that protects dealers," he said.
Dealers' state house allies have given them tremendous sway. During their 2009 bankruptcies, GM and Chrysler terminated thousands of dealers using federal court's power to void contracts, but the pair were forced to go through binding arbitration and sometimes had to reinstate or buy out dealers because of state rules.
Mr. Musk, a founder of PayPal, co-founder of SolarCity Corp. and Space Exploration Technologies Corp., declined to comment for this article. At Tesla's annual meeting this month, Mr. Musk lashed out at dealers, calling their lobbying for laws to restrict Tesla sales a "perversion of democracy."
"I think customers are going to lead a revolt on this front," he said.
The clash in North Carolina illustrates the forces at play. Patrick Vaughn, a Charlotte investment banker, bought a pearl white Model S in January in a "simple and painless" online transaction. The car arrived with California temporary tags on a flatbed truck.
Mr. Vaughn said he doesn't buy that dealers, which are behind a proposal to block online car sales in the state, are trying to protect consumers. "They are trying to protect their turf--like any company would."
Thom Tillis, North Carolina's House speaker, said language that bars Internet car sales is unlikely to pass in the House.
David Wescott, chairman of the National Auto Dealers Association who has a Buick-GMC dealership in Burlington, N.C., said Tesla's effort to sell direct to consumers was important to all dealers and something the national association was watching.
"The system has worked for a long time," he said. "We only want Tesla to play by the same rules," Mr. Wescott added.
Even if Tesla wins in North Carolina, it is still smarting from losing an effort last month to amend Texas law to allow the company to take orders at company-owned stores. Tesla has two retail showrooms, or "galleries," in the state, but buyers have to order the cars online from California. Mr. Musk made a push in Austin, trying to rally support, but the bill died without action and can't be reintroduced before 2015.
Bill Wolters, who leads the Texas Automobile Dealers Association and helped to defeat the Tesla-led proposal, said he is worried that GM or Ford might want to offer direct sales as well, cutting perhaps 15% out of the dealer business and putting thousands of business owners under.
Mr. Musk told shareholders he doesn't want to sell cars through established dealers because he doubts they'll advocate for electric vehicles as vigorously as Tesla would.
Many more battles remain. Tesla defeated a bill in Minnesota that would have blocked sales. But in Virginia, the state Department of Motor Vehicles has so far refused to issue Tesla a license to operate a company store.
Write to Mike Ramsey at and Valerie Bauerlein at
Credit: By Mike Ramsey and Valerie Bauerlein
Subject: Automobile dealers; Automobile sales; Franchises; Interstate commerce
Location: California Texas North Carolina
Company / organization: Name: PayPal Inc; NAICS: 522320; Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Jun 17, 2013
Section: Small Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1368261977
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1368261977?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Clashes With Car Dealers --- Electric-Vehicle Maker Wants to Sell Directly to Consumers; Critics Say Plan Violates Franchise Laws
Author: Ramsey, Mike; Bauerlein, Valerie
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 June 2013: B.1.
ProQuest document link
Abstract:
The focus of the power struggle between Mr. Musk and auto dealers is a thicket of state franchise laws, many of which go back to the auto industry's earliest days when industry pioneer Henry Ford began turning to eager entrepreneurs to help sell his Model T. Dealers say laws passed over the decades to prevent car makers from selling directly to consumers are justified because without them auto makers could use their economic clout to sell vehicles for less than their independent franchisees.
Full text: Corrections & Amplifications
The last name of David Westcott, chairman of the National Automobile Dealers Association, was misspelled as Wescott, and the group's name was incorrectly given as the National Auto Dealers Association, in a Marketplace article on Tuesday about Tesla Motors Inc.'s battle to sell its cars directly to consumers.
(WSJ June 19, 2013)
RALEIGH, N.C. -- Elon Musk made a fortune disrupting the status quo in online shopping and renewable energy. Now he's up against his toughest challenge yet: Local car dealers.
Mr. Musk, the billionaire behind PayPal and now Tesla Motors Inc., wants to sell his $70,000 Tesla electric luxury vehicles directly to consumers, bypassing franchised automobile dealers. Dealers are flexing their considerable muscle in states including Texas and Virginia to stop him.
The latest battleground is North Carolina, where the Republican-controlled state Senate last month unanimously approved a measure that would block Tesla from selling online, its only sales outlet here. Tesla has staged whiz-bang test drives for legislators in front of the State House and hired one of the state's most influential lobbyists to stave off a similar vote in the House before the legislative session ends in early July.
The focus of the power struggle between Mr. Musk and auto dealers is a thicket of state franchise laws, many of which go back to the auto industry's earliest days when industry pioneer Henry Ford began turning to eager entrepreneurs to help sell his Model T.
Dealers say laws passed over the decades to prevent car makers from selling directly to consumers are justified because without them auto makers could use their economic clout to sell vehicles for less than their independent franchisees. Dealers say Tesla's direct sales violate those laws. These franchise laws have insulated car dealers from much of the e-commerce revolution that has hammered other sectors from books to electronics.
Franchise laws don't apply to Tesla, Mr. Musk has said, because the company has never had franchised dealers. This argument has been a winner for Tesla in court skirmishes with dealers in New York and Massachusetts. It has fared less well in state houses where lawmakers are more attuned to the concerns of important local employers and political donors.
If Tesla is successful in establishing its own retail network, it could open the door for other new companies, such as Chinese auto makers, to set up direct sales networks, legal experts say. Dealers worry that existing car companies might try to create new subsidiaries to sell vehicles directly to consumers -- a tactic General Motors Co. and Ford Motor Co. flirted with during the late 1990s before retreating in the face of a dealer backlash.
Franchise laws differ by state. Most prohibit manufacturers from having both company and franchised stores. Some states, like North Carolina and Texas, require manufacturers to use independent dealers. In some states, including North Carolina, dealers are pushing lawmakers to strengthen prohibitions against any form of direct-to-consumer selling by auto makers.
Dealers have "an essential monopoly on their business and they want to maintain it," said Diarmuid O'Connell, Tesla's chief of business development. Car dealers and alcohol distributors, he said, are the rare businesses still vigorously fighting disruption by the Internet.
Mr. O'Connell said the company has been looking at a federal legal challenge based on limits to interstate commerce and at pursuing new legislation in Congress. The company is committed to selling direct, he said. Tesla doesn't break out its spending on lobbying, but its first quarter overhead costs rose 53% to $47 million, in part because of hiring in sales and marketing.
Thomas Tallerico, a senior lawyer at Bodman PLC in Detroit who has represented auto makers and franchised dealers, said the chances of overturning franchise laws are dim.
"It is difficult to understand what the legal basis is by which Tesla could persuade a federal judge to strike down state laws designed to protect dealers, particularly when every state in the country has passed such laws and there is a federal law that protects dealers," he said.
Dealers' state house allies have given them tremendous sway. During their 2009 bankruptcies, GM and Chrysler terminated thousands of dealers using federal court's power to void contracts, but the pair were forced to go through binding arbitration and sometimes had to reinstate or buy out dealers because of state rules.
Mr. Musk, a founder of PayPal, co-founder of SolarCity Corp. and Space Exploration Technologies Corp., declined to comment for this article. At Tesla's annual meeting this month, Mr. Musk lashed out at dealers, calling their lobbying for laws to restrict Tesla sales a "perversion of democracy."
"I think customers are going to lead a revolt on this front," he said.
The clash in North Carolina illustrates the forces at play. Patrick Vaughn, a Charlotte investment banker, bought a Model S in January in a "simple and painless" online transaction. The car arrived with California temporary tags on a flatbed truck.
Mr. Vaughn said he doesn't buy that dealers, which are behind a proposal to block online car sales in the state, are trying to protect consumers. "They are trying to protect their turf -- like any company would."
Thom Tillis, North Carolina's House speaker, said language that bars Internet car sales is unlikely to pass in the House.
David Wescott, chairman of the National Auto Dealers Association who has a Buick-GMC dealership in Burlington, N.C., said Tesla's effort to sell direct to consumers was something the national association was watching.
"The system has worked for a long time," he said. "We only want Tesla to play by the same rules," Mr. Wescott added.
Even if Tesla wins in North Carolina, it is still smarting from losing an effort last month to amend Texas law to allow the company to take orders at company-owned stores. Tesla has two retail showrooms, or "galleries," in the state, but buyers have to order the cars online from California. Mr. Musk made a push in Austin, trying to rally support, but the bill died without action and can't be reintroduced before 2015.
Bill Wolters, who leads the Texas Automobile Dealers Association and helped to defeat the Tesla-led proposal, said he is worried that GM or Ford might want to offer direct sales as well, cutting perhaps 15% out of the dealer business and putting thousands of business owners under.
Mr. Musk told shareholders he doesn't want to sell cars through established dealers because he doubts they'll advocate for electric vehicles as vigorously as Tesla would.
Many more battles remain. Tesla defeated a bill in Minnesota that would have blocked sales. But in Virginia, the state Department of Motor Vehicles has so far refused to issue Tesla a license to operate a company store.
Credit: By Mike Ramsey and Valerie Bauerlein
Subject: Automobile dealers; Automobile sales; Franchises; Interstate commerce
Location: California Texas North Carolina
People: Musk, Elon
Company / organization: Name: PayPal Inc; NAICS: 522320; Name: Tesla Motors Inc; NAICS: 336999; Name: National Automobile Dealers Association; NAICS: 441110
Classification: 4330: Litigation; 7300: Sales & selling; 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2013
Publication date: Jun 18, 2013
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1368562161
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1368562161?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Clashes With Car Dealers; Electric-Vehicle Maker Wants to Sell Directly to Consumers; Critics Say Plan Violates Franchise Laws
Author: Ramsey, Mike; Bauerlein, Valerie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 June 2013: n/a.
ProQuest document link
Abstract:
The focus of the power struggle between Mr. Musk and auto dealers is a thicket of state franchise laws, many of which go back to the auto industry's earliest days when industry pioneer Henry Ford began turning to eager entrepreneurs to help sell his Model T. Dealers say laws passed over the decades to prevent car makers from selling directly to consumers are justified because without them auto makers could use their economic clout to sell vehicles for less than their independent franchisees. Dealers worry that existing car companies might try to create new subsidiaries to sell vehicles directly to consumers--a tactic General Motors Co. and Ford Motor Co. flirted with during the late 1990s before retreating in the face of a dealer backlash.
Full text: RALEIGH, N.C.--Elon Musk made a fortune disrupting the status quo in online shopping and renewable energy. Now he's up against his toughest challenge yet: local car dealers.
Mr. Musk, the billionaire behind PayPal and now Tesla Motors Inc., wants to sell his $70,000 Tesla electric luxury vehicles directly to consumers, bypassing franchised automobile dealers. Dealers are flexing their considerable muscle in states including Texas and Virginia to stop him.
The latest battleground is North Carolina, where the Republican-controlled state Senate last month unanimously approved a measure that would block Tesla from selling online, its only sales outlet here. Tesla has staged whiz-bang test drives for legislators in front of the State House and hired one of the state's most influential lobbyists to stave off a similar vote in the House before the legislative session ends in early July.
The focus of the power struggle between Mr. Musk and auto dealers is a thicket of state franchise laws, many of which go back to the auto industry's earliest days when industry pioneer Henry Ford began turning to eager entrepreneurs to help sell his Model T.
Dealers say laws passed over the decades to prevent car makers from selling directly to consumers are justified because without them auto makers could use their economic clout to sell vehicles for less than their independent franchisees. Dealers say Tesla's direct sales violate those laws. These franchise laws have insulated car dealers from much of the e-commerce revolution that has hammered other sectors from books to electronics.
Franchise laws don't apply to Tesla, Mr. Musk has said, because the company has never had franchised dealers. This argument has been a winner for Tesla in court skirmishes with dealers in New York and Massachusetts. It has fared less well in state houses where lawmakers are more attuned to the concerns of important local employers and political donors.
If Tesla is successful in establishing its own retail network, it could open the door for other new companies, such as Chinese auto makers, to set up direct sales networks, legal experts say. Dealers worry that existing car companies might try to create new subsidiaries to sell vehicles directly to consumers--a tactic General Motors Co. and Ford Motor Co. flirted with during the late 1990s before retreating in the face of a dealer backlash.
Franchise laws differ by state. Most prohibit manufacturers from having both company and franchised stores. Some states, like North Carolina and Texas, require manufacturers use independent dealers. In some states, including North Carolina, dealers are pushing lawmakers to strengthen prohibitions against any form of direct-to-consumer selling by auto makers.
Dealers have "an essential monopoly on their business and they want to maintain it," said Diarmuid O'Connell, Tesla's chief of business development. Car dealers and alcohol distributors, he said, are the rare businesses still vigorously fighting disruption by the Internet.
Mr. O'Connell said the company has been looking at a federal legal challenge based on limits to interstate commerce and at pursuing new legislation in Congress. The company is committed to selling direct, he said. Tesla doesn't break out its spending on lobbying, but its first quarter overhead costs rose 53% to $47 million, in part because of hiring in sales and marketing.
Thomas Tallerico, a senior lawyer at Bodman PLC in Detroit who has represented auto makers and franchised dealers, said the chances of overturning franchise laws are dim.
"It is difficult to understand what the legal basis is by which Tesla could persuade a federal judge to strike down state laws designed to protect dealers, particularly when every state in the country has passed such laws and there is a federal law that protects dealers," he said.
Dealers' state house allies have given them tremendous sway. During their 2009 bankruptcies, GM and Chrysler terminated thousands of dealers using federal court's power to void contracts, but the pair were forced to go through binding arbitration and sometimes had to reinstate or buy out dealers because of state rules.
Mr. Musk, a founder of PayPal, co-founder of SolarCity Corp. and Space Exploration Technologies Corp., declined to comment for this article. At Tesla's annual meeting this month, Mr. Musk lashed out at dealers, calling their lobbying for laws to restrict Tesla sales a "perversion of democracy."
"I think customers are going to lead a revolt on this front," he said.
The clash in North Carolina illustrates the forces at play. Patrick Vaughn, a Charlotte investment banker, bought a pearl white Model S in January in a "simple and painless" online transaction. The car arrived with California temporary tags on a flatbed truck.
Mr. Vaughn said he doesn't buy that dealers, which are behind a proposal to block online car sales in the state, are trying to protect consumers. "They are trying to protect their turf--like any company would."
Thom Tillis, North Carolina's House speaker, said language that bars Internet car sales is unlikely to pass in the House.
David Westcott, chairman of the National Automobile Dealers Association who has a Buick-GMC dealership in Burlington, N.C., said Tesla's effort to sell direct to consumers was important to all dealers and something the national association was watching.
"The system has worked for a long time," he said. "We only want Tesla to play by the same rules," Mr. Westcott added.
Even if Tesla wins in North Carolina, it is still smarting from losing an effort last month to amend Texas law to allow the company to take orders at company-owned stores. Tesla has two retail showrooms, or "galleries," in the state, but buyers have to order the cars online from California. Mr. Musk made a push in Austin, trying to rally support, but the bill died without action and can't be reintroduced before 2015.
Bill Wolters, who leads the Texas Automobile Dealers Association and helped to defeat the Tesla-led proposal, said he is worried that GM or Ford might want to offer direct sales as well, cutting perhaps 15% out of the dealer business and putting thousands of business owners under.
Mr. Musk told shareholders he doesn't want to sell cars through established dealers because he doubts they'll advocate for electric vehicles as vigorously as Tesla would.
Many more battles remain. Tesla defeated a bill in Minnesota that would have blocked sales. But in Virginia, the state Department of Motor Vehicles has so far refused to issue Tesla a license to operate a company store.
Corrections & Amplifications David Westcott is chairman of the National Automobile Dealers Association. An earlier version of this article misspelled his surname as Wescott and the group's name was incorrectly given as the National Auto Dealers Association.
Write to Mike Ramsey at and Valerie Bauerlein at
Credit: By Mike Ramsey and Valerie Bauerlein
Subject: Automobile dealers; Automobile sales; Franchises; Interstate commerce
Location: California Texas North Carolina
Company / organization: Name: PayPal Inc; NAICS: 522320; Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Jun 18, 2013
Section: Small Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1368663215
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1368663215?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Recall Cites Faulty Latch
Author: White, Joseph B
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 June 2013: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Motors Inc. is recalling about 260 of its Model S electric sedans to fix a rear-seat latch that could malfunction in a crash.
The Silicon Valley car maker said Wednesday that it acted after discovering the potential problem in its own quality tests, and hasn't received customer complaints. Federal regulators weren't involved, the company said.
A company spokeswoman said the recall affects about 20% of the 1,300 electric luxury vehicles built between May 10 and June 8.
Tesla said it will pick up the cars involved, reinforce the seat-latch assemblies, and return them to customers.
Write to Joseph B. White at
Credit: By Joseph B. White
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Jun 19, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1369360674
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1369360674?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
How Tesla Pulled Ahead of the Electric-Car Pack; Its luxury niche helped. But it may need to move down-market to win.
Author: Levi, Michael
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 June 2013: n/a.
ProQuest document link
Abstract:
First came an announcement that the California-based maker of electric cars had, in the first quarter of 2013, turned a profit for the first time.
Full text: Tesla Motors has had a very good year. First came an announcement that the California-based maker of electric cars had, in the first quarter of 2013, turned a profit for the first time. Then came news that the Tesla Model S sedan had earned Consumer Reports' highest rating. With a base price of $62,400 (after a $7,500 federal tax credit) the Model S even outsold similarly priced luxury BMW and Mercedes models in the first quarter.
Tesla has come on so strong that auto dealerships across the country, threatened by the electric-car company's model of selling directly to customers, have mounted a legal and political campaign to force Tesla to change course. The company's market capitalization is now more than $11 billion, nearly triple where it stood two months ago, and roughly a quarter of General Motors' $44.8 billion market cap.
Yet despite all the excitement, Tesla is not yet in an open lane to success. Tesla has been able to do well so far in substantial part because it is a small and focused company. It isn't saddled with outsize legacy costs like the Big Three auto makers are. Another reason for Tesla's success is founder and CEO Elon Musk's skill at partnering with other companies and developing new technology for them. Toyota and Daimler AG, for instance, teamed up with Tesla to help develop batteries for their electric cars, and both invested in Tesla.
For a company of Tesla's size (under 3,000 employees), delivery of roughly 4,750 Model S sedans in the first quarter of this year was an impressive feat, the sort of accomplishment that attracts the resources and management attention that are necessary for a new product to thrive. It would be much tougher for a fledgling electric vehicle with that level of sales to attract the same attention at an established auto maker, like Ford or Honda, that sells millions of vehicles every year.
But Tesla's small size also presents big challenges. A major safety incident or large-scale recall could present formidable challenges, both financially and logistically.
On Wednesday, Tesla announced a recall of more than 1,200 Model S sedans manufactured between May 10 and June 8 of this year because "the attachment strength of the mounting bracket for the left hand latch of the second row seat could be weaker than intended." Ironically, this relatively minor recall, not involving a safety issue, could give Mr. Musk and his company just the sort of experience they'll need should a larger recall be required in the years to come.
Tesla and other electric or hybrid auto makers have clearly benefited from state and federal subsidies and regulations aimed at promoting alternatives to oil. But the company's success so far has ultimately hinged on Tesla's smart strategy of selling to an upmarket niche.
Instead of marketing electric cars as only eco-friendly and a way to save money on gas, Tesla has managed to position the Model S as a superior luxury vehicle, with better acceleration, a quieter interior and a slicker appearance than the cars it competes with.
Tesla ultimately will need to move beyond the luxury-car market if the company is to come anywhere close to justifying the nearly $11 billion value that investors have assigned it. Unless Tesla follows a Porsche-like strategy of moving dramatically upmarket--a direction it shows no intention of pursuing--that will mean radically reducing costs and moving down-market.
Make no mistake: Tesla's recent success is encouraging. But the mainstream electric car is still far from a reality.
Mr. Levi, a senior fellow at the Council on Foreign Relations, is the author of "The Power Surge: Energy, Opportunity, and the Battle for America's Future," recently published by Oxford University Press.
Credit: By Michael Levi
Subject: Electric vehicles; Automobile industry; Success
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Consumer Reports; NAICS: 511120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Jun 20, 2013
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1369965001
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1369965001?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Investors Look Far Into the Future to Price Its Shares
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Aug 2013: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. Chief Executive Elon Musk doesn't run his Silicon Valley electric car maker by traditional auto industry rules, and investors are so far rewarding him by putting a value on the company that defies easy comparisons.
Full text: Tesla Motors Inc. Chief Executive Elon Musk doesn't run his Silicon Valley electric car maker by traditional auto industry rules, and investors are so far rewarding him by putting a value on the company that defies easy comparisons.
Tesla is scheduled to report second quarter results on Wednesday, and most analysts are forecasting a 17-cent-a-share loss. In an industry where strategy is driven by the quest for economies of scale, Tesla is tiny. It delivered just 1,400 Model S electric sedans in July, according to researcher Autodata Corp., or about 1% of Ford Motor Co.'s U.S. sales for the month.
Yet Tesla's share price has more than quadrupled in the past year, to $142.15 on Tuesday and giving it a market value of about $17.15 billion, a quarter of Ford's, and about 70% more than Fiat SpA--majority owner of Chrysler Group LLC.
Despite its small size, the Palo Alto, Calif., company has become among the auto industry's most closely followed. General Motors Co. CEO Dan Akerson recently ordered a team of GM employees to study Tesla and the ways that it could challenge the established auto industry business model.
Even Wall Street analysts who are enthusiastic about Tesla's prospects have put target prices on the company's shares that are much lower than their current market price.
A Tesla spokesman wouldn't comment on the stock price on Tuesday ahead of disclosing June quarter results on Wednesday. But Mr. Musk and other company officials have said in the past that they foresee a Tesla that is building 400,000 or 500,000 cars a year, and can achieve a market capitalization of as much as $43 billion by 2022. That is the level at which Mr. Musk can collect a chunk of stock under a multi-step compensation plan adopted by Tesla's board last year.
Most car companies are judged on the results they can deliver in the near term. Tesla investors are buying on results that probably won't exist until sometime in the next decade. And even that is only if it can deliver flawless manufacturing execution, continued annual growth and crack through the consumer concerns about driving range and upfront costs that have restrained demand for all-electric vehicles so far.
Analysts are expecting the company to lose 68 cents a share this year and earn 50 cents a share next year, according to Zacks Investment Research. By that 2014 projection, its forward price/earnings ratio is 289, compared with Ford's PE of just under 10 and Toyota Motor Corp.'s P/E of less than 1, both based on 2014 earnings projections, according to Zacks.
Tesla's P/E ratio is more akin to Internet stocks than car makers. Supporters say that is because the company's electric vehicle sales strategy is disruptive and the auto maker possesses groundbreaking technologies.
Deutsche Bank recently raised its target price for the company's shares to $160. The bank estimates that Tesla will be able to achieve operating profit margins of 20%--or about twice that of BMW AG in its most recent quarter--as it ramps up sales and spreads costs over a larger number of vehicles.
"We expect [Tesla] to reach at least 200,000 units by near the end of the decade, which implies about 5% of what we calculate as the addressable market of comparable vehicles in terms of capability and price," the bank said in a note to investors last month.
Tesla sold 8,931 vehicles this year through June, according to Autodata. In contrast, Porsche delivered 81,565 of its big ticket and high margin vehicles globally during the same period.
Mr. Musk has said he believes Tesla can achieve 25% gross margins by the end of this year, meaning that Tesla's direct costs of building cars will be just three-quarters of the revenue it collects from sales. In the first quarter, Tesla's gross margin was 17% of sales.
Wall Street analysts assume that Tesla will sell around 100,000 of the company's "Gen 3" models--electric sedans that are expected to start at about $35,000 when available in late 2016. Investors are counting on Tesla being able to deliver a car that competes against luxury sports cars such as the BMW 3 Series and Audi A4--and not similarly-priced electric cars.
The hurdles are many. Other manufacturers now offering electric cars for under $40,000 have so far failed to generate much volume. The Nissan Leaf, which starts at about $28,800, is on a pace to sell fewer than 50,000 cars this year on a global basis.
Established luxury brands also are planning to challenge Tesla with plug-in models of their own, such as the BMW i3 and a Cadillac ELR plug-in hybrid coming from GM.
Many analysts say the shares currently are overpriced based on their sales and profit projections. Adam Jonas, a Morgan Stanley analyst, says Tesla's shares should be trading at about $109. His estimate assumes Tesla continues to expand its business 15 years into the future to get to his stock value--which is about 23% less than its current price.
Mr. Jonas assumes Tesla eventually can sell more than 200,000 vehicles a year at an average price of $50,000, with the majority of the sales coming from the company's Gen 3 models. This year, Tesla is expected to deliver about 20,000 Model S vehicles.
"We argue that Tesla cannot be valued on traditional near-term multiple metrics like traditional auto companies," Mr. Jonas said.
Goldman Sachs analyst Patrick Archambault has one of the lower stock price estimates at $84 a share. He estimated Tesla will be making about 150,000 vehicles a year and earning about $1.1 billion, or $8.59 a share, in 2018.
Barclays senior analyst Brian Johnson is pegging Tesla at $90 a share. He thinks that Tesla, at a minimum, can sell about 50,000 Model S and Model X vehicles a year around the globe, making it is successful "niche luxury car maker." But that should only get Tesla to about $60 a share in value.
To be worth $90 a share, Tesla has to make a credible entry-level luxury car that he thinks will be priced at between $42,000 and $45,000. "They are going to have to do in five years what it took Audi decades to do--break into the volume entry-level luxury market."
Today's stock price, he said, reflects investors who believe Mr. Musk "is the next Henry Ford."
Write to Mike Ramsey at
Credit: By Mike Ramsey
Subject: Automobile industry; Financial performance; Earnings; Vehicles; Investments; Automobile sales; Compensation plans; Internet stocks
Company / organization: Name: Zacks Investment Research; NAICS: 523930; Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110; Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Tesla Motors Inc; NAICS: 336999
Product name: Audi A4
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Aug 6, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1418020119
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1418020119?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla's Stock Is Outrunning Its Superfast Electric Car
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 Aug 2013: B.1.
ProQuest document link
Abstract:
Tesla Motors Inc. Chief Executive Elon Musk doesn't run his Silicon Valley electric-car maker by traditional auto industry rules, and investors are so far rewarding him by putting a value on the company that defies easy comparisons.
Full text: Tesla Motors Inc. Chief Executive Elon Musk doesn't run his Silicon Valley electric-car maker by traditional auto industry rules, and investors are so far rewarding him by putting a value on the company that defies easy comparisons.
Tesla will report second-quarter results Wednesday, and most analysts are forecasting a 17-cent-a-share loss. In an industry where strategy is driven by the quest for economies of scale, Tesla is tiny. It delivered just 1,400 Model S electric sedans in July, according to researcher Autodata Corp., or about 1% of Ford Motor Co.'s U.S. sales for the month.
Yet Tesla's share price has more than quadrupled in the past year, to $142.15 on Tuesday. That gives it a market value of about $17.15 billion, a quarter of Ford's, and about 70% more than Fiat SpA -- majority owner of Chrysler Group LLC.
Despite its small size, the Palo Alto, Calif., company has become among the auto industry's most closely followed. General Motors Co. CEO Dan Akerson recently ordered a team of GM employees to study Tesla and the ways that it could challenge the established business model.
Even Wall Street analysts who are enthusiastic about Tesla's prospects have put target prices on the company's shares that are much lower than their current market price.
A Tesla spokesman wouldn't comment on the stock price on Tuesday ahead of disclosing June quarter results. But Mr. Musk and other company officials have said in the past that they foresee a Tesla that is building 400,000 or 500,000 cars a year, and can achieve a market capitalization of as much as $43 billion by 2022. That is the level at which Mr. Musk can collect a chunk of stock under a multi-step compensation plan adopted by Tesla's board last year.
Most car companies are judged on the results they can deliver in the near term. Tesla investors are buying on results that probably won't exist until sometime in the next decade. And even that is only if it can deliver flawless manufacturing execution, continued annual growth and crack through the consumer concerns about driving range and upfront costs that have restrained demand for all-electric vehicles so far.
Analysts are expecting the company to lose 68 cents a share this year and earn 50 cents a share next year, according to Zacks Investment Research. By that 2014 projection, its forward price/earnings ratio is 289, compared with Ford's P/E of just under 10 and Toyota Motor Corp.'s P/E of less than 1, both based on 2014 earnings projections, according to Zacks.
Tesla's P/E ratio is more akin to Internet stocks than car makers. Supporters say that is because the company's electric-vehicle sales strategy is disruptive and the auto maker possesses groundbreaking technologies.
Deutsche Bank recently raised its target price for the company's shares to $160. The bank estimates Tesla will be able to achieve operating profit margins of 20% -- or about twice that of BMW AG in its most recent quarter -- as it ramps up sales and spreads costs over a larger number of vehicles.
"We expect [Tesla] to reach at least 200,000 units by near the end of the decade, which implies about 5% of what we calculate as the addressable market of comparable vehicles in terms of capability and price," the bank said in a note to investors last month.
Tesla sold 8,931 vehicles this year through June, according to Autodata. In contrast, Porsche delivered 81,565 of its big ticket and high margin vehicles globally during the same period.
Wall Street analysts assume that Tesla will sell around 100,000 of the company's "Gen 3" models -- electric sedans that are expected to start at about $35,000 when available in late 2016. Investors are counting on Tesla being able to deliver a car that competes against luxury sports cars such as the BMW 3 Series and Audi A4 -- and not similarly-priced electric cars.
Established luxury brands also are planning to challenge Tesla with plug-in models of their own, such as the BMW i3 and a Cadillac ELR plug-in hybrid.
Many analysts say the shares currently are overpriced based on their sales and profit projections. Adam Jonas of Morgan Stanley says Tesla's shares should be trading at about $109.
"We argue that Tesla cannot be valued on traditional near-term multiple metrics like traditional auto companies," Mr. Jonas said.
Barclays senior analyst Brian Johnson is pegging Tesla at $90 a share. He thinks that Tesla, at a minimum, can sell about 50,000 Model S and Model X vehicles a year around the globe, making it is successful "niche luxury car maker." But that should only get Tesla to about $60 a share in value.
To be worth $90 a share, Tesla has to make a credible entry-level luxury car that he thinks will be priced at between $42,000 and $45,000. "They are going to have to do in five years what it took Audi decades to do -- break into the volume entry-level luxury market."
Today's stock price, he said, reflects investors who believe Mr. Musk "is the next Henry Ford."
Credit: By Mike Ramsey
Subject: Automobile industry; Financial performance; Corporate profits; Electric vehicles; Compensation plans; Stock prices; Company reports; Automobile sales
Location: United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 3400: Investment analysis & personal finance; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2013
Publication date: Aug 7, 2013
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1418098714
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1418098714?accountid=7117
Copyright: (c) 2013 Dow Jones & Comp any, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Results Beat Projections, Share Jump
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Aug 2013: n/a.
ProQuest document link
Abstract:
Luxury electric-car maker Tesla Motors Inc. reported a net loss for the second quarter, but exceeded Wall Street expectations for production and gross margins, sending its shares higher in after-hours trading.
Full text: Luxury electric-car maker Tesla Motors Inc. reported a net loss for the second quarter, but exceeded Wall Street expectations for production and gross margins, sending its shares higher in after-hours trading.
The Palo Alto, Calif., company posted a $30.5 million loss, or 26 cents a share, compared with a year-earlier loss of $105.6 million, or $1 a share. Revenue soared to $405.1 million from $26.7 million a year ago when its $80,000 and up Model S plug-in was just beginning deliveries.
Tesla Chief Executive Elon Musk in a letter to shareholders said that Tesla had a profit of $7 million, or 5 cents a share, when excluding costs associated with stock compensation, early repayment of a federal loan and costs associated with a lease program. Such measures don't conform to generally accepted accounting principles, or GAAP.
On a GAAP basis, consistent with the way that rival auto makers report results, Tesla said it lost $11.79 million from operations, before interest and taxes, during the just-ended quarter, and burned $78.7 million in cash.
Revenue declined by more than $150 million from the first quarter, mainly because the company deferred some revenue associated with cars delivered under a new financing program designed to mimic a lease.
The purchase/lease financing accounted for 30% of the auto maker's sales in the quarter ended June 30. In addition to the lease change, Tesla received $51 million from selling pollution credits to other auto makers, down from $68 million in the prior quarter.
Tesla said it had cash on hand of $746 million, up from $214 million at the end of the first quarter, reflecting a sale of shares during the quarter.
Model S deliveries increased by 5% from the first quarter to 5,150 cars. Tesla said it began delivering cars to Europe this year and forecast it would produce about 5,000 vehicles in the current quarter. It delivered 89 cars in the year-earlier quarter.
Mr. Musk said during a conference call that its current backlog of Model S orders is averaging about 20,000 in North America on an annual basis. He said based on current reservations abroad that global demand for the model should be about 40,000 a year.
He said the company is working through production constraints that have been caused primarily by suppliers that haven't scaled up enough to meet demand. Mr. Musk said suppliers were following guidance from forecasting firm IHS Automotive that Tesla would sell only 3,000 Model S vehicles in its entire lifetime and didn't build enough capacity to meet current demand.
Lower-cost batteries should enable Tesla to make a profit on a planned lower-cost electric sedan in late 2016, he said. "I have high confidence that we can create a compelling car for around $35,000--compelling being around 200 miles range."
A concern is capacity to produce enough battery cells for the vehicle, he said. "It's really quite a large number to be supplying a factory that is producing say, 400,000 to 500,000 cars."
Shares jumped $17.97, or 13.4%, after finishing down 5.5% at $134.23 in 4 p.m. trading on the Nasdaq Stock Market.
Mr. Musk affirmed in his letter to shareholders that Tesla can deliver about 21,000 cars this year and said the company is on track to achieve 25% gross margins for the year, using a non-GAAP calculation. Mr. Musk said during a conference call Tuesday that Tesla's automotive gross margin, revenue received from selling cars minus the direct costs of building them, was 13% in the latest quarter. That figure doesn't include money received from selling pollution credits.
In his shareholder letter, Mr. Musk cited a different non-GAAP gross margin of 22%. That figure included revenue from sales of pollution credits.
Mr. Musk affirmed a forecast for Tesla's non-GAAP gross margin to hit 25% by the fourth quarter, and added, "we are cautiously optimistic that a number above that level may be achievable in future quarters."
Investors are closely following gross margin as a signpost for how well the young company is managing itself. That measure doesn't include the costs of developing new vehicles, marketing or retail and distribution costs.
The letter also said that demand was strong enough that the company bought 31 acres next to its Fremont, Calif., factory for potential expansion. The letter said demand remains strong for the Model S and grew at twice the rate outside of California, its primary market, than in the state.
Tesla has been among the hottest stocks in the U.S. since posting an $11 million net profit in the first quarter of 2013. Investors have gobbled up shares in the company as Mr. Musk has outlined a vision of selling between 400,000 and 500,000 electric vehicles a year, including a sport-utility vehicle and a second, lower priced sedan.
Write to Mike Ramsey at
Credit: By Mike Ramsey
Subject: Net losses; Automobile industry; Financial performance; Corporate profits; Costs
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Aug 7, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1418257144
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1418257144?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Earnings: Tesla Hikes Output --- Investor Push Up Shares on Smaller Loss
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 Aug 2013: B.6.
ProQuest document link
Abstract:
Luxury electric-car maker Tesla Motors Inc. reported a net loss for the second quarter, but exceeded Wall Street expectations for production and gross margins, sending its shares higher in after-hours trading.
Full text: Luxury electric-car maker Tesla Motors Inc. reported a net loss for the second quarter, but exceeded Wall Street expectations for production and gross margins, sending its shares higher in after-hours trading.
The Palo Alto, Calif., company posted a $30.5 million loss, or 26 cents a share, compared with a year-earlier loss of $105.6 million, or $1 a share. Revenue soared to $405.1 million from $26.7 million a year ago when its $80,000 and up Model S plug-in was just beginning deliveries.
Tesla Chief Executive Elon Musk in a letter to shareholders said that Tesla had a profit of $7 million, or 5 cents a share, when excluding costs associated with stock compensation, early repayment of a federal loan and costs associated with a lease program. Such measures don't conform to generally accepted accounting principles, or GAAP.
On a GAAP basis, consistent with the way that rival auto makers report results, Tesla said it lost $11.79 million from operations, before interest and taxes, during the just-ended quarter, and burned $78.7 million in cash.
Revenue declined by more than $150 million from the first quarter, mainly because the company deferred some revenue associated with cars delivered under a new financing program designed to mimic a lease.
The purchase/lease financing accounted for 30% of the auto maker's sales in the quarter ended June 30. In addition to the lease change, Tesla received $51 million from selling pollution credits to other auto makers, down from $68 million in the prior quarter.
Tesla said it had cash on hand of $746 million, up from $214 million at the end of the first quarter, reflecting a sale of shares during the quarter.
Model S deliveries increased by 5% from the first quarter to 5,150 cars. Tesla said it began delivering cars to Europe this year and forecast it would produce about 5,000 vehicles in the current quarter. It delivered 89 cars in the year-earlier quarter.
Mr. Musk said during a conference call that its current backlog of Model S orders is averaging about 20,000 in North America on an annual basis. He said based on current reservations abroad that global demand for the model should be about 40,000 a year.
He said the company is working through production constraints that have been caused primarily by suppliers that haven't scaled up enough to meet demand. Mr. Musk said suppliers were following guidance from forecasting firm IHS Automotive that Tesla would sell only 3,000 Model S vehicles in its entire lifetime and didn't build enough capacity to meet current demand.
Lower-cost batteries should enable Tesla to make a profit on a planned lower-cost electric sedan in late 2016, he said. "I have high confidence that we can create a compelling car for around $35,000 -- compelling being around 200 miles range."
A concern is capacity to produce enough battery cells for the vehicle, he said. "It's really quite a large number to be supplying a factory that is producing say, 400,000 to 500,000 cars."
Shares jumped $17.97, or 13.4%, after finishing down 5.5% at $134.23 in 4 p.m. trading on the Nasdaq Stock Market.
Mr. Musk affirmed in his letter to shareholders that Tesla can deliver about 21,000 cars this year and said the company is on track to achieve 25% gross margins for the year, using a non-GAAP calculation.
Mr. Musk affirmed a forecast for Tesla's non-GAAP gross margin to hit 25% by the fourth quarter, and added, "we are cautiously optimistic that a number above that level may be achievable in future quarters."
Investors are closely following gross margin as a signpost for how well the young company is managing itself.
Credit: By Mike Ramsey
Subject: Net losses; Financial performance; Automobile industry; Corporate profits; Company reports; Earnings per share; Stock prices
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 3100: Capital & debt management; 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.6
Publication year: 2013
Publication date: Aug 8, 2013
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1418352820
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1418352820?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Rides Roughshod Over Naysayers; The Shares Look Extremely Richly Valued, but That Alone Won't Be Enough to Send Them Lower
Author: Lahart, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Aug 2013: n/a.
ProQuest document link
Abstract:
Chief Executive Elon Musk's vision of a world where Tesla is producing 400,000 to 500,000 cars a year may seem far-fetched, but so long as it tops sales and margin estimates--as its second-quarter results did handily--the stock market will give him the benefit of the doubt.
Full text: Did you hear the one about how Tesla Motors shares are overvalued? By this point, everybody has.
After gaining 54% in just two months, Tesla looked ridiculously expensive at the start of May, when it traded at 121 times expected earnings and was worth $6.1 billion. Any valuation-based argument for buying the stock was predicated on the belief that the company would go from selling 20,000 or so electric cars this year to something upward of 400,000 electric cars a year in 2025. At which point, adjusting for wear, tear and wrecks, there would be something close to 1.5 million Teslas on the road.
But after climbing 14% on the back of its second-quarter results late Wednesday, Tesla shares are worth about three times as much as they were in early May. The company, with a market value of $18.7 billion, is worth a bit more than a quarter of Ford Motor. Ford's vehicles aren't as expensive as Teslas, but the company does sell more than five million of them a year.
Nevertheless, betting against Tesla shares remains a dangerous proposition. Just because some investors have become exuberant about a stock, just because it seems beyond richly valued, and just because it has gone up a lot aren't reasons in themselves to bet that it is about to fall.
Think of Qualcomm some years ago. From the end of November 1998 to early May 1999, the company's shares rose more than 300%--roughly similar to the 345% move Tesla has seen since early March. At its peak in January 2000, Qualcomm shares were 2,514% above their late November 1998 level.
The key to how Tesla shares trade, for now, isn't so much how outsized their valuations seem but how well the company performs compared with expectations. Chief Executive Elon Musk's vision of a world where Tesla is producing 400,000 to 500,000 cars a year may seem far-fetched, but so long as it tops sales and margin estimates--as its second-quarter results did handily--the stock market will give him the benefit of the doubt.
Write to Justin Lahart at
Credit: By Justin Lahart
Subject: Financial performance; Electric vehicles
People: Musk, Elon
Company / organization: Name: Qualcomm Inc; NAICS: 511210, 334220; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Aug 8, 2013
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1418479675
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1418479675?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Rides Roughshod Over Its Naysayers
Author: Lahart, Justin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 Aug 2013: C.8.
ProQuest document link
Abstract:
Chief Executive Elon Musk's vision of a world where Tesla is producing 400,000 to 500,000 cars a year may seem far-fetched, but so long as it tops sales and margin estimates -- as its second-quarter results did handily -- the stock market will give him the benefit of the doubt.
Full text: [Financial Analysis and Commentary]
Hear the one about how Tesla Motors shares are overvalued? Everybody has.
After gaining 54% in just two months, Tesla looked ridiculously expensive at the start of May, when it traded at 121 times expected earnings. Any valuation-based argument was based on the belief the company would go from selling 20,000 or so electric cars this year to upward of 400,000 a year in 2025. At which point, adjusting for wear, tear and wrecks, there would be close to 1.5 million Teslas around.
But after climbing 14% on the back of second-quarter results late Wednesday, Tesla shares are worth about three times as much as in early May. With a market value of $18.2 billion, Tesla is worth more than a quarter of Ford Motor. Ford's vehicles aren't as expensive as Teslas, but it sells more than five million a year.
Still, betting against Tesla remains a dangerous proposition. Just because some investors have become exuberant, just because it is beyond richly valued, and just because its stock has soared aren't reasons in themselves to bet that it is about to fall.
Think of Qualcomm. From the end of November 1998 to early May 1999, its shares rose more than 300% -- similar to the 340% move Tesla has seen since early March. At its peak in January 2000, Qualcomm shares were 2,514% above their late November 1998 level.
The key to how Tesla shares trade, for now, is how well the company performs compared with expectations. Chief Executive Elon Musk's vision of a world where Tesla is producing 400,000 to 500,000 cars a year may seem far-fetched, but so long as it tops sales and margin estimates -- as its second-quarter results did handily -- the stock market will give him the benefit of the doubt.
Credit: By Justin Lahart
Subject: Financial performance
People: Musk, Elon
Company / organization: Name: Qualcomm Inc; NAICS: 511210, 334220; Name: Tesla Motors Inc; NAICS: 336999
Classification: 9180: International; 3400: Investment analysis & personal finance; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.8
Publication year: 2013
Publication date: Aug 9, 2013
column: Heard on the Street
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1418626847
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1418626847?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Crystal Ball; What's ahead for shares of car maker Tesla Motors?
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Aug 2013: n/a.
ProQuest document link
Abstract: None available.
Full text: Send your prediction to crystalball@wsj.com by midnight EDT Sunday, with your full name, city, state and phone number. The first reader to get it right will be named in next Saturday's paper.
* Shares of electric-car company Tesla Motors shot up 14% on Thursday after the company reported a surprise quarterly profit that beat analysts' expectations. On Friday, shares closed at $153. What will their closing price be next Tuesday?
We "like" Shalini Khatri, of Marietta, Ga., who came closest to guessing Facebook's closing share price of $38.55 on Tuesday.
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Aug 9, 2013
Section: Personal Finance
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1418848716
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1418848716?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Amps Its Model S Safety Rating; Car Maker Extrapolates U.S. Five-Star Crash Ranking System to Give Itself Top Honors
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Aug 2013: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. has created its own vehicle-safety ranking based on federal crash-test data to amplify a claim that its Model S electric car is the safest car ever tested by U.S. regulators.
Full text: Tesla Motors Inc. has created its own vehicle-safety ranking based on federal crash-test data to amplify a claim that its Model S electric car is the safest car ever tested by U.S. regulators.
Tesla, in a statement widely reported this week, said its car "achieved a new combined record of 5.4-stars" in federal crash tests. Tesla noted that the National Highway Traffic Safety Administration, which conducts the government's auto-crash tests, doesn't use a rating above five stars.
In a statement on Tuesday, NHTSA said "one star is the lowest rating; five stars is the highest. More stars equal safer cars. NHTSA doesn't rate vehicles beyond five stars and doesn't rank or order vehicles within the starred categories." Agency officials declined to elaborate further.
Here's how Tesla derived its "5.4 stars" claim.
To attain a five-star government rating, an occupant must have a less than 10% chance to be injured in a frontal crash, 5% or less in a side impact, and 10% or less risk of injury in a rollover, for example.
In addition to the stars, NHTSA calculates a numeric vehicle-safety score that effectively ranks cars across its crash-test categories. That score correlates to the overall probability of an occupant being injured in an accident.
A vehicle's safety score also correlates to the star-rating system published on NHTSA's consumer-focused website, safercar.gov. The lower the numeric score, the lower the chance of injury to an occupant. But the agency doesn't publish a ranking of cars based on their specific vehicle-safety scores. Instead it provides the scores to manufacturers and the data can be found in government documents online.
Tesla's vehicle safety score was 0.42, which was lower than any other car listed in public documents. For example, General Motors Co.'s Buick Verano scored a 0.50, the second lowest of 130 vehicles recently tested, while the Cadillac ATS, which received a 0.53, also got five stars in each category along with the Model S.
Tesla spokeswoman Shanna Hendriks said the company extrapolated from the federal safety-rating system that to score six stars, a passenger would have zero chance of being injured. Tesla then calculated that its scores in each of the four categories of NHTSA crash tests fell between the threshold for five stars and its own six-star ranking, thus the 5.4 star rating.
NHTSA results indicate that the Model S and other electric cars fared well in some crash tests because they don't have heavy piston engines sitting inches from passengers. And while the weight of an electric car's battery is a challenge for engineers trying to extend driving range, they can be used to make cars more stable on the road.
The vehicle's 1,000-pound battery also sits under the floor of the vehicle, giving it a low center of gravity that makes it exceptionally difficult to roll over. Tesla said it reinforced other areas of the car to ensure it could withstand crashes, including a second bumper if a customer orders the optional, rear-facing jump seat third row for children.
Five-star ratings are difficult to attain, particularly since updates were made to the scoring and testing procedure in 2011. And while not having an engine helps other EVs, it doesn't ensure a perfect score. The Nissan Motor Co. Leaf electric car scored four stars on each of the four areas of the test, for example.
The forthcoming BMW i3, which uses a carbon-fiber passenger cabin and aluminum space frame design, hasn't yet been rated by the safety agency.
"We have done crash testing, and anecdotally the car is incredibly crash worthy," said Dave Buchko, a spokesman for the company.
Tesla said the machine that tests the strength of a car's roof broke when it tried to crush the top of a Model S. NHTSA didn't comment on the report.
Earlier this year, Consumer Reports magazine, which purchases vehicles and then independently tests them, gave the Model S its highest score ever, a 99 out of 100. The positive reviews for the vehicle, which starts at $70,000 for a 208-mile range model, have helped quadruple Tesla's stock price this year. Tesla shares were down about 1% at $148.16 on Wednesday in Nasdaq Stock Market trading.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: Mike Ramsey
Subject: Automobile industry; Stars & galaxies; Ratings & rankings; Government documents
Location: United States--US
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Tesla Motors Inc; NAICS: 336999
Product name: Cadillac ATS
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Aug 21, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1426609959
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1426609959?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Corporate News: Tesla Amps Its Crash Score
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]22 Aug 2013: B.3.
ProQuest document link
Abstract:
Tesla Motors Inc. has created its own vehicle-safety ranking based on federal crash-test data to amplify a claim that its Model S electric car is the safest car ever tested by U.S. regulators.
Full text: Tesla Motors Inc. has created its own vehicle-safety ranking based on federal crash-test data to amplify a claim that its Model S electric car is the safest car ever tested by U.S. regulators.
Tesla, in a statement widely reported this week, said its car "achieved a new combined record of 5.4-stars" in federal crash tests. Tesla noted that the National Highway Traffic Safety Administration, which conducts the government's auto-crash tests, doesn't use a rating above five stars.
In a statement on Tuesday, NHTSA said "one star is the lowest rating; five stars is the highest. More stars equal safer cars. NHTSA doesn't rate vehicles beyond five stars and doesn't rank or order vehicles within the starred categories." Agency officials declined to elaborate further.
Here's how Tesla derived its "5.4 stars" claim.
To attain a five-star government rating, an occupant must have a less than 10% chance to be injured in a frontal crash, 5% or less in a side impact, and 10% or less risk of injury in a rollover, for example.
In addition to the stars, NHTSA calculates a numeric vehicle-safety score that effectively ranks cars across its crash-test categories. That score correlates to the overall probability of an occupant being injured in an accident.
A vehicle's safety score also correlates to the star-rating system published on NHTSA's consumer-focused website, safercar.gov. The lower the numeric score, the lower the chance of injury to an occupant. But the agency doesn't publish a ranking of cars based on their specific vehicle-safety scores. Instead it provides the scores to manufacturers and the data can be found in government documents online.
Tesla's vehicle safety score was 0.42, which was lower than any other car listed in public documents. For example, General Motors Co.'s Buick Verano scored a 0.50, the second lowest of 130 vehicles recently tested, while the Cadillac ATS, which received a 0.53, also got five stars in each category along with the Model S.
Tesla spokeswoman Shanna Hendriks said the company extrapolated from the federal safety-rating system that to score six stars, a passenger would have zero chance of being injured. Tesla then calculated that its scores in each of the four categories of NHTSA crash tests fell between the threshold for five stars and its own six-star ranking, thus the 5.4 star rating.
NHTSA results indicate that the Model S and other electric cars fared well in some crash tests because they don't have heavy piston engines sitting inches from passengers. And while the weight of an electric car's battery is a challenge for engineers trying to extend driving range, they can be used to make cars more stable on the road.
The vehicle's 1,000-pound battery also sits under the floor of the vehicle, giving it a low center of gravity that makes it exceptionally difficult to roll over. Tesla said it reinforced other areas of the car to ensure it could withstand crashes, including a second bumper if a customer orders the optional, rear-facing jump seat third row for children.
Five-star ratings are difficult to attain, particularly since updates were made to the scoring and testing procedure in 2011. And while not having an engine helps other EVs, it doesn't ensure a perfect score. The Nissan Motor Co. Leaf electric car scored four stars on each of the four areas of the test, for example.
The forthcoming BMW i3, which uses a carbon-fiber passenger cabin and aluminum space frame design, hasn't yet been rated by the safety agency.
"We have done crash testing, and anecdotally the car is incredibly crash worthy," said Dave Buchko, a spokesman for the company.
Tesla said the machine that tests the strength of a car's roof broke when it tried to crush the top of a Model S. NHTSA didn't comment on the report.
Earlier this year, Consumer Reports magazine, which purchases vehicles and then independently tests them, gave the Model S its highest score ever, a 99 out of 100. The positive reviews for the vehicle, which starts at $70,000 for a 208-mile range model, have helped quadruple Tesla's stock price this year. Tesla shares were down about 1% at $148.16 on Wednesday in Nasdaq Stock Market trading.
Credit: By Mike Ramsey
Subject: Automobile industry; Ratings & rankings; Traffic accidents & safety
Location: United States--US
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2013
Publication date: Aug 22, 2013
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1426741407
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1426741407?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
GM Developing Car to Rival Tesla; Cost of Advanced Battery-Technology Remains Hurdle to Building Longer-Range Vehicles
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Sep 2013: n/a.
ProQuest document link
Abstract:
General Motors Co. is developing an electric car that can go 200 miles on a charge for around $30,000, officials at the largest U.S. auto maker said, offering a challenge to luxury electric-car startup Tesla Motors Inc. Doug Parks, GM's vice president of global product programs, disclosed the effort on Monday at GM's battery laboratory and test facility in Warren, Mich., but didn't say when the car would be available.
Full text: General Motors Co. is developing an electric car that can go 200 miles on a charge for around $30,000, officials at the largest U.S. auto maker said, offering a challenge to luxury electric-car startup Tesla Motors Inc.
Doug Parks, GM's vice president of global product programs, disclosed the effort on Monday at GM's battery laboratory and test facility in Warren, Mich., but didn't say when the car would be available. He said while the technology is available now, the cost of the batteries remains too high to be able to pull off the feat today.
GM's move to raise the profile of its battery research efforts comes as Tesla is challenging the established auto industry's claim to technology leadership with its $70,000 and up Model S. Mr. Parks' comments came just a few days after Germany's Volkswagen AG said it intended to become the largest seller of electric vehicles by 2018.
Analysts and industry executives say Tesla, GM, VW and the current global electric vehicle sales leader, Nissan Motor Co., all face the same problem: current electric vehicle batteries are too expensive, and deliver too little usable driving range compared with vehicles powered by internal combustion engines.
The number of electric and plug-in hybrid vehicles for sale in the U.S. has more than quadrupled to 15 vehicles since 2010 as auto makers roll out new models to comply with government mandates. But sales of electric and plug-in hybrid vehicles account for less than half of one percent of the overall market, despite price cuts, discounted leases and government tax incentives that can add up to as much as $12,500 a vehicle depending on the state.
GM has sold nearly 15,000 of its battery-powered Chevrolet Volt cars this year through August, aided by incentives and discounts.
Nissan's approach is to argue that extending the range of electric vehicles to 200 miles isn't worth it because most people don't drive farther in a day than the Nissan Leaf's 75 miles of all-electric range. The Leaf costs $28,800 in the U.S. before federal tax credits.
Tesla is the lone auto maker to offer long-range electric vehicles with its Model S--and Tesla still hasn't shown it can steadily make money selling them.
Tesla Chief Executive Elon Musk said recently that "it didn't require a miracle" to sell a 200-mile range electric car for around $35,000 in the next three or four years.
Every other EV currently on the market gets about 100 miles of range or less. Starting prices for them currently range between $25,000 for the Smart Fortwo EV and $50,000 for the RAV4 EV. BMW's i3, launching later this year, is expected to start at $41,350.
Kevin Gallagher, a chemist and researcher at the Department of Energy's Argonne National Laboratory, said auto makers are spending about $500 a kilowatt hour on battery packs. That means the 24 kwh pack on the Nissan Leaf would cost around $12,000. Last year, Ford CEO Alan Mulally said the battery on the Focus EV with 23 kwh of energy costs between $13,000 and $15,000.
Tesla Chief Technical Officer JB Straubel says the company's battery costs are half or even a quarter of the price of the industry average, partly because of the company's strategy to use thousands of commodity battery casings rather than the specialized batteries that GM and Nissan use.
"The battery prices in the Model S are substantially lower than what everyone expects today," he said in an interview. Mr. Straubel expects the energy density in Tesla's batteries will increase by more than 20% by the time Tesla's mass-market car comes out in about four years. More energy in batteries should equate to longer driving range for roughly the same price.
Tesla doesn't disclose what its batteries cost. Toyota Motor Corp.'s electric RAV4 sport-utility vehicle is outfitted by Tesla with batteries and a Tesla motor. It has a 41.8 kwh battery pack and has 103 miles of range. The starting price of $49,800 is about $26,500 more than the internal combustion engine RAV4 that starts at $23,300.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: Mike Ramsey
Subject: Electric vehicles; Automobile industry; Hybrid vehicles; Costs; Price cuts
Location: United States--US
People: Musk, Elon
Company / organization: Name: Nissan Motor Co Ltd; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999
Product name: Chevrolet Volt
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Sep 16, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language ofpublication: English
Document type: News
ProQuest document ID: 1432878690
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1432878690?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Corporate News: GM Floats $30,000 Electric Car to Rival Tesla Model S
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 Sep 2013: B.3.
ProQuest document link
Abstract:
General Motors Co. is developing an electric car that can go 200 miles on a charge for around $30,000, officials at the largest U.S. auto maker said, offering a challenge to electric-car startup Tesla Motors Inc. Doug Parks, GM's vice president of global product programs, disclosed the effort Monday at GM's battery laboratory and test facility in Warren, Mich., but didn't say when the car would be available.
Full text: General Motors Co. is developing an electric car that can go 200 miles on a charge for around $30,000, officials at the largest U.S. auto maker said, offering a challenge to electric-car startup Tesla Motors Inc.
Doug Parks, GM's vice president of global product programs, disclosed the effort Monday at GM's battery laboratory and test facility in Warren, Mich., but didn't say when the car would be available. He said while the technology is available now, the cost of the batteries remains too high to be able to pull off the feat today.
GM's move to raise the profile of its battery research efforts comes as Tesla is challenging the established auto industry's claim to technology leadership with its $70,000 and up Model S. Mr. Parks' comments came just a few days after Germany's Volkswagen AG said it intended to become the largest seller of electric vehicles by 2018.
Analysts and industry executives say Tesla, GM, VW and the current global electric vehicle sales leader, Nissan Motor Co., all face the same problem: current electric vehicle batteries are too expensive, and deliver too little usable driving range compared with vehicles powered by internal combustion engines.
The number of electric and plug-in hybrid vehicles for sale in the U.S. has more than quadrupled to 15 vehicles since 2010 as auto makers roll out new models to comply with government mandates. But sales of electric and plug-in hybrid vehicles account for less than half of 1% of the overall market, despite price cuts, discounted leases and government tax incentives that can add up to as much as $12,500 a vehicle depending on the state.
GM has sold nearly 15,000 of its battery-powered Chevrolet Volt cars this year through August, aided by incentives and discounts. The Volt's extended range comes from a gasoline engine that recharges its battery.
Nissan's approach is to argue that extending the range of electric vehicles to 200 miles isn't worth it because most people don't drive farther in a day than the Nissan Leaf's 75 miles of all-electric range. The Leaf costs $28,800 in the U.S. before federal tax credits.
Tesla is the lone auto maker to offer long-range electric vehicles with its Model S -- and Tesla still hasn't shown it can steadily make money selling them.
Tesla Chief Executive Elon Musk said recently that "it didn't require a miracle" to sell a 200-mile range electric car for around $35,000 in the next three or four years.
Every other EV currently on the market gets about 100 miles of range or less. Starting prices for them currently range between $25,000 for the Smart Fortwo EV and $50,000 for the RAV4 EV. BMW's i3, launching later this year, is expected to start at $41,350.
Kevin Gallagher, a chemist and researcher at the Department of Energy's Argonne National Laboratory, said auto makers are spending about $500 a kilowatt hour on battery packs. That means the 24 kwh pack on the Nissan Leaf would cost around $12,000. Last year, Ford CEO Alan Mulally said the battery on the Focus EV with 23 kwh of energy costs between $13,000 and $15,000.
Tesla Chief Technical Officer JB Straubel says the company's battery costs are half or even a quarter of the price of the industry average, partly because of the company's strategy to use thousands of commodity battery casings rather than the specialized batteries that GM and Nissan use.
"The battery prices in the Model S are substantially lower than what everyone expects today," he said in an interview. Mr. Straubel expects the energy density in Tesla's batteries will increase by more than 20% by the time Tesla's mass-market car comes out in about four years. More energy in batteries should equate to longer driving range for roughly the same price.
Tesla doesn't disclose what its batteries cost. Toyota Motor Corp.'s electric RAV4 sport-utility vehicle is outfitted by Tesla with batteries and a Tesla motor. It has a 41.8 kwh battery pack and has 103 miles of range. The starting price of $49,800 is about $26,500 more than the internal combustion engine RAV4 that starts at $23,300.
Credit: By Mike Ramsey
Subject: Automobile industry; Competition; Electric vehicles; Product development
Location: United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: General Motors Corp; NAICS: 333415, 336111, 336390
Classification: 9190: United States; 8680: Transportation equipment industry; 7500: Product planning & development
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2013
Publication date: Sep 17, 2013
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1432979596
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1432979596?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Inventions Without Government and the Physics of Cars; Take away the government requirements and subsidies for car manufacturers, the California carbon credits for Tesla, and the tax credits for buyers and then let's see how many people will want electric cars.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Sep 2013: n/a.
ProQuest document link
Abstract:
Take away the government requirements and subsidies for car manufacturers, the California carbon credits for Tesla Motors Inc. and the tax credits for buyers, and then let's see how many people will want electric cars.
Full text: In response to Jack Gillis's euphoria over electric cars (, Sept. 21): I bought my first pocket calculator in the 1970s for $99 and my first IBM PC with 64k of memory in 1982 for $4,500 because they were innovative and time-saving. There were no government requirements that the developers make these devices or subsidies to help develop them and no tax credits to help me pay for them.
Take away the government requirements and subsidies for car manufacturers, the California carbon credits for Tesla Motors Inc. and the tax credits for buyers, and then let's see how many people will want electric cars. In reality, most people are happy with modern gasoline-powered or hybrid cars, and there is little demand for the present, impractical electric vehicles. It is only because of the zealots in our governments, who think they are saving the planet, that these cars are being forced on us at taxpayer expense.
Fredric Reichel
Santa Monica, Calif.
Mr. Gillis makes the seemingly plausible point that, in view of the rapid and ongoing shrinking pricing of electronic devices such as calculators, cellphones, HDTVs and laptops, a similar pricing trend can be expected for electric vehicles.
However, the former are information devices that gain from miniaturization while electric vehicles are energy devices that, at best, can expect to benefit from marginal efficiency enhancement.
The information devices have improved primarily by reducing the number of electrons and electrical potential required to function. The laws of physics are not kind to vehicles in that they require essentially a fixed number of electrons at a given potential to accomplish a fixed amount of work. And unlike an electronic board, reducing the size of a car soon reaches a point of diminishing returns. The electric car will realize only modest scale economies in that, as a car, it's a largely mature product.
Thomas W. O'Rourke
Boulder, Colo.
Subject: Electric vehicles; Automobile industry; Subsidies
Location: California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Sep 26, 2013
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1436991535
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1436991535?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Sedan Roars Ahead in Norway; Norway Has Relatively Small Market But Buyers Are Affluent
Author: Grundberg, Sven
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Oct 2013: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Motors Inc.'s Model S is suddenly the No. 1 car in Norway, where the government is using its oil wealth to smooth the way for battery-powered cars.
The California company's electric sedan, the Model S, vaulted to become the best-selling car in Norway in September, just its second month on the market. Tesla captured 5.1% of Norway's total car sales share during the month. The total number of rechargeable electric cars on the road in Norway is estimated to total 14,500 vehicles. (In all of 2012, auto makers sold just 13,427 electric cars in the larger U.S. market, according to figures compiled by the Electric Drive Transportation Association.)
Advocates of electric vehicles point to Norway as a template for what the rest of the world needs to do to jump-start electric car sales.
But what works in this nation of 5 million people filled with potential buyers made wealthy by a booming gas and oil industry might be a hard sell in other markets.
Policy makers in Norway have exempted electric vehicles from a 25% value added tax and a registration tax that can reach 10s of thousands of dollars a vehicle. Its fuel prices are among the highest in Europe, with a typical liter of petrol costing 15.16 Norwegian kronor, which is roughly equivalent to $9.60 per gallon.
Electric cars also are exempt from tolls, and get access to bus lanes on Oslo's highways, thus dodging the congestion that snares ordinary drivers during rush hours.
Norwegians car buyers have to be willing to pay premiums, even compared with neighboring Sweden, which is already considered high cost. An Audi A8 costs 1.06 million kroner ($176,000), $50,000 more than in Sweden, due to fees based on weight and emissions. Boosted by such measures, electric vehicle sales in Norway during August were more than twice that of the much larger German market in the same month. Nissan Motor Co.'s Leaf electric car has become the fifth best-selling model of any kind in Norway through nine months, capturing nearly 3% of the total share of the market.
Norway and its capital city, Oslo, also have built a hefty network of taxpayer-supported charging stations. On any given day, owners of Leafs and other cars like it can pull into one of a clutch of public lots that have public chargers and are exclusively for EV use.
Oslo Mayor Fabian Stang, who owns an electric bicycle, recently declared his city the "capital of electric vehicles." He calls Norway's stance on electric vehicles "part of our bigger commitment to the environment." Norway's national government has estimated the country owns the most electric vehicles per capita in world.
Norway's spending on electric car subsidies is buoyed by a $750 billion sovereign-wealth fund--believed to be the largest in the world. So the Nordic state has deeper pockets than most in Western Europe and can easily subsidize electric car sales.
In other countries, electric car demand has been less robust. France is home to one of the most vigorous electric car evangelists in the auto industry, Renault SA Chief Executive Carlos Ghosn. But electric car sales there account for less than 1% of the total market.
Electric cars have so far captured 3.4% of Norway's new car market through the first eight months of 2013, according to data from AID Ltd.
In Germany, where Volkswagen AG recently declared its ambition to be the world electric car leader, such vehicles captured an even smaller 0.2% share. In the U.K., electric cars represent just 0.1% of the market.
Tesla was making inroads in Norway even before the Model S launch. Some well-heeled buyers amassed large collections of the company's original Roadster. Norwegian taxi fleets have even begun buying Teslas.
It's not clear whether the Model S can sustain its lead in Norway. The company just launched the Model S in August, and pent up demand could account for some of September's 616 Model S sales, as tallied by Opplysningsrådet for Veitrafikken, which compiles Norwegian car sales data.
"Demand is still very strong in Europe and Norway," said Kathrin Schira, a Tesla spokeswoman. She added that Tesla expects demand for its cars to remain strong as the company opens more stores, service centers, and rolls out its network of charging stations.
The Norwegian government's willingness to juice demand for a premium vehicle like the Model S has drawn fire from some critics.
"As long as we're talking about small cars like the Nissan Leaf I don't mind, but here you're subsidizing a car that without subsidies would cost more than a million kroner," says Jon Winding-Sørensen, a veteran Norwegian car journalist.
Write to Sven Grundberg at sven.grundberg@dowjones.com and Niclas Rolander at niclas.rolander@dowjones.com
Credit: Sven Grundberg
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Oct 2, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1438837440
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1438837440?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Corporate News: Norway Tax Breaks Lift Tesla Sales
Author: Grundberg, Sven; Rolander, Niclas
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Oct 2013: B.2.
ProQuest document link
Abstract:
(In all of 2012, auto makers sold just 13,427 electric cars in the larger U.S. market, according to figures from the Electric Drive Transportation Association.) Advocates of electric vehicles point to Norway as a template for what the rest of the world needs to do to jump-start electric car sales.
Full text: Tesla Motors Inc.'s Model S is suddenly the No. 1 car in Norway, where the government is using its oil wealth to juice battery-powered car sales.
The California company's electric sedan, the Model S, vaulted to become the best-selling car in Norway in September, just its second month on the market. Tesla captured 5.1% of Norway's total car sales share during the month. The total number of rechargeable electric cars on the road in Norway is estimated to total 14,500 vehicles. (In all of 2012, auto makers sold just 13,427 electric cars in the larger U.S. market, according to figures from the Electric Drive Transportation Association.)
Advocates of electric vehicles point to Norway as a template for what the rest of the world needs to do to jump-start electric car sales.
But what works in this nation of five million people filled with potential buyers made wealthy by a booming gas and oil industry might be a hard sell in other markets.
Policy makers in Norway have exempted electric vehicles from a 25% value added tax and a registration tax that can reach tens of thousands of dollars a vehicle. Its fuel prices are among the highest in Europe, with a typical liter of petrol costing 15.16 Norwegian kronor, which is roughly equivalent to $9.60 per gallon.
Electric cars also are exempt from tolls, and get access to bus lanes on Oslo's highways, thus dodging the congestion that snares ordinary drivers during rush hours.
Norwegian car buyers have to be willing to pay premiums, even compared with neighboring Sweden, which is already considered high cost. An Audi A8 costs 1.06 million kroner ($176,000), $50,000 more than in Sweden, due to fees based on weight and emissions. Boosted by such measures, electric car sales in Norway during August were more than twice that of the much larger German market in the same month. Nissan Motor Co.'s Leaf electric car has become the fifth best-selling model of any kind in Norway.
Oslo Mayor Fabian Stang recently declared his city the "capital of electric vehicles." He calls Norway's stance on electric vehicles "part of our bigger commitment to the environment." Norway's national government has estimated the country owns the most electric vehicles per capita in world.
Norway's spending on electric car subsidies is buoyed by a $750 billion sovereign-wealth fund -- believed to be the largest in the world. So the Nordic state has deeper pockets than most in Western Europe and can easily subsidize electric car sales.
In other countries, electric car demand has been less robust. France is home to one of the most vigorous electric car evangelists in the auto industry, Renault SA Chief Executive Carlos Ghosn. But electric car sales there account for less than 1% of the total market.
Credit: By Sven Grundberg and Niclas Rolander
Subject: Electric vehicles; Automobile industry; Automobile sales; Tax incentives
Location: United States--US Norway Western Europe
Company / organization: Name: Nissan Motor Co Ltd; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999
Classification: 9180: International; 8680: Transportation equipment industry; 4210: Institutional taxation
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2013
Publication date: Oct 3, 2013
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1438952894
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1438952894?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Stock Falls on Video of Fiery Crash; Electric Car Maker's Shares Drop Sharply After Images of a Burning Vehicle Spook Investors
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Oct 2013: n/a.
ProQuest document link
Abstract:
"The fire was caused by the direct impact of a large metallic object to one of the 16 modules within the Model S battery pack. Because each module within the battery pack is, by design, isolated by fire barriers to limit any potential damage, the fire in the battery pack was contained to a small section in the front of the vehicle," Tesla said in a written statement.\n
Full text: Tesla Motors Inc. shares sold off for a second day on Thursday as video of a Model S going up in flames after a crash this week overshadowed a potentially important gain in the electric car maker's battle with franchised car dealers.
The Palo Alto, Calif., maker of $70,000 and up electric cars said the fire was caused by metal road debris that damaged a module in its battery pack on the car's underbody. The accident didn't harm the driver.
Tesla shares fell $7.64 to $173.31 on Thursday on top of a $12.05 drop on Wednesday after a one-two punch that began with a downgrade by R.W. Baird brokerage to "neutral" from "outperform and expanded when an online video of a burning Tesla Model S went viral on the Web. The stock is up more than fivefold since its December close.
Lost in the downgrade and film was a deal in Virginia that allows the company to sell its vehicles directly at a Tyson's Corner, Va., outlet, and not just show them. The company is fighting state dealer groups and lawmakers who have fought its efforts to set up company-owned sales outlets.
Tesla agreed to withdraw a lawsuit appealing a decision by the Virginia Department of Motor Vehicles to deny a dealership license in return for being able to begin sales in Tyson's Corner, a Washington, D.C., suburb.
The Virginia Auto Dealers Association had been trying to block Tesla's application for a dealership license, claiming that Tesla shouldn't be granted one because it didn't have a franchisee running the dealership.
The case was set to go to trial in January, said Don Hall, the president of the dealers' association.
"As a result of that, Tesla now has the potential to petition the motor-vehicle dealer board to get a license, but only operate in one location," Mr. Hall said.
Mr. Hall indicated Tesla might be able to apply for more sales outlets at some point, but he declined to provide details.
Dealers fear that direct sales by Tesla could provide an entry for other foreign auto makers from China or India to begin direct sales in the U.S. Similarly, dealers worry that major auto makers, such as General Motors Co. or Ford Motor Co. might try to evade state franchise laws to sell directly to customers.
In North Carolina, Tesla managed to stop an effort by legislators to prevent consumers from buying its vehicles altogether over the Internet. New York dealers made a legislative push to ban Tesla dealerships that also failed.
Tesla's cars are powered by lithium-ion batteries, which have become associated with fire risk after various incidents, including fires traced to lithium-ion batteries aboard Boeing Co.'s Dreamliner 787 jetliners.
Tesla said metal debris damaged one of the 16 battery compartments in the 1,000-pound pack that sits under the passenger area of the vehicle and resulted in some of the cells catching fire. The flames were contained to one area of the battery pack, but caused the front of the car to catch fire. The passenger area of the car was unaffected, it said.
"The fire was caused by the direct impact of a large metallic object to one of the 16 modules within the Model S battery pack. Because each module within the battery pack is, by design, isolated by fire barriers to limit any potential damage, the fire in the battery pack was contained to a small section in the front of the vehicle," Tesla said in a written statement.
Tesla designed its battery pack with the idea that cells could catch fire, but that the fire wouldn't spread. The vehicle received the highest crash-test ratings of any vehicle tested in the past several years by the National Highway Traffic Safety Administration, but those tests don't include instances of running over a large metal object at high speeds.
The NHTSA isn't investigating any crash incidents because of the government shut down, the agency said in a statement. Tesla, however, is examining the vehicle at a service facility near Seattle, a company spokeswoman said.
GM's battery-powered Chevrolet Volt had an incident following crash tests by NHTSA several years ago. The cars' batteries hadn't been powered down appropriately and one caught fire several days after the crashes.
Fires in traditional gasoline-powered vehicles are relatively commonplace. Gasoline, used for more than century in vehicles, is extremely flammable and far more energy dense by volume than batteries.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: Mike Ramsey
Subject: Automobile dealers; Batteries; Vehicles
Location: Palo Alto California
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Department of Motor Vehicles-Virginia; NAICS: 926120; Name: Boeing Co; NAICS: 336411, 336413, 336414; Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Oct 3, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1439112039
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1439112039?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Corporate News: Tesla Shares Fall as Video Spooks Investors --- Electric Car Maker Off 10% in Two Days as Internet Recording of Burning Seattle Vehicle Slams Stock
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Oct 2013: B.6.
ProQuest document link
Abstract:
[...]of that, Tesla now has the potential to petition the motor-vehicle dealer board to get a license, but only operate in one location," Mr. Hall said.
Full text: Tesla Motors Inc. shares sold off for a second day on Thursday as video of a Model S going up in flames after a crash this week overshadowed a potentially important gain in the electric car maker's battle with franchised car dealers.
The Palo Alto, Calif., maker of $70,000 and up electric cars said the fire was caused by metal road debris that damaged a module in its battery pack on the car's underbody. The accident didn't harm the driver.
Tesla shares fell $7.64 to $173.31 on Thursday on top of a $12.05 drop on Wednesday after a one-two punch that began with a downgrade by R.W. Baird brokerage to "neutral" from "outperform and expanded when an online video of a burning Tesla Model S went viral on the Web. The stock is up more than fivefold since its December close.
Lost in the downgrade and film was a deal in Virginia that allows the company to sell its vehicles directly at a Tyson's Corner, Va., outlet, and not just show them. The company is fighting state dealer groups and lawmakers who have fought its efforts to set up company-owned sales outlets.
Tesla agreed to withdraw a lawsuit appealing a decision by the Virginia Department of Motor Vehicles to deny a dealership license in return for being able to begin sales in Tyson's Corner, a Washington, D.C., suburb.
The Virginia Auto Dealers Association had been trying to block Tesla's application for a dealership license, claiming that Tesla shouldn't be granted one because it didn't have a franchisee running the dealership.
The case was set to go to trial in January, said Don Hall, the president of the dealers' association.
"As a result of that, Tesla now has the potential to petition the motor-vehicle dealer board to get a license, but only operate in one location," Mr. Hall said.
Mr. Hall indicated Tesla might be able to apply for more sales outlets at some point, but he declined to provide details.
Dealers fear that direct sales by Tesla could provide an entry for other foreign auto makers from China or India to begin direct sales in the U.S. Similarly, dealers worry that major auto makers, such as General Motors Co. or Ford Motor Co. might try to evade state franchise laws to sell directly to customers.
Tesla's cars are powered by lithium-ion batteries, which have become associated with fire risk after various incidents, including fires traced to lithium-ion batteries aboard Boeing Co.'s Dreamliner 787 jetliners.
Tesla said metal debris damaged one of the 16 battery compartments in the 1,000-pound pack that sits under the passenger area of the vehicle and resulted in some of the cells catching fire. The flames were contained to one area of the battery pack, but caused the front of the car to catch fire. The passenger area of the car was unaffected, it said.
"The fire was caused by the direct impact of a large metallic object to one of the 16 modules within the Model S battery pack," Tesla said in a written statement.
Tesla designed its battery pack with the idea that cells could catch fire, but that the fire wouldn't spread. The vehicle received the highest crash-test ratings of any vehicle tested in the past several years by the National Highway Traffic Safety Administration, but those tests don't include instances of running over a large metal object at high speeds.
The NHTSA isn't investigating any crash incidents because of the government shut down, the agency said in a statement. Tesla, however, is examining the vehicle at a service facility near Seattle, a company spokeswoman said.
GM's battery-powered Chevrolet Volt had an incident following crash tests by NHTSA several years ago. The cars' batteries hadn't been powered down appropriately and one caught fire several days after the crashes.
Credit: By Mike Ramsey
Subject: Automobile industry; Electric vehicles; Traffic accidents & safety; Fires; Investment policy
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.6
Publication year: 2013
Publication date: Oct 4, 2013
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1439205801
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1439205801?accountid=7117
Copyright: (c) 2013 Dow Jo nes & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla's Amazonian Attributes
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Oct 2013: n/a.
ProQuest document link
Abstract:
In a model published by Morgan Stanley earlier this month, 89% of the net present value related to cash flows forecast for 2020 and beyond. In the report by an analyst at Jefferies that prompted Mr. Chanos' comment, some 92% of the net present value underlying the analyst's $210 target price relates to cash flows expected in 2020 and beyond.
Full text: Tesla Motors has a finger-lickin' valuation.
That's according to noted short seller Jim Chanos--and not in the tasty fried-chicken sense, either. At a recent Heard on the Street conference, the Kynikos Associates founder criticized an analyst's hefty valuation of the electric-vehicle pioneer as resting mostly on far-off forecasts. He licked his finger and held it up as if testing the wind to demonstrate the uncertainty inherent in such long-range predictions.
Innovators such as Tesla necessarily require faith on the part of investors. But even after this week's slippage, the stock is up three-fold since April to about $165, valuing Tesla at $20 billion. So investors are praying hard--and there are uncomfortable echoes of the tech bubble.
Just as investors today argue over whether Tesla is more Detroit or Silicon Valley, it was hard back in 1999 to decide if online retailer Amazon.com represented a genuinely new paradigm or just a different way of shifting merchandise. That makes valuation trickier than usual.
One method is discounted cash flow analysis. This involves forecasting future profits that could accrue to shareholders. Analysts layer on assumptions about a company's growth and costs, and then discount the resulting cash-flow estimates to get back to a present value: what a stock could be worth today.
But with a young company operating in a new field, requiring big spending upfront in hopes of huge profits further out, much of the expected value lies far into the future. In April 1999, Citigroup initiated research on Amazon with, of course, a buy rating. By the analyst's calculation, some 94% of Amazon's valuation related to cash flows expected 10 years out and beyond.
Citi forecast Amazon to generate net income of $2.9 billion on revenue of $48 billion in 2009. As it turned out, revenue that year was about half Citi's forecast and net income was less than a third. By 2012, though, Amazon's revenue had surpassed $61 billion--but it had swung to a net loss.
The obvious riposte is that Amazon's current market value of $149 billion is five times what it was when the Citi note was published. But there's a crucial caveat: An investor buying back then had to wait a long time and hang on for dear life to get to today's gains. For virtually all of the 10 years following April 1999, Amazon's stock lagged the S&P 500 and at one point had lost more than 90% of its value.
What's more, even today, Amazon's investment case rests on long-term optimism: In a model published by Morgan Stanley earlier this month, 89% of the net present value related to cash flows forecast for 2020 and beyond.
Now look at Tesla. In the report by an analyst at Jefferies that prompted Mr. Chanos' comment, some 92% of the net present value underlying the analyst's $210 target price relates to cash flows expected in 2020 and beyond.
Similar results can be found elsewhere. When J.P. Morgan Chase raised its target price for Tesla in August, 86% of the discounted-cash-flow valuation related to 2020 and beyond. The same figure for a model published last month by Deutsche Bank was 87%. By way of comparison, in a recent Deutsche model for General Motors, only 50% of the valuation was derived from projections past 2019.
Regardless of any particular views on Tesla, such long-dated valuations are inherently risky. Imagine an archer aiming at a far-off target: Pointing the arrow even a couple of degrees to the right or left can mean missing wildly.
Small changes in variables like the discount rate, which accounts for the time value of money and risks involved, have big effects. For example, the Jefferies model uses one of 9.8%. Add just one percentage point, and the net present value drops by 8.5%.
In an eye-catching report, Wedbush Securities recently boosted its 12-month target price for Tesla from $180 to $240, the highest on the Street, according to FactSet.
To get there, Wedbush placed a multiple of 30 times on forecast 2017 earnings, and then discounted those back at a rate of just 6%. It is hard to imagine more bullish assumptions, combining breakneck growth with a risk profile Exxon Mobil would envy. Virtually all of the target value resides in that 2017 assumption. Tweak it slightly, to a multiple of 28 times and an 8% discount rate, and the value drops to about $205--and those are still rosy assumptions.
These Tesla valuations come amid what looks like an arms race in upgrades. Wedbush's amounts to $7.1 billion of extra market value, bigger than the total market capitalization of dozens of S&P 500 companies. In the past month alone, there have been six target-price upgrades for Tesla, by an average of 30% each, according to FactSet.
The point isn't to poke fun at long-term assumptions that don't pan out--they almost never do. There can be no denying Tesla's success to date and the plaudits its vehicles have garnered. But by 2023, everything from gasoline prices to the competing line-ups of bigger rivals, and much else in between, will have changed in ways it is impossible to imagine today.
With so many unforeseen and potentially treacherous twists on the road ahead, it is risky to simply put the pedal to the metal and hope for the best.
Write to Liam Denning at liam.denning@wsj.com
Credit: Liam Denning
Subject: Present value; Investments; Valuation; Net losses; Discount rates; Expected values
Company / organization: Name: Citigroup Inc; NAICS: 551111; Name: Tesla Motors Inc; NAICS: 336999; Name: Morgan Stanley; NAICS: 523110, 523120, 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Oct 24, 2013
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1444583325
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1444583325?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Motors Taps Apple Talent; Electric-Car Maker Hires Computer Engineer Doug Field
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Oct 2013: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc., the Silicon Valley electric-car company, has hired Doug Field, a top Apple Inc. product engineer, to run its new-vehicle programs.
Full text: Tesla Motors Inc., the Silicon Valley electric-car company, has hired Doug Field, a top Apple Inc. product engineer, to run its new-vehicle programs.
Mr. Field, as vice president of Mac Hardware Engineering, led the development of products such as the latest MacBook Air, MacBook Pro and iMac, Tesla said. Earlier in his career, he was an engineer at Ford Motor Co.
Mr. Field's hiring illustrates how Tesla's management views its luxury vehicles high-end product as a piece of high-tech gadgetry. Indeed, electric vehicles have relatively few moving parts and increasingly resemble rolling smartphones, loaded with applications and technology.
"Doug has demonstrated the leadership and technical talent to develop and deliver outstanding products, including what are widely considered the best computers in the world," Elon Musk, Tesla co-founder and CEO, said in a release. "Tesla's future depends on engineers who can create the most innovative, technologically advanced vehicles in the world."
On Tesla's horizon are a new sport-utility vehicle called the Model X, due out late next year, and an entry-level sedan, likely called the Model E, to come out in 2016 or 2017.
Mr. Musk has dipped into Apple's talent pool before. He hired George Blankenship, a one-time Apple executive, to be vice president of sales. Mr. Blankenship is credited with creating Apple's unique store design and has been instrumental in designing Tesla's showrooms.
Mr. Field said he hadn't considered leaving Apple, located in nearby Cupertino, until Tesla came along.
"As the first high-tech auto company in modern history, Tesla is at last an opportunity for me and many others to pursue the dream of building the best cars in the world--while being part of one of the most innovative companies in Silicon Valley," Mr. Field said in a statement.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: Mike Ramsey
Subject: Automobile industry; Web sites; Vehicles; Engineers
People: Musk, Elon
Company / organization: Name: Model E; NAICS: 441110; Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Tesla Motors Inc; NAICS: 336999
Product name: Apple MacBook Air
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Oct 24, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1444633188
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1444633188?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Here to Eternity For Tesla
Author: Denning, Liam
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]25 Oct 2013: C.1.
ProQuest document link
Abstract:
In a model published recently by Morgan Stanley, 89% of the net present value related to cash flows forecast for 2020 and beyond. In the Jefferies report Mr. Chanos spoke of, some 92% of the net present value underlying the analyst's $210 target price relates to cash flows expected in 2020 and beyond.
Full text: [Financial Analysis and Commentary]
Tesla Motors has a finger-lickin' valuation. That is according to noted short seller Jim Chanos -- and not in the tasty fried-chicken sense, either. At a recent Heard on the Street conference, the Kynikos Associates founder criticized an analyst's hefty valuation of the electric-vehicle pioneer as resting mostly on far-off forecasts. He licked his finger and held it up as if testing the wind to demonstrate the uncertainty inherent in such long-range predictions.
Innovators such as Tesla necessarily require faith on the part of investors. The stock is up more than threefold since April, to about $173, valuing Tesla at $21 billion. So investors are praying hard -- and there are uncomfortable echoes of the tech bubble.
Just as many today argue over whether Tesla is more Detroit or Silicon Valley, it was hard back in 1999 to tell if online retailer Amazon.com represented a new paradigm or just a different way of shifting merchandise. That makes valuation trickier than usual.
One method is discounted cash-flow analysis. This involves forecasting future profits that could accrue to shareholders. Analysts layer on assumptions about growth and costs and then discount the resulting cash-flow estimates back to a present value: what a stock may be worth today.
But with a young firm in a new field, requiring big spending upfront in hopes of huge profits later on, much of the expected value lies far into the future. In April 1999, Citigroup initiated research on Amazon with, of course, a "buy" rating. In the analyst's model, some 94% of Amazon's valuation related to cash flows expected 10 years out and beyond.
Citi forecast Amazon to generate net income of $2.9 billion on revenue of $48 billion in 2009. As it turned out, revenue that year was about half Citi's forecast and net income was less than a third. By 2012, though, Amazon's revenue had surpassed $61 billion -- but it had swung to a net loss.
The obvious riposte is that Amazon's current market value of $149 billion is five times what it was when Citi's note came out. But there is a crucial caveat: An investor had to wait a long time and hang on for dear life to make those gains. For virtually all of the 10 years following April 1999, Amazon's stock lagged behind the S&P 500 and at one point had lost more than 90% of its value.
What's more, even today, Amazon's value rests on long-term optimism: In a model published recently by Morgan Stanley, 89% of the net present value related to cash flows forecast for 2020 and beyond.
Now look at Tesla. In the Jefferies report Mr. Chanos spoke of, some 92% of the net present value underlying the analyst's $210 target price relates to cash flows expected in 2020 and beyond. Similar results can be found elsewhere. When J.P. Morgan Chase raised its target price in August, 86% of the discounted-cash-flow valuation related to 2020 and beyond. The same figure for a recent model from Deutsche Bank was 87%. In contrast, a recent Deutsche model for General Motors derived only 50% of the valuation from projections past 2019.
Regardless of particular views on Tesla, such long-dated valuations are inherently risky. Imagine an archer aiming at a far-off target: Pointing the arrow even a couple of degrees to the right or left can mean missing wildly.
Small changes in variables like the discount rate, which accounts for the time value of money and risks involved, have big effects. For example, the Jefferies model uses one of 9.8%. Add just one percentage point, and the net present value drops by 8.5%.
In an eye-catching report, Wedbush Securities recently boosted its 12-month target price for Tesla from $180 to $240, the highest on the Street, according to FactSet.
To get there, Wedbush put a multiple of 30 times on forecast 2017 earnings, and then discounted those back at a rate of just 6%. It is hard to imagine more bullish assumptions, combining rapid growth with a risk profile Exxon Mobil would envy. Virtually all of the target value resides in that 2017 assumption. Tweak it slightly, to a multiple of 28 times and an 8% discount rate -- still very rosy assumptions -- and the value drops to about $205.
These Tesla valuations come amid an upgrade arms race. Wedbush's amounts to $7.1 billion of extra market value, bigger than the total market capitalization of dozens of S&P 500 companies. In the past month alone, there have been six target-price upgrades for Tesla, by an average of 30% each, according to FactSet.
The point isn't to poke fun at long-term assumptions that don't pan out -- they almost never do. There can be no denying Tesla's success to date and the plaudits its vehicles have garnered. But by 2023, everything from gasoline prices to the competing line-ups of bigger rivals, and much else in between, will have changed in ways it is impossible to imagine today.
With so many unforeseen and potentially treacherous twists on the road ahead, it is risky indeed to simply put the pedal to the metal and hope for the best.
Credit: By Liam Denning
Subject: Present value; Net present value; Investments; Valuation; Net losses; Discount rates; Expected values
Company / organization: Name: Citigroup Inc; NAICS: 551111; Name: Tesla Motors Inc; NAICS: 336999; Name: Morgan Stanley; NAICS: 523110, 523120, 523920
Classification: 9190: United States; 8680: Transportation equipment industry; 3100: Capital & debt management
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2013
Publication date: Oct 25, 2013
column: Heard on the Street
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1444824321
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1444824321?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Federal Regulators Say They Won't Probe Tesla Model S Fire; NHTSA Won't Investigate Early October Fire Caused By Road Debris
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Oct 2013: n/a.
ProQuest document link
Abstract:
"After reviewing all available data, the National Highway Traffic Safety Administration hasn't found evidence at this time that would indicate the recent battery fire involving a Tesla Model S was the result of a vehicle safety defect or noncompliance with federal safety standards," the agency said in a statement.
Full text: The National Highway Traffic Safety Administration said Thursday that it wouldn't investigate a Tesla Motors Inc. Model S that caught fire after hitting road debris earlier this month.
The safety agency couldn't investigate the fire from early October because of the government's shut down. Following the reopening of the government, administrator David Strickland said it would review the fire.
"After reviewing all available data, the National Highway Traffic Safety Administration hasn't found evidence at this time that would indicate the recent battery fire involving a Tesla Model S was the result of a vehicle safety defect or noncompliance with federal safety standards," the agency said in a statement.
Following the fire, which occurred outside of Seattle, Tesla Chief Executive Officer Elon Musk released a blog that detailed the company's response. He said in the post that the driver hit a metal scrap on the road that had bounced up and pierced the steel plate that protected the 1,000-pound battery pack under the car, leading to a fire.
The driver of the vehicle was warned by the vehicle to pull over and he got out and was uninjured.
Tesla's highflying share price took a hit after a video of the fire hit the Internet. The company's stock is trading down at $168.97, down 2.41% in midday Nasdaq trading today.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: Mike Ramsey
Subject: Traffic accidents & safety; Roads & highways
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Oct 25, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1444979438
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1444979438?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Bubble Trouble for Tesla
Author: Lahart, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Nov 2013: n/a.
ProQuest document link
Abstract:
Tesla trades at about 100 times expected earnings over the next 12 months, a valuation that can be justified only by extraordinarily optimistic assumptions about how many cars it will sell in the distant future (an exercise bullish analysts have performed to justify ever-higher price targets).
Full text: That hissing sound? It is the air coming out of Tesla Motors' shares.
The electric-car maker's stock fell 17% in October, registering its first monthly decline since February and the worst since 2010. Even so, it is up 372% this year, a performance that marks it out as a potential bubble.
"Bubble" is a word that needs to be treated with more care than it often is. Sometimes a stock rockets higher not because investors have become irrationally exuberant but because they have sniffed out a company's potential.
An example: In the giddy year of 1999, Qualcomm's stock rose 2,618%. Much of that move was, in retrospect, excessive, but not all of it. At its 2001 nadir, the stock was still 494% higher than it had been on the last day of 1998.
But Tesla shares exhibit two characteristics that behavioral-finance specialists have found are common in bubbles: Investors are paying an extremely high price for them, and they are trading them like crazy.
Tesla trades at about 100 times expected earnings over the next 12 months, a valuation that can be justified only by extraordinarily optimistic assumptions about how many cars it will sell in the distant future (an exercise bullish analysts have performed to justify ever-higher price targets). Yet, at a recent event in London, even Tesla Chief Executive Elon Musk reportedly said the company had "a higher valuation than we have any right to deserve."
Meanwhile, investors are flipping Tesla at a rapid-fire pace. Over the past 20 trading days, an average of 10 million Tesla shares, nearly one-tenth of its 121 million shares outstanding, have changed hands daily.
So Tesla's entire market capitalization now turns over in a bit more than two weeks. At the start of the year, it would have taken about 17 weeks of trading to turn over Tesla. It takes more than a year for International Business Machines' shares outstanding to do so.
Bubbles often have their roots in a fundamental success, and it is worth considering how well Tesla has done. Mr. Musk said he would build a high-performance electric sports car; he did. Next, he said he would sell a luxury car to broaden Tesla's appeal; he has done that, too. Anyone who bet against Tesla on the idea the company would fall short of those goals found it cost them dearly.
Early success, coupled with the high cost of shorting stocks--selling borrowed shares in hopes of buying them back more cheaply later--is one reason bubbles can get going. Shorting entails paying fees that going long doesn't, while potential losses if prices go the wrong way are much higher. So rather than betting against a highflying stock, many skeptics will stay away, effectively leaving trading to true believers.
But skeptics don't stay away forever, and on Tesla it seems they are starting to circle now. At a Heard on the Street conference last month, noted short seller James Chanos of Kynikos Associates criticized the lengths bullish analysts have gone in trying to justify Tesla's valuation. At a Chicago conference this week, Leon Cooperman, founder of hedge fund Omega Advisors, took a shot at Tesla's roughly $20 billion market capitalization: "I think we all know how that is going to end," he said.
Before shorts swoop in, Princeton University economists Markus Brunnermeier and Dilip Abreu have pointed out, the skeptics face a coordination problem. Individually, they don't have enough firepower to pop the bubble, so for fear of losing their shirts, they need to know others are on board. Something has to happen to give them the courage to step in.
The drop in Tesla's shares over the past month may have helped boost skeptics' confidence. But with the company set to report third-quarter results Tuesday, they may still be wary. If it doesn't wow Wall Street, that wariness will disappear.
For Tesla, it looks like a make or deflate quarter.
Write to Justin Lahart at
Credit: By Justin Lahart
Subject: Research & development--R & D; Acquisitions & mergers; Investments; Valuation
People: Musk, Elon
Company / organization: Name: Qualcomm Inc; NAICS: 511210, 334220; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Nov 1, 2013
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1447636289
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1447636289?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Bubble Trouble for Electric-Car Maker Tesla
Author: Lahart, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Nov 2013: n/a.
ProQuest document link
Abstract:
Tesla trades at about 100 times expected earnings over the next 12 months, a valuation that can be justified only by extraordinarily optimistic assumptions about how many cars it will sell in the distant future (an exercise bullish analysts have performed to justify ever-higher price targets).
Full text: That hissing sound? It is the air coming out of Tesla Motors' shares.
The electric-car maker's stock fell 17% in October, registering its first monthly decline since February and the worst since 2010. Even so, it is up 372% this year, a performance that marks it out as a potential bubble.
"Bubble" is a word that needs to be treated with more care than it often is. Sometimes a stock rockets higher not because investors have become irrationally exuberant but because they have sniffed out a company's potential.
An example: In the giddy year of 1999, Qualcomm's stock rose 2,618%. Much of that move was, in retrospect, excessive, but not all of it. At its 2001 nadir, the stock was still 494% higher than it had been on the last day of 1998.
But Tesla shares exhibit two characteristics that behavioral-finance specialists have found are common in bubbles: Investors are paying an extremely high price for them, and they are trading them like crazy.
Tesla trades at about 100 times expected earnings over the next 12 months, a valuation that can be justified only by extraordinarily optimistic assumptions about how many cars it will sell in the distant future (an exercise bullish analysts have performed to justify ever-higher price targets). Yet, at a recent event in London, even Tesla Chief Executive Elon Musk reportedly said the company had "a higher valuation than we have any right to deserve."
Meanwhile, investors are flipping Tesla at a rapid-fire pace. Over the past 20 trading days, an average of 10 million Tesla shares, nearly one-tenth of its 121 million shares outstanding, have changed hands daily.
So Tesla's entire market capitalization now turns over in a bit more than two weeks. At the start of the year, it would have taken about 17 weeks of trading to turn over Tesla. It takes more than a year for International Business Machines' shares outstanding to do so.
Bubbles often have their roots in a fundamental success, and it is worth considering how well Tesla has done. Mr. Musk said he would build a high-performance electric sports car; he did. Next, he said he would sell a luxury car to broaden Tesla's appeal; he has done that, too. Anyone who bet against Tesla on the idea the company would fall short of those goals found it cost them dearly.
Early success, coupled with the high cost of shorting stocks--selling borrowed shares in hopes of buying them back more cheaply later--is one reason bubbles can get going. Shorting entails paying fees that going long doesn't, while potential losses if prices go the wrong way are much higher. So rather than betting against a highflying stock, many skeptics will stay away, effectively leaving trading to true believers.
But skeptics don't stay away forever, and on Tesla it seems they are starting to circle now. At a Heard on the Street conference last month, noted short seller James Chanos of Kynikos Associates criticized the lengths bullish analysts have gone in trying to justify Tesla's valuation. At a Chicago conference this week, Leon Cooperman, founder of hedge fund Omega Advisors, took a shot at Tesla's roughly $20 billion market capitalization: "I think we all know how that is going to end," he said.
Before shorts swoop in, Princeton University economists Markus Brunnermeier and Dilip Abreu have pointed out, the skeptics face a coordination problem. Individually, they don't have enough firepower to pop the bubble, so for fear of losing their shirts, they need to know others are on board. Something has to happen to give them the courage to step in.
The drop in Tesla's shares over the past month may have helped boost skeptics' confidence. But with the company set to report third-quarter results Tuesday, they may still be wary. If it doesn't wow Wall Street, that wariness will disappear.
For Tesla, it looks like a make or deflate quarter.
Write to Justin Lahart at
Credit: By Justin Lahart
Subject: Research & development--R & D; Acquisitions & mergers; Investments; Valuation
People: Musk, Elon
Company / organization: Name: Qualcomm Inc; NAICS: 511210, 334220; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Nov 2, 2013
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1447739140
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1447739140?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
China's Tesla Risks Overcharging
Author: Bhattacharya, Abheek
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Nov 2013: n/a.
ProQuest document link
Abstract:
Chinese electric-car maker BYD--backed by a major investment from Warren Buffett--has seen its Hong Kong-listed shares soar 153% in the past year, even as Chinese auto stocks are up 66%.
Full text: Tesla Motors isn't the only stock exciting investors about the future of electric cars. Chinese electric-car maker BYD--backed by a major investment from Warren Buffett--has seen its Hong Kong-listed shares soar 153% in the past year, even as Chinese auto stocks are up 66%. This charge could be set to power down.
Investors have gotten excited about BYD thanks both to Tesla's meteoric rise, and because China's central government said in September that it would help cities add new electric cars and subsidize new buyers over the next two years.
The problem is not only that investors are assuming the technology will commercially succeed. That's an issue with Tesla, too, as it looks to sell ever larger numbers of cars. With BYD, investors are also assuming that this sprawling company is focused enough to sell a meaningful number of electric cars.
But, unlike Tesla, half the company isn't even car-related. BYD gets 47% of its revenue from making handset components, solar cells and rechargeable batteries. And those are highly competitive businesses that are hardly profitable. BYD's auto business doesn't buzz either, having lost market share three years running, according to LMC Automotive.
Despite BYD's reputation for expertise in battery technology, less than 1% of the cars it sells are electric. BYD's electric cars trailed behind Chery and Jianghuai Auto in terms of electric vehicle sales in 2012, says Macquarie's Janet Lewis.
This means BYD may not be the biggest beneficiary of an electric-car boom. Its gasoline-powered models, which make up the bulk of sales, are low-end, and for now aren't selling enough to justify BYD's lofty stock price.
That leaves much of the company's future success reliant on continued state largess. The main buyers of electric vehicles are local governments who use them for taxi fleets and other public uses. Government subsidies for items such as research and development were 57% of pretax profit for the first nine of months of 2013. Strip out nonrecurring income such as subsidies, and net profit fell 123% year-over-year between January and September, says Ms. Lewis.
But hope seems to spring eternal for electric-car investors. BYD trades at 53 times forward earnings. Granted, that is less than the 100-times multiple Tesla fetches. But BYD's valuation is four times the second-richest Hong Kong-listed auto maker, Brilliance China Auto, and nearly double its own five-year average, according to FactSet.
Tesla's valuation and heady share-price rise this year raise questions about the U.S. company, but at least that's a pure bet on a single polarizing question--will electric cars prove a commercial success? With BYD, investors are betting on too many other things also falling into place.
Write to Abheek Bhattacharya at
Credit: By Abheek Bhattacharya
Subject: Electric vehicles; Automobile industry; Corporate profits; Subsidies; Investments
Location: China Hong Kong
People: Lewis, Janet Buffett, Warren
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Nov 4, 2013
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1448120023
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1448120023?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Don't Be Shocked if Tesla Beats Forecasts; Third-Quarter Results Will Give Investors a Chance to Focus Once Again on Fundamentals
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Nov 2013: n/a.
ProQuest document link
Abstract:
A big variable in Tesla's performance is payments it receives from other auto makers unable to meet targets California imposes for zero-emissions vehicles.
Full text: It is time for the electrically driven rubber to hit the road.
Plenty of ink has been spilled about whether Tesla Motors Inc.'s shares are in a bubble. Its third-quarter results, due Tuesday, will give investors a chance to step back from that debate and focus once again on fundamentals.
Circumstantial evidence points to surprisingly good revenue. For example, while management said in early August that it expected "slightly over 5,000" cars to be sold during the quarter, amateur Tesla-watchers tracking the issuance of vehicle-identification numbers think it could be far more.
Acknowledging such techniques' unreliability, analysts nevertheless have lifted earnings expectations. Before second-quarter results were released in August, analysts saw a slight loss for the third quarter. They raised this to a two-cent profit after that report and to eight cents recently. On an unadjusted basis, Tesla is seen losing nine cents, compared with a loss of $1.05 a year earlier, according to FactSet.
A big variable in Tesla's performance is payments it receives from other auto makers unable to meet targets California imposes for zero-emissions vehicles. Those are dropping just as more production volume is sending margins higher.
Analysts at Barclays think gross margins without regulatory payments rose to 19.4% in the third quarter, from 14.8% in the second quarter. Including the payments, they are seen declining slightly to 22.8%.
That all bodes well, but the lion's share of Tesla's $20 billion market value depends on future sales of more affordable models beyond today's high-end luxury Model S and planned Model X. The existing lineup, and an entry-level luxury offering slated for 2016-2017, comprises all of Tesla's future earnings that can be reliably projected. Beyond that, margins and volumes are hypothetical.
Even if Tesla confounds skeptics with its luxury models, that will barely move the needle in terms of its expected future earnings. The real payoff lies years in the future and will involve taking meaningful share from major auto makers.
The reason to possibly get excited about a good quarter today isn't the bottom line--it is to gauge Tesla's ability to deliver on those long-term ambitions. But the odds of success are much lower than the company's value implies, no matter if it soars over a low quarterly sales hurdle.
Write to Spencer Jakab at
Credit: By Spencer Jakab
Subject: Automobile industry
Location: California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Nov 4, 2013
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1448275886
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1448275886?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Posts Loss as Output Climbs; Luxury Electric Car Maker Delivered 5,500 Vehicles Last Quarter
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Nov 2013: n/a.
ProQuest document link
Abstract:
Electric car maker Tesla Motors Inc. reported a narrower third quarter net loss of $38 million, and said it plans to expand production of its Model S sedans to meet rising demand in the U.S. and overseas.
Full text: Electric car maker Tesla Motors Inc. reported a narrower third quarter net loss of $38 million, and said it plans to expand production of its Model S sedans to meet rising demand in the U.S. and overseas.
The Palo Alto, Calif., company said it delivered 5,500 Model S electric cars in the three months ended Sept. 30, including 1,000 in Europe, the company said. In a letter to shareholders, Tesla Chief Executive Officer Elon Musk said the luxury auto maker plans to "increase production over the next several quarters" from the current rate of 550 cars per week.
Tesla revenues shot up to $431 million from $50 million a year ago when the $70,000 and up Model S was just starting deliveries.
The company said it generated positive free cash flow of $26 million and ended the quarter with $796 million in cash.
On an operating basis, Tesla lost $30.56 million. It year-ago net loss was $110.8 million, or $1.05 a share.
Tesla's gross margin, the profit after the costs of making its products, was 24%. The company has been aiming to get to a 25% gross margin by year-end.
Tesla said it received $10 million from pollution credits sold to other auto makers, down from $51 million in the second quarter. It plans to deliver about 6,000 vehicles in the fourth quarter and begin deliveries in China in the first quarter of next year.
Tesla said that excluding the costs of stock-based compensation, accounting for Model S leases and "non-cash interest expense" the company had an adjusted income of $16 million, or 12 cents a share, in the third quarter, beating Wall Street estimates, which were based on that adjusted figure.
Credit: By Mike Ramsey
Subject: Net losses; Automobile industry; Financial performance
Location: United States--US Europe Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Nov 5, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1448528202
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1448528202?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Posts Loss as Output Climbs; Luxury Electric Car Maker Delivered 5,500 Vehicles Last Quarter
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Nov 2013: n/a.
ProQuest document link
Abstract:
Mr. Musk said the company is production constrained primarily because of a lack of battery cells for its battery-powered Model S. He said he expects the company's battery supply to improve next year as a result of a new agreement with Panasonic Corp. Mr. Musk said that when Tesla begins building in late 2016 or 2017 its mass-market electric vehicle, current production capacity for the lithium-ion batteries won't be adequate.
Full text: Tesla Motors Inc. reported a narrower third quarter net loss on higher production but its shares fell sharply in after-hours trading as investors worried the luxury electric car maker's outlook for revenue and profit fell short.
The Palo Alto, Calif., company said it delivered 5,500 of its $70,000 and up Model S electric cars in the three months ended Sept. 30, including 1,000 vehicles shipped to Europe. That was more than the company had projected earlier but below the whisper number of as many as 7,000 cars.
Tesla's shares fell 12% in after hours trading on Tuesday after the company told investors to expect fourth quarter adjusted profit would be similar to the third quarter. Excluding stock-based compensation costs and accounting for Model S leases and "noncash interest expense," the company said it had adjusted income of $16 million, or 12 cents a share, in the quarter.
Shares gained $1.61 to $176.81 in 4 p.m. trading on the Nasdaq Stock Market before the release of quarterly results.
Chief Executive Officer Elon Musk said the company would continue to increase production over the next several quarters from its current rate of about 550 cars a week. Tesla forecast production of about 6,000 Model S sedans in the current quarter.
Mr. Musk said the company is production constrained primarily because of a lack of battery cells for its battery-powered Model S. He said he expects the company's battery supply to improve next year as a result of a new agreement with Panasonic Corp.
Mr. Musk said that when Tesla begins building in late 2016 or 2017 its mass-market electric vehicle, current production capacity for the lithium-ion batteries won't be adequate. The company is exploring building a battery plant with partners, most likely in North America, he said on a conference call.
"There will need to be incremental production capacity that doesn't exist in the world today," Mr. Musk said. "There will need to be some kind of giga factory build."
Mr. Musk described the proposed battery factory as one that could take raw materials in at one end, and ship finished battery packs from the other end, evoking a lithium-ion battery equivalent of Ford Motor Co.'s Rouge complex that early in the 20th century took in iron ore and rolled out finished Model Ts.
The company posted a net loss of $38 million, or 32 cents a share, down from a loss of $110 million, or $1.05 a share, a year earlier. Revenue rose eightfold to $431 million from $50 million a year ago when the Model S was just starting to be delivered. Compared with the second quarter, Tesla's revenue was up 6%.
On an operating basis, Tesla lost $30.6 million.
Tesla's gross margin, the profit after product costs, was 24%. The company aims to get to a 25% gross margin by year-end.
Tesla began a leasing program this year under which some revenue is deferred. Tesla said that if it took credit for the total revenue expected from each lease transaction, it would have had revenues of $602 million in the last quarter. Customers leased about half of the Model S sedans delivered in the period, the company said.
The company said it generated record free cash flow of $26 million and ended the quarter with $796 million in cash. It forecast fourth-quarter free cash flow would be about break even.
Tesla said it received $10 million from pollution credits sold to other auto makers during the quarter, down from $51 million in the second quarter.
It plans to deliver about 6,000 vehicles in the fourth quarter and begin deliveries to customers in China in the first quarter of next year.
Write to Mike Ramsey at
Credit: By Mike Ramsey
Subject: Net losses; Automobile industry; Production capacity; Investments
Location: Europe Palo Alto California
Company / organization: Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Panasonic Corp; NAICS: 335222, 335224, 333415; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Nov 6, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1448548472
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1448548472?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Corporate News: Tesla Stock Skids on Outlook
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 Nov 2013: B.2.
ProQuest document link
Abstract:
Mr. Musk said the company is production constrained primarily because of a lack of battery cells for its battery-powered Model S. He said he expects the company's battery supply to improve next year as a result of a new agreement with Panasonic Corp. Mr. Musk said that when Tesla begins building in late 2016 or 2017 its mass-market electric vehicle, current production capacity for the lithium-ion batteries won't be adequate.
Full text: Tesla Motors Inc. reported a narrower quarterly loss on sharply higher production but its shares fell in after-hours trading as investors worried the luxury electric car maker's outlook for revenue and profit fell short.
The Palo Alto, Calif., company said it delivered 5,500 of its $70,000 and up Model S electric cars in the three months ended Sept. 30, including 1,000 vehicles shipped to Europe. That was more than the company had projected earlier but some analysts were expecting it to ship as many as 7,000 cars.
Tesla's volatile shares fell 12% to $154.88 in after-hours trading on Tuesday after the company told investors to expect fourth-quarter adjusted profit would be similar to the third quarter.
The shares had gained $1.61 to $176.81 in 4 p.m. trading on the Nasdaq Stock Market before the release of quarterly results. Tesla stock had gained 422% as of Tuesday's close so far this year.
Chief Executive Officer Elon Musk said the company would continue to increase production over the next several quarters from its current rate of about 550 cars a week. Tesla forecast production of about 6,000 Model S sedans in the current quarter.
Mr. Musk said the company is production constrained primarily because of a lack of battery cells for its battery-powered Model S. He said he expects the company's battery supply to improve next year as a result of a new agreement with Panasonic Corp.
Mr. Musk said that when Tesla begins building in late 2016 or 2017 its mass-market electric vehicle, current production capacity for the lithium-ion batteries won't be adequate. The company is exploring building a battery plant with partners, most likely in North America, he said on a conference call.
"There will need to be incremental production capacity that doesn't exist in the world today," Mr. Musk said. "There will need to be some kind of giga factory build."
Mr. Musk described the proposed battery factory as one that could take raw materials in at one end, and ship finished battery packs from the other end, evoking a lithium-ion battery equivalent of Ford Motor Co.'s Rouge complex that early in the 20th century took in iron ore and rolled out finished Model Ts.
The company posted a net loss of $38 million, or 32 cents a share, down from a loss of $110 million, or $1.05 a share, a year earlier. On an operating basis, Tesla lost $30.6 million.
Revenue rose eightfold to $431 million from $50 million a year ago when the Model S was just starting to be delivered. Compared with the second quarter, Tesla's revenue was up 6%.
Excluding stock-based compensation costs and accounting for Model S leases and "noncash interest expense," the company said it had adjusted income of $16 million in the quarter.
Tesla's gross margin, the profit after product costs, was 24%. The company aims to get to a 25% gross margin by year-end.
Tesla began a leasing program this year under which some revenue is deferred. Tesla said that if it took credit for the total revenue expected from each lease transaction, it would have had revenues of $602 million in the last quarter. Customers leased about half of the Model S sedans delivered in the period, the company said.
The company said it generated free cash flow of $26 million and ended the quarter with $796 million in cash. It forecast fourth-quarter free cash flow would be about break even.
Tesla said it received $10 million from pollution credits sold to other auto makers during the quarter, down from $51 million in the second quarter.
It plans to deliver about 6,000 vehicles in the fourth quarter and begin deliveries to customers in China in the first quarter of next year.
Credit: By Mike Ramsey
Subject: Net losses; Automobile industry; Production capacity; Investments
Location: Europe Palo Alto California
Company / organization: Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Panasonic Corp; NAICS: 335222, 335224, 333415; Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2013
Publication date: Nov 6, 2013
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1448692482
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1448692482?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Gets a Flat; The Shares' Sharp Drop Had Less to Do With the Company's Results Than a Tempering of Investors' Overoptimistic Assumptions of What It Can Achieve
Author: Lahart, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Nov 2013: n/a.
ProQuest document link
Abstract:
[...]in its valuation model, it also raised the discount rate (which accounts for the time value of money and risks involved) that it is applying to those 2017 earnings to 10% from 6%.
Full text: There isn't any problem with the results Tesla Motors reported late Tuesday. The problem is the company's stock price.
Tesla fared better in the third quarter than estimates suggested it would. Its loss narrowed, and the adjusted earnings per share that most analysts use as a yardstick came in better than expected. It delivered about 5,500 cars, more than the 5,000 it had projected and far more than the roughly 250 it delivered a year earlier. What's not to like?
Plenty, to judge by the sharp drop in Tesla shares Wednesday.
The easy answer to why that happened is that although Tesla's results beat analysts' overall estimates, they didn't meet the bullish expectations of investors. Some amateur sleuths tracking Tesla vehicle-identification numbers, for example, thought the company delivered thousands more cars in the third quarter than it actually did.
Even so, it is hard to see why not meeting such Panglossian hopes should hurt Tesla's stock so much.
The deeper problem is that Tesla's rich share price can only be justified on a view that many years from now the company will be profitably selling far more cars than it does now. Just as jiggling a telescope pointed at Jupiter a degree to the right can send you eight million miles clear of the mark, little shifts in Tesla's assumed trajectory can create big swings in its implied value.
Changes in assumptions about the risks of Tesla staying on its trajectory matter, too. Wedbush Securities on Wednesday only slightly lowered its forecast for what Tesla will earn in 2017, to $10 a share from $10.10. But in its valuation model, it also raised the discount rate (which accounts for the time value of money and risks involved) that it is applying to those 2017 earnings to 10% from 6%. That pushed its 12-month price target on Tesla shares to $205 from $245--a $4.2 billion haircut to its expected market value for the company.
Even after Wednesday's drop, Tesla trades at more than 100 times expected earnings over the next year. If Tesla proves itself to be worth half of its current share price, it will have been a phenomenal American success story.
Write to Justin Lahart at
Credit: By Justin Lahart
Subject: Earnings per share; Financial performance; Stock prices
Company / organization: Name: Wedbush Securities; NAICS: 523110, 523120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Nov 6, 2013
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1448868232
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1448868232?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Motors Looking Into Model S Fire in Tennessee
Author: White, Joseph B
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Nov 2013: n/a.
ProQuest document link
Abstract:
Anxiety about the fire risks of lithium-ion batteries such as those used to power the Model S have been fueled by reports of fires involving laptop computers and a rash of incidents earlier this year involving the lithium-ion batteries installed in Boeing 787 Dreamliner aircraft.
Full text: Tesla Motors Inc. said Thursday it is investigating a fire in one of its Model S sedans that occurred in Tennessee earlier this week. The fire is the third reported within a month involving one of the $70,000 electric cars.
Images of a burning Model S on the side of a Tennessee highway were posted to the Tesla Motors Club website and other websites on Wednesday.
Federal vehicle safety regulators "will contact the local authorities who are looking into the incident to determine if there are vehicle safety implications that merit agency action," the National Highway Traffic Safety Administration said Thursday.
In a statement, Tesla spokeswoman Liz Jarvis-Shean said: "We have been in contact with the driver, who was not injured and believes the car saved his life. Our team is on its way to Tennessee to learn more about what happened in the accident. We will provide more information when we're able to do so."
NHTSA declined last month to investigate a Model S fire that occurred after an accident near Seattle in which a piece of metal punctured the car's lithium-ion battery pack. The agency said it didn't find evidence that the Seattle fire was the result of a vehicle safety defect.
That incident caused a brief swoon in Tesla's stock price.
Tesla shares sold off again Wednesday after the company announced a third-quarter net loss of $38 million and disappointed some investors with its forecast for the current quarter. The company's share price is still more than four times its level a year ago.
Tesla also confirmed last month that a Model S sedan caught fire after a crash in Mexico.
Tesla Chief Executive Officer Elon Musk defended the safety of the Model S battery design in a blog post following the Seattle incident, noting that there are about 150,000 fires a year involving petroleum-fueled vehicles. Anxiety about the fire risks of lithium-ion batteries such as those used to power the Model S have been fueled by reports of fires involving laptop computers and a rash of incidents earlier this year involving the lithium-ion batteries installed in Boeing 787 Dreamliner aircraft.
Write to Joseph B. White at
Credit: By Joseph B. White
Subject: Lithium; Batteries
Location: Tennessee
People: Musk, Elon
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Tesla Motors Inc; NAICS: 336999
Product name: Boeing 787
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Nov 7, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1449138477
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1449138477?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Safety Agency Launches Investigation Into Tesla Fires; Over a Five-Week Period, Two Model S Sedans Burned After Hitting Large Pieces of Metal
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Nov 2013: n/a.
ProQuest document link
Abstract:
The National Highway Traffic Safety Administration said it would launch a formal investigation into recent fires that destroyed two Tesla Motors Inc. Model S electric cars that had run over metal debris.
Full text: The National Highway Traffic Safety Administration said it would launch a formal investigation into recent fires that destroyed two Tesla Motors Inc. Model S electric cars that had run over metal debris.
"The agency's investigation was prompted by recent incidents in Washington state and Tennessee that resulted in battery fires due to undercarriage strikes with roadway debris," the agency said in a statement. The probe would determine whether the vehicle has a defect that makes it dangerous to operate and could result in a recall and remedy.
Over a five-week period, two Model S sedans burned after hitting large pieces of metal on the highway in the U.S. Neither driver was injured. NHTSA declined to open an investigation after the first incident. There was a third fire in Mexico reported after a high-speed crash.
On Tuesday, the Palo Alto, Calif., luxury auto maker's shares rose 3.7% to $126.09 in 4 p.m. trading on the Nasdaq Stock Market. The stock has taken a beating since it hit a record high on Sept. 30 of $193.37, falling more than 35% in total to Monday's close of $121.58.
The shares fell after an Internet video of the first fire circulated, recovered a bit then fell sharply after the company released a tepid outlook for fourth quarter revenue and profit. The stock was off 15% a day after a fourth quarter forecast that wasn't as good as some analysts had expected.
Tesla Chief Executive Elon Musk, writing in a blog on the company's website, disclosed Tesla would now cover fire damage as part of its vehicle warranty, even if an accident was the driver's fault. Tesla plans software updates that will adjust the height of the Model S at highway speeds so it is less likely to be damaged when running over roadway debris.
"To be clear, this is about reducing the chances of underbody impact damage, not improving safety. The theoretical probability of a fire injury is already vanishingly small and the actual number to date is zero," Mr. Musk said.
Mr. Musk also wrote that Tesla requested the safety agency to conduct the investigation and hit at what he described as "an onslaught of popular and financial media seeking to make a sensation out of something that a simple Google search would reveal to be false" regarding Model S safety relative to gasoline-fueled vehicles.
The safety agency said its probe wasn't in response to Tesla. "NHTSA's decision to open any formal investigation is an independent process. In regards to Tesla, the agency notified the auto maker of its plans to open a formal investigation and requested their cooperation, which is standard agency practice for all investigations. The auto maker agreed to do so," the agency said in a statement.
Mr. Musk said no one has been seriously injured in any accident in a Model S and that it received the highest score possible in crash tests performed by the safety agency "showing clearly that the Model S is safer in an accident than any other vehicle without exception. It is literally impossible for another car to have a better safety track record, as it would have to possess mystical powers of healing."
Last week at conferences in New York, Mr. Musk said that Tesla wouldn't recall the Model S. "There's definitely not going to be a recall. There's no reason for a recall, I believe."
Nissan Motor Co. and General Motors Co. said they have no reported fires following an accident with their respective Nissan Leaf and Chevrolet Volt. Both have sold more than 50,000 vehicles since they first went on sale. A Volt did catch fire several weeks after a wreck because its battery wasn't powered down properly.
Tesla rode a wave of enthusiasm from February through September as the company successfully ramped up production of its $70,000 electric car. The sleek, sporty Model S garnered awards and drew strong demand. Tesla has delivered about 19,000 of the vehicles in total so far and investors pushed up the value of its shares so high that its market value eclipsed larger companies including Fiat SpA, the majority owner of Chrysler Group LLC.
Credit: Mike Ramsey
Subject: Automobile industry; Internet stocks
Location: Tennessee
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Google Inc; NAICS: 519130
Product name: Chevrolet Volt
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Nov 19, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1459382098
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1459382098?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla's Real Burning Issue
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Nov 2013: n/a.
ProQuest document link
Abstract:
Wall Street financial models of Tesla tend to ascribe about 90% of the company's value to cash flows forecast beyond the end of this decade.
Full text: Elon Musk's attempt on Tuesday to extinguish the controversy around flaming Teslas was well-reasoned. But the chief executive's blog post on Tesla Motors' website also flecked, perhaps unintentionally, at the dangers for the company's still-lofty valuation.
Sitting in and operating complex machinery carrying its own fuel--what you do every time you drive a car--necessarily carries a safety risk. Mr. Musk rightly points out that three nonfatal fires don't come anywhere close to making Teslas exceptionally hazardous relative to traditional vehicles.
But as he wrote, "If a false perception about the safety of electric cars is allowed to linger," it risks discouraging consumers from making the jump from traditional vehicles.
Therein lies the problem for investors, who bid Tesla's stock back up about 4% Tuesday, having seen it slide by more than a third since the start of October. Despite the recent drop, the stock still is up more than threefold since the end of March and trades at 79 times estimated 2014 earnings.
That leaves little margin for error. As James Albertine, analyst at Stifel Nicolaus puts it, when you are a single-market manufacturer trading at such high multiples, "you have to be perfect."
Fires might garner the most hits on YouTube. But their real significance for investors is as a reminder that, given enough time and complexity, stuff tends to go wrong. Wall Street financial models of Tesla tend to ascribe about 90% of the company's value to cash flows forecast beyond the end of this decade.
And Tesla has to achieve a great deal to expand into that valuation. These range from persuading many more drivers relatively quickly to switch to electric vehicles--something that those YouTube videos don't help with, however unfairly--to fending off the challenge of an increasing range of competing electric and hybrid vehicles.
Doing all this will require huge investment in manufacturing and marketing, and will likely entail its fair share of mistakes and setbacks. Tesla's cars look safe enough. The stock still doesn't.
Write to Liam Denning at
Credit: By Liam Denning
Subject: Investments; Research & development--R & D
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Nov 19, 2013
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1459434569
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1459434569?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Corporate News: U.S. Probes Tesla Fires --- CEO Musk Defends Safety Record, Plans to Raise Model S's Ground Clearance
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Nov 2013: B.3.
ProQuest document link
Abstract:
The National Highway Traffic Safety Administration said it would launch a formal investigation into recent fires that destroyed two Tesla Motors Inc. Model S electric cars that had run over metal debris.
Full text: The National Highway Traffic Safety Administration said it would launch a formal investigation into recent fires that destroyed two Tesla Motors Inc. Model S electric cars that had run over metal debris.
"The agency's investigation was prompted by recent incidents in Washington state and Tennessee that resulted in battery fires due to undercarriage strikes with roadway debris," the agency said in a statement. The probe would determine whether the vehicle has a defect that makes it dangerous to operate and could result in a recall and remedy.
Over a five-week period, two Model S sedans burned after hitting large pieces of metal on the highway in the U.S. Neither driver was injured. NHTSA declined to open an investigation after the first incident. There was a third fire in Mexico reported after a high-speed crash.
On Tuesday, the Palo Alto, Calif., luxury auto maker's shares rose 3.7% to $126.09 in 4 p.m. trading on the Nasdaq Stock Market. The stock has taken a beating since it hit a record high on Sept. 30 of $193.37, falling more than 35% in total to Monday's close of $121.58.
The shares fell after an Internet video of the first fire circulated, recovered a bit then fell sharply after the company released a tepid outlook for fourth quarter revenue and profit. The stock was off 15% a day after a fourth quarter forecast that wasn't as good as some analysts had expected.
Tesla Chief Executive Elon Musk, writing in a blog on the company's website, disclosed Tesla would now cover fire damage as part of its vehicle warranty, even if an accident was the driver's fault. Tesla plans software updates that will adjust the height of the Model S at highway speeds so it is less likely to be damaged when running over roadway debris.
"To be clear, this is about reducing the chances of underbody impact damage, not improving safety. The theoretical probability of a fire injury is already vanishingly small and the actual number to date is zero," Mr. Musk said.
Mr. Musk also wrote that Tesla requested the safety agency to conduct the investigation and hit at what he described as "an onslaught of popular and financial media seeking to make a sensation out of something that a simple Google search would reveal to be false" regarding Model S safety relative to gasoline-fueled vehicles.
The safety agency said its probe wasn't in response to Tesla. "NHTSA's decision to open any formal investigation is an independent process. In regards to Tesla, the agency notified the auto maker of its plans to open a formal investigation and requested their cooperation, which is standard agency practice for all investigations. The auto maker agreed to do so," the agency said in a statement.
Mr. Musk said no one has been seriously injured in any accident in a Model S and that it received the highest score possible in crash tests performed by the safety agency "showing clearly that the Model S is safer in an accident than any other vehicle without exception. It is literally impossible for another car to have a better safety track record, as it would have to possess mystical powers of healing."
Last week at conferences in New York, Mr. Musk said that Tesla wouldn't recall the Model S.
Nissan Motor Co. and General Motors Co. said they have no reported fires following an accident with their respective Nissan Leaf and Chevrolet Volt. Both have sold more than 50,000 vehicles since they first went on sale. A Volt did catch fire several weeks after a wreck because its battery wasn't powered down properly.
Tesla rode a wave of enthusiasm from February through September as the company successfully ramped up production of its $70,000 electric car. The sleek, sporty Model S garnered awards and drew strong demand. Tesla has delivered about 19,000 of the vehicles in total so far and investors pushed up the value of its shares so high that its market value eclipsed larger companies including Fiat SpA, the majority owner of Chrysler Group LLC.
Credit: By Mike Ramsey
Subject: Automobile industry; Investigations; Fires; Electric vehicles
Location: United States--US
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2013
Publication date: Nov 20, 2013
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1459536322
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1459536322?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
BMW, Cadillac Aim to Pull Plug on Tesla With Pricey New Cars
Author: White, Joseph B
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Nov 2013: n/a.
ProQuest document link
Abstract:
[...]there is also consumer demand, Mr. Robertson says. Since BMW began offering test drives in the i3, about 100,000 people have signed up world-wide, including about 45,000 in the U.S., Mr. Robertson said.
Full text: LOS ANGELES--Tesla Motors Inc. is about to get deep pocketed rivals in the luxury electric luxury car market after largely having the business to itself since the 2012 launch of the Model S sedan.
BMW AG, General Motors Co.'s Cadillac and Volkswagen AG's Porsche and Audi brands are among the luxury brands using this week's Los Angeles Auto Show to promote new plug-in models aimed at affluent, eco-conscious Californians who make up the heart of Tesla's buyers.
While models such as the BMW i3 and i8, the Cadillac ELR or Porsche's plug-in Panamera sedan offer different propulsion technology from the Tesla Model S and different body styles, they are all cars that get much of their energy from the electric grid instead of a gasoline pump.
So far, electric cars aimed at mass market consumers have sold in relatively low volumes, although the head of Nissan Motor Co.'s U.S. sales arm said Tuesday that demand for the Nissan Leaf electric car has improved enough to justify adding production capacity. Still, electric cars have made up about 1% of U.S. light vehicle sales this year.
One reason electric cars are a tough sell to budget-conscious consumers is the high cost of lithium-ion batteries, and the limited driving range of cars like the Leaf. However, Tesla so far can't keep up with demand for its $70,000 and up Model S with an 85 kilowatt-hour battery, which has a driving range rated at 265 miles by the federal government.
Wealthy car buyers "can afford to have another vehicle" to deal with long road trips, says Devin Lindsay, an analyst with forecasting company IHS Inc. As more auto makers follow Tesla's move to make electric cars a luxury lifestyle accessory, "buyers are going to have a lot of choice," Mr. Lindsay says.
Established luxury brands are muscling on to Tesla's turf in part because government policies are forcing them to, and in part because they see Mr. Musk peeling away influential trend setters they don't want to lose.
"If you look at Audi buyers, they are interested in high tech, they are young, progressive and affluent," says Scott Keogh, head of Audi's U.S. arm. That is why Audi is promoting the A3 etron plug-in hybrid model at the Los Angeles show, ahead of its early 2015 launch.
Audi eventually will have an all-electric model, Mr. Keogh says, though he won't say when. Rudolf Krebs, the VW Group executive Vice President in charge of electric vehicle programs said Audi will get plug in hybrid versions of its A6, Q7 and A8 models next year as part of a broader VW Group strategy to roll out 40 plugin hybrid or battery electric models over the next several years.
GM's ELR is a luxury model that borrows its basic propulsion system from the plug-in Chevrolet Volt but at about $76,000 has a starting price more than $30,000 higher. Mark Reuss, head of GM's North American operations, says the ELR "will inevitably be compared to the Model S," but GM will focus on its combination of a gasoline-fueled engine and battery power that gives it a longer driving range than a Tesla.
"It's a dramatic design statement," Mr. Reuss says. "Which Cadillac really needs right now."
BMW is highlighting the i8 plug-in hybrid sports car at the LA show, The car, with a starting price above $135,000, has a carbon fiber body architecture and is propelled by electric motors in the front, and a three-cylinder gasoline engine in the back. BMW is also launching early next year a second electric model, the BMW i3, which is a small "city car" that will start at about $40,000 in the U.S.
"California plays a pivotal role in this technology," says Ian Robertson, BMW's global sales and marketing chief. The state's mandates requiring auto makers to sell more electric or plug-in vehicles are a major factor in auto makers' decisions to launch such vehicles. But there is also consumer demand, Mr. Robertson says.
Since BMW began offering test drives in the i3, about 100,000 people have signed up world-wide, including about 45,000 in the U.S., Mr. Robertson said. As for the i8, he said, "we are sold out for the whole of next year."
What impact the arrival over the next year of new luxury plug-ins will have on Tesla will depend a lot on whether the new entries expand the segment, or merely cut more slices from a same-sized pie.
Tesla Chief Executive Elon Musk has assured analysts he isn't concerned. Tesla didn't have a display at the LA Auto Show this year, a spokeswoman said. Mr. Musk has said the company doesn't need to try to generate more demand right now.
"I think there's a huge amount of untapped demand in North America," he said, regarding his company's outlook. Mr. Musk has said he expects Tesla can eventually sell 500,000 cars a year.
"I really do encourage other manufacturers to bring electric cars to market," Mr. Musk told analysts in a conference call earlier this year. "They need to bring it to market and then keep innovating and improving and making better and better electric cars."
Write to Joseph B. White at
Credit: By Joseph B. White
Subject: Electric vehicles; Automobile industry; Affluence; Production capacity; Automobile sales
Location: California United States--US
Company / organization: Name: Nissan Motor Co Ltd; NAICS: 336111; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Tesla Motors Inc; NAICS: 336999
Product name: Chevrolet Volt
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Nov 20, 2013
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1459819606
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1459819606?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Meets the Auto Regulators; The feds have opened a safety investigation into the Model S fires. Elon Musk should be worried.
Author: Jenkins, Holman W; Jr.
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Nov 2013: n/a.
ProQuest document link
Abstract:
At a congressional hearing on the robotic car last week, a GM executive pleaded for "protection for auto makers and dealers from frivolous litigation for systems that meet and surpass whatever performance standards are established by the government."
Full text: Look out, Elon Musk. Expecting rational results from regulatory agencies is often a recipe for disappointment.
Two of Mr. Musk's Tesla Model S cars burned up when road debris punctured the battery, a vulnerability not seen in other electric cars. Mr. Musk says his cars are no more fire-prone than gasoline cars. He claims to welcome a National Highway Safety Administration investigation into whether the cars are defective and warrant a recall.
Good luck with that. Mr. Musk is embroiled in a process that, he may soon discover, can quickly become more about politics than engineering. GM pickups with side-mounted gas tanks in the 1980s were necessarily more fire-prone in side collisions. Yet the truck's overall safety record was exemplary and the vehicle fully complied with federal fuel-system safety standards. That didn't stop the feds from eventually ruling the trucks defective, in response to over-the-top media and interest-group allegations against the company.
Bloomberg Elon Musk, CEO of Tesla Motors Inc..
Those nearing ecstasy over the driverless car ought to sober up too. Tesla is not the only example of how unwelcoming our system of auto regulation is to new ideas. At a congressional hearing on the robotic car last week, a GM executive pleaded for "protection for auto makers and dealers from frivolous litigation for systems that meet and surpass whatever performance standards are established by the government." NHTSA's David Strickland was also present and seemed a lot more interested in extending his agency's remit to "things like, you know, navigation on an iPhone. . . . That is a piece of motor vehicle equipment and I think we have a very strong precedent."
And recall NHTSA's performance during the furor almost four years ago over alleged runaway Toyotas. Its then-overseer, Transportation Secretary Ray LaHood, happily participated in congressional hearings designed to flog for the benefit of trial lawyers the idea of a hidden bug in Toyota's electronic throttle control.
When the agency much more quietly came out with a report a year later debunking the idea of an electronic defect, notice how little good it did Toyota. The car maker still found it necessary to cough up $1.2 billion to satisfy owners who claimed their cars lost value in the media frenzy over a non-defect. Toyota has also seen the tide turning against it lately as it resists a deluge of accident claims.
At first, opposing lawyers were hesitant to emphasize an invisible defect that government research suggested didn't exist. That was a tactical error on their part. In an Oklahoma trial last month involving an 82-year-old woman driver, jurors awarded $3 million in compensatory damages and were ready to assign punitive damages in a complaint focused on a hypothetical bug when Toyota abruptly settled on undisclosed terms.
In another closely-watched trial set to begin in California in March, an 83-year-old female driver (who has since died from unrelated causes) testified in a deposition that she stepped on the brake instead of the gas. The judge has already ruled that if the jury decides to believe her testimony, it is entitled to infer the existence of a defect that nobody can find.
These cases, out of some 300 pending, were chosen for a reason. Study after study, including one last year by the University of North Carolina Highway Safety Research Center, finds that elderly female drivers are inordinately prone to "pedal misapplication." If Toyota can't prevail in these cases, the company might be wise to run up the white flag and seek a global settlement that some estimate at upwards of $5 billion--quite a sum for a non-defect.
Why do we mention this? These episodes describe the regulatory-cum-political thicket that Tesla wandered into when it started making cars. This thicket has served as a barrier to entry to startup car makers for the better part of a century.
Even more so because Tesla's troubles come at a time when much bigger companies, with vast lobbying and political resources, are entering the market for high-end electric cars--including Cadillac, Porsche, BMW and Audi. Maybe this explains a note of hyperbole that has begun to creep into Mr. Musk's frequent blog postings. "If a false perception about the safety of electric cars is allowed to linger," he wrote last week, "it will delay the advent of sustainable transport and increase the risk of global climate change, with potentially disastrous consequences worldwide."
Federal regulators have been warned. They can always be denounced as climate criminals if they find the Tesla Model S defective. Maybe Mr. Musk is ready to play the political game after all.
Credit: Holman W. Jenkins, Jr.
Subject: Automobile industry; Automobile safety; Defects
Location: California
People: LaHood, Ray
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Nov 26, 2013
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1461771644
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1461771644?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Meets the Auto Regulators; The feds have opened a safety investigation into the Model S fires. Elon Musk should be worried.
Author: Jenkins, Holman W; Jr.
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Nov 2013: n/a.
ProQuest document link
Abstract:
At a congressional hearing on the robotic car last week, a GM executive pleaded for "protection for auto makers and dealers from frivolous litigation for systems that meet and surpass whatever performance standards are established by the government."
Full text: Look out, Elon Musk. Expecting rational results from regulatory agencies is often a recipe for disappointment.
Two of Mr. Musk's Tesla Model S cars burned up when road debris punctured the battery, a vulnerability not seen in other electric cars. Mr. Musk says his cars are no more fire-prone than gasoline cars. He claims to welcome a National Highway Traffic Safety Administration investigation into whether the cars are defective and warrant a recall.
Good luck with that. Mr. Musk is embroiled in a process that, he may soon discover, can quickly become more about politics than engineering. GM pickups with side-mounted gas tanks in the 1980s were necessarily more fire-prone in side collisions, yet the truck's overall safety record was exemplary and the vehicle fully complied with federal fuel-system safety standards. That didn't stop the feds from eventually ruling the trucks defective, in response to over-the-top media and interest-group allegations against the company.
Those nearing ecstasy over the driverless car ought to sober up too. Tesla is not the only example of how unwelcoming our system of auto regulation is to new ideas. At a congressional hearing on the robotic car last week, a GM executive pleaded for "protection for auto makers and dealers from frivolous litigation for systems that meet and surpass whatever performance standards are established by the government." NHTSA's David Strickland was also present and seemed a lot more interested in extending his agency's remit to "things like, you know, navigation on an iPhone. . . . That is a piece of motor vehicle equipment and I think we have a very strong precedent."
And recall NHTSA's performance during the furor almost four years ago over alleged runaway Toyotas. Its then-overseer, Transportation Secretary Ray LaHood, happily participated in congressional hearings designed to flog for the benefit of trial lawyers the idea of a hidden bug in Toyota's electronic throttle control.
When the agency much more quietly came out with a report a year later debunking the idea of an electronic defect, notice how little good it did Toyota. The car maker still found it necessary to cough up $1.2 billion to satisfy owners who claimed their cars lost value in the media frenzy over a non-defect. Toyota has also seen the tide turning against it lately as it resists a deluge of accident claims.
At first, opposing lawyers were hesitant to emphasize an invisible defect that government research suggested didn't exist. That was a tactical error on their part. In an Oklahoma trial last month involving an 82-year-old woman driver, jurors awarded $3 million in compensatory damages and were ready to assign punitive damages in a complaint focused on a hypothetical bug when Toyota abruptly settled on undisclosed terms.
In another closely-watched trial set to begin in California in March, an 83-year-old female driver (who has since died from unrelated causes) testified in a deposition that she stepped on the brake instead of the gas. The judge has already ruled that if the jury decides to believe her testimony, it is entitled to infer the existence of a defect that nobody can find.
These cases, out of some 300 pending, were chosen for a reason. Study after study, including one last year by the University of North Carolina Highway Safety Research Center, finds that elderly female drivers are inordinately prone to "pedal misapplication." If Toyota can't prevail in these cases, the company might be wise to run up the white flag and seek a global settlement that some estimate at upwards of $5 billion--quite a sum for a non-defect.
Why do we mention this? These episodes describe the regulatory-cum-political thicket that Tesla wandered into when it started making cars. This thicket has served as a near-perfect barrier to entry to startup car makers for the better part of a century.
Even more so because Tesla's troubles come at a time when much bigger companies, with vast lobbying and political resources, are entering the market for high-end electric cars--including Cadillac, Porsche, BMW and Audi. Maybe this explains a note of hyperbole that has begun to creep into Mr. Musk's frequent blog postings. "If a false perception about the safety of electric cars is allowed to linger," he wrote last week, "it will delay the advent of sustainable transport and increase the risk of global climate change, with potentially disastrous consequences worldwide."
Federal regulators have been warned. They can always be denounced as climate criminals if they find the Tesla Model S defective. Maybe Mr. Musk is ready to play the political game after all.
Credit: By Holman W. Jenkins, Jr.
Subject: Traffic accidents & safety; Fatalities; Automobile safety; Defects
Location: California
People: LaHood, Ray
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Nov 27, 2013
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1461807932
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1461807932?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Meets the Auto Regulators
Author: Jenkins, Holman W; Jr.
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 Nov 2013: A.13.
ProQuest document link
Abstract:
At a congressional hearing on the robotic car last week, a GM executive pleaded for "protection for auto makers and dealers from frivolous litigation for systems that meet and surpass whatever performance standards are established by the government."
Full text: Look out, Elon Musk. Expecting rational results from regulatory agencies is often a recipe for disappointment.
Two of Mr. Musk's Tesla Model S cars burned up when road debris punctured the battery, a vulnerability not seen in other electric cars. Mr. Musk says his cars are no more fire-prone than gasoline cars. He claims to welcome a National Highway Safety Administration investigation into whether the cars are defective and warrant a recall.
Good luck with that. Mr. Musk is embroiled in a process that, he may soon discover, can quickly become more about politics than engineering. GM pickups with side-mounted gas tanks in the 1980s were necessarily more fire-prone in side collisions. Yet the truck's overall safety record was exemplary and the vehicle fully complied with federal fuel-system safety standards. That didn't stop the feds from eventually ruling the trucks defective, in response to over-the-top media and interest-group allegations against the company.
Those nearing ecstasy over the driverless car ought to sober up too. Tesla is not the only example of how unwelcoming our system of auto regulation is to new ideas. At a congressional hearing on the robotic car last week, a GM executive pleaded for "protection for auto makers and dealers from frivolous litigation for systems that meet and surpass whatever performance standards are established by the government." NHTSA's David Strickland was also present and seemed a lot more interested in extending his agency's remit to "things like, you know, navigation on an iPhone. . . . That is a piece of motor vehicle equipment and I think we have a very strong precedent."
And recall NHTSA's performance during the furor almost four years ago over alleged runaway Toyotas. Its then-overseer, Transportation Secretary Ray LaHood, happily participated in congressional hearings designed to flog for the benefit of trial lawyers the idea of a hidden bug in Toyota's electronic throttle control.
When the agency much more quietly came out with a report a year later debunking the idea of an electronic defect, notice how little good it did Toyota. The car maker still found it necessary to cough up $1.2 billion to satisfy owners who claimed their cars lost value in the media frenzy over a non-defect. Toyota has also seen the tide turning against it lately as it resists a deluge of accident claims.
At first, opposing lawyers were hesitant to emphasize an invisible defect that government research suggested didn't exist. That was a tactical error on their part. In an Oklahoma trial last month involving an 82-year-old woman driver, jurors awarded $3 million in compensatory damages and were ready to assign punitive damages in a complaint focused on a hypothetical bug when Toyota abruptly settled on undisclosed terms.
In another closely-watched trial set to begin in California in March, an 83-year-old female driver (who has since died from unrelated causes) testified in a deposition that she stepped on the brake instead of the gas. The judge has already ruled that if the jury decides to believe her testimony, it is entitled to infer the existence of a defect that nobody can find.
These cases, out of some 300 pending, were chosen for a reason. Study after study, including one last year by the University of North Carolina Highway Safety Research Center, finds that elderly female drivers are inordinately prone to "pedal misapplication." If Toyota can't prevail in these cases, the company might be wise to run up the white flag and seek a global settlement that some estimate at upwards of $5 billion -- quite a sum for a non-defect.
Why do we mention this? These episodes describe the regulatory-cum-political thicket that Tesla wandered into when it started making cars. This thicket has served as a barrier to entry to startup car makers for the better part of a century.
Even more so because Tesla's troubles come at a time when much bigger companies, with vast lobbying and political resources, are entering the market for high-end electric cars -- including Cadillac, Porsche, BMW and Audi. Maybe this explains a note of hyperbole that has begun to creep into Mr. Musk's frequent blog postings. "If a false perception about the safety of electric cars is allowed to linger," he wrote last week, "it will delay the advent of sustainable transport and increase the risk of global climate change, with potentially disastrous consequences worldwide."
Federal regulators have been warned. They can always be denounced as climate criminals if they find the Tesla Model S defective. Maybe Mr. Musk is ready to play the political game after all.
(See related letter: "Letters to the Editor: Tesla Beats Most Cars on Fire Safety" -- WSJ Dec. 5, 2013)
Credit: By Holman W. Jenkins, Jr.
Subject: Automobile industry; Automobile safety; Defects; Regulatory agencies
Location: California
People: LaHood, Ray Musk, Elon
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.13
Publication year: 2013
Publication date: Nov 27, 2013
column: Business World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1461846102
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1461846102?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Trial by Fire for Tesla True Believers; Share Spike and Car Fires Don't Shake Faith That Auto Maker Is Going Higher Still
Author: Russolillo, Steven; Kiernan, Kaitlyn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Nov 2013: n/a.
ProQuest document link
Abstract:
Tesla's $15.6 billion market value is roughly the equivalent of 110-year-old motorcycle maker Harley-Davidson Inc. Tesla's surge has been a financial boon for early adopters, helping some investors buy homes or the company's $70,000 vehicles. Tesla's chairman and chief executive, Elon Musk, has said the Model S is safer than gas-powered vehicles and that the media's reporting on the fires was overblown.
Full text: Brian Steel is a Tesla believer. The auto mechanic has put nearly $250,000 into Tesla Motors Inc. stock, ignoring warnings from his financial adviser. As the stock price soared, his profits even allowed him to buy a Tesla Model S.
"Telsa is going to change the world," Mr. Steel, 62 years old, of Tacoma, Wash., said of the upstart electric-car maker, whose rocketing stock rally and screeching pullback have been the talk of the stock market in 2013.
Mr. Steel is unfazed by recent troubles at the company, including a trio of reports about its battery-powered vehicles catching fire. He has even taken to online message boards to defend the company and its stock.
There are few stocks like Tesla, which has attracted admirers and detractors during its rapid rise. The Palo Alto, Calif., company's shares are up more than 275% this year; among stocks in the Nasdaq-100 Index, only Netflix Inc. has gained more. Tesla's $15.6 billion market value is roughly the equivalent of 110-year-old motorcycle maker Harley-Davidson Inc.
Tesla's surge has been a financial boon for early adopters, helping some investors buy homes or the company's $70,000 vehicles.
Fans of especially innovative companies "become hugely enthusiastic, and they can drive prices way up," says Michael Farr, president of portfolio-management firm Farr, Miller & Washington, which has $950 million in assets under management. "It all looks easy when it's working." His firm doesn't have a position in Tesla.
Some observers say the rapid rise and volatility of Tesla shares echoes the market excitement around Amazon.com Inc. during the late 1990s or Apple Inc. in recent years. The highflying stocks attracted investors who viewed the companies as revolutionary.
But many run-ups in a company's early years have been followed by spectacular falls. Tesla shares have dropped about 35% from their $194.50 peak in late September after the fires. Disappointing quarterly results in November added to the gloom.
Tesla's chairman and chief executive, Elon Musk, has said the Model S is safer than gas-powered vehicles and that the media's reporting on the fires was overblown. The owners whose vehicles caught fire have ordered new ones, he says. Mr. Musk declined to comment for this article.
Tesla has converted drivers who were devoted to other brands. Fred Towers, a former stockbroker turned entrepreneur, bought almost nothing but Mercedes vehicles starting in 1972--until he discovered Tesla.
Mr. Towers, 79, was initially intrigued by the Model S after learning earlier this year that it earned high ratings from Consumer Reports, scoring 99 out of 100. His curiosity brought him to a Tesla store about two hours from one of his homes in Naples, Fla. After a test drive in May, he splurged.
"I put a deposit down on the spot," he says. "I was absolutely blown away."
Shortly after his buying his car, Mr. Towers bought a few hundred shares of Tesla. He has no plans to sell the stock and isn't overly concerned by the latest pullback. Should the shares fall further, he says he would consider adding to his position.
"I'm not in it for what it is going to do in the next week or month," Mr. Towers says. "I'm in it for the next five or 10 years, if I live that long."
The stock's gains have enriched some diehard Tesla fans. Sam Cornwell, a 33-year-old freelance photographer in the U.K. who has a wife and a 16-month-old son, says he plunked down his life savings of $25,000 to buy the shares. They fetched about $27.50 when he bought the stock last year.
After holding the shares through much of 2013, Mr. Cornwell was adamant he wouldn't sell unless "something radical happened," either from the company's end or a development in his personal life. Both occurred.
Needing cash for a home down payment, he used some of his newfound fortune, selling about 25% of his position. Mr. Cornwell has continued to pare his holdings after the car fires and accompanying media attention. A 30-second clip on YouTube of a Model S on fire has attracted about 3.3 million page views.
"I'm not an idiot," he says. "Bad news doesn't equate to a good stock price. The absolutely pristine image of Tesla is ruined." Mr. Cornwell said he has sold about 90% of his position over the past several weeks but won't sell out completely in case shares rebound.
"Nothing changes my position on Tesla the company, but Tesla the stock changed significantly after three fires in six weeks," he said. "I got the very best I could for my investment."
For many Tesla investors, the appeal of the company extends far beyond stock-market riches. Some cotton to the environmental advantages of electric vehicles and the company's technology. Many embrace the charisma of entrepreneur Mr. Musk, who co-founded PayPal and space-exploration company SpaceX.
Others have trumpeted the company's expansion. In the fiscal first quarter this year, Tesla reported its first-ever quarterly profit. Recently, Tesla said it delivered 5,500 Model S vehicles in the three months ended Sept. 30, ahead of company projections. Tesla plans to enter China in 2014 and wants to expand into other markets. It also plans to market a cheaper model.
At Boston College, 22-year-old grad student Christopher Khan for months touted Tesla to skeptical family, friends and even his professors. He bought the stock when it was in the low $30s.
In the spring, he tried pitching Tesla to his college investment club but was laughed at, and the idea was rejected, he says. On several occasions, he traded playful jabs with a professor who was bearish on Tesla.
"He loved giving me a hard time about it, but look who's laughing now," Mr. Khan says. He said he trimmed his position when the stock was near its peak, but didn't sell out completely: "My confidence got the best of me, I suppose."
But some determined bears say this is just the beginning of a more prolonged slide.
Blaine Bailey, a 53-year-old mortgage-loan originator in the Atlanta area, has been betting against Tesla using stock options since May, when the shares were below $30. Even with the stock down from its highs, Mr. Bailey says the shares are overpriced.
"The fires might be isolated incidents that say nothing about the safety of the car, but before them, the stock price was at an unsafe level," says Mr. Bailey. "The fires were just the excuse the market needed for the stock price to come back down."
Even Mr. Musk, the Tesla chief executive, said in October that the valuation on Tesla shares was quite high. On Nov. 12 at a conference in New York, he said the stock represented "a pretty good deal."
About 15% of available Tesla shares were on loan to short sellers as of Monday, according to data from securities-financing tracker Markit, well above the average of 2.3% of shares across the S&P 500. Short sellers borrow stock and sell it, betting the price will fall so they can buy it back later at a lower price and pocket the difference.
So-called short interest reached 24.4% in March. Only one stock in the S&P 500 currently has a higher level of bearish bets, according to Markit.
Many fans shrug at those concerns. Mr. Steel, the Tacoma., Wash., mechanic, bought more shares of Tesla in November.
Aniket Chakrabarti, a primary-care doctor in Pembroke, Mass., is currently in the red on his Tesla position, having bought shares in September as Tesla neared its peak. But he said once the shares turn higher, he will look to buy more.
Dr. Chakrabarti, who bought his Model S in early October, has used online message boards to connect with other Tesla owners and enthusiasts. In late October, he was one in a caravan of 10 Tesla drivers that met in Plymouth, Mass., for a scenic autumn ride.
"There is a great sense of community among Tesla owners," says Mr. Chakrabarti, who got lunch after the drive with the group of relative strangers at Wahlburger, a restaurant in Hingham, Mass., owned by actor brothers Mark and Donnie Wahlberg.
After the third Model S fire, Mr. Steel went to a Tesla message board to defend the vehicle, touting his 37 years of experience in the auto business. Mr. Steel wrote that cars of all kinds can catch fire as the three Tesla vehicles did, and later said in an interview that he found its high safety rating from Consumer Reports reassuring.
Regardless of Tesla's chance of catching fire, "I would still choose a Model S in the belief that I would be safer in an accident," Mr. Steel wrote on the message board.
Write to Steven Russolillo at and Kaitlyn Kiernan at
Credit: By Steven Russolillo and Kaitlyn Kiernan
Subject: Research & development--R & D; Investment policy; Automobiles; Stock exchanges; Investments
Company / organization: Name: Netflix Inc; NAICS: 532230, 443142; Name: Amazon.com Inc; NAICS: 454111; Name: Consumer Reports; NAICS: 511120; Name: Apple Inc; NAICS: 511210, 334111, 334220; Name: Harley-Davidson Inc; NAICS: 336111, 336213, 336214, 336991; Name: Tesla Motors Inc; NAICS: 336999; Name: Boston College; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Nov 29, 2013
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1462437374
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1462437374?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Trial by Fire for Tesla True Believers; Share Spike and Car Fires Don't Shake Faith That Auto Maker Is Going Higher Still
Author: Russolillo, Steven; Kiernan, Kaitlyn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Nov 2013: n/a.
ProQuest document link
Abstract:
Tesla's $15.6 billion market value is roughly the equivalent of 110-year-old motorcycle maker Harley-Davidson Inc. Tesla's surge has been a financial boon for early adopters, helping some investors buy homes or the company's $70,000 vehicles. Tesla's chairman and chief executive, Elon Musk, has said the Model S is safer than gas-powered vehicles and that the media's reporting on the fires was overblown.
Full text: Brian Steel is a Tesla believer. The auto mechanic has put nearly $250,000 into Tesla Motors Inc. stock, ignoring warnings from his financial adviser. As the stock price soared, his profits even allowed him to buy a Tesla Model S.
"Tesla is going to change the world," Mr. Steel, 62 years old, of Tacoma, Wash., said of the upstart electric-car maker, whose rocketing stock rally and screeching pullback have been the talk of the stock market in 2013.
Mr. Steel is unfazed by recent troubles at the company, including a trio of reports about its battery-powered vehicles catching fire. He has even taken to online message boards to defend the company and its stock.
There are few stocks like Tesla, which has attracted admirers and detractors during its rapid rise. The Palo Alto, Calif., company's shares are up more than 275% this year; among stocks in the Nasdaq-100 Index, only Netflix Inc. has gained more. Tesla's $15.6 billion market value is roughly the equivalent of 110-year-old motorcycle maker Harley-Davidson Inc.
Tesla's surge has been a financial boon for early adopters, helping some investors buy homes or the company's $70,000 vehicles.
Fans of especially innovative companies "become hugely enthusiastic, and they can drive prices way up," says Michael Farr, president of portfolio-management firm Farr, Miller & Washington, which has $950 million in assets under management. "It all looks easy when it's working." His firm doesn't have a position in Tesla.
Some observers say the rapid rise and volatility of Tesla shares echoes the market excitement around Amazon.com Inc. during the late 1990s or Apple Inc. in recent years. The highflying stocks attracted investors who viewed the companies as revolutionary.
But many run-ups in a company's early years have been followed by spectacular falls. Tesla shares have dropped about 35% from their $194.50 peak in late September after the fires. Disappointing quarterly results in November added to the gloom.
Tesla's chairman and chief executive, Elon Musk, has said the Model S is safer than gas-powered vehicles and that the media's reporting on the fires was overblown. The owners whose vehicles caught fire have ordered new ones, he says. A spokeswoman for Tesla declined to comment on behalf of the company and Mr. Musk.
Tesla has converted drivers who were devoted to other brands. Fred Towers, a former stockbroker turned entrepreneur, bought almost nothing but Mercedes vehicles starting in 1972--until he discovered Tesla.
Mr. Towers, 79, was initially intrigued by the Model S after learning earlier this year that it earned high ratings from Consumer Reports, scoring 99 out of 100. His curiosity brought him to a Tesla store about two hours from one of his homes in Naples, Fla. After a test drive in May, he splurged.
"I put a deposit down on the spot," he says. "I was absolutely blown away."
Shortly after his buying his car, Mr. Towers bought a few hundred shares of Tesla. He has no plans to sell the stock and isn't overly concerned by the latest pullback. Should the shares fall further, he says he would consider adding to his position.
"I'm not in it for what it is going to do in the next week or month," Mr. Towers says. "I'm in it for the next five or 10 years, if I live that long."
The stock's gains have enriched some diehard Tesla fans. Sam Cornwell, a 33-year-old freelance photographer in the U.K. who has a wife and a 16-month-old son, says he plunked down his life savings of $25,000 to buy the shares. They fetched about $27.50 when he bought the stock last year.
After holding the shares through much of 2013, Mr. Cornwell was adamant he wouldn't sell unless "something radical happened," either from the company's end or a development in his personal life. Both occurred.
Needing cash for a home down payment, he used some of his newfound fortune, selling about 25% of his position. Mr. Cornwell has continued to pare his holdings after the car fires and accompanying media attention. A 30-second clip on YouTube of a Model S on fire has attracted about 3.3 million page views.
"I'm not an idiot," he says. "Bad news doesn't equate to a good stock price. The absolutely pristine image of Tesla is ruined." Mr. Cornwell said he has sold about 90% of his position over the past several weeks but won't sell out completely in case shares rebound.
"Nothing changes my position on Tesla the company, but Tesla the stock changed significantly after three fires in six weeks," he said. "I got the very best I could for my investment."
For many Tesla investors, the appeal of the company extends far beyond stock-market riches. Some cotton to the environmental advantages of electric vehicles and the company's technology. Many embrace the charisma of entrepreneur Mr. Musk, who co-founded PayPal and space-exploration company SpaceX.
Others have trumpeted the company's expansion. In the fiscal first quarter this year, Tesla reported its first-ever quarterly profit. Recently, Tesla said it delivered 5,500 Model S vehicles in the three months ended Sept. 30, ahead of company projections. Tesla plans to enter China in 2014 and wants to expand into other markets. It also plans to market a cheaper model.
At Boston College, 22-year-old grad student Christopher Khan for months touted Tesla to skeptical family, friends and even his professors. He bought the stock when it was in the low $30s.
In the spring, he tried pitching Tesla to his college investment club but was laughed at, and the idea was rejected, he says. On several occasions, he traded playful jabs with a professor who was bearish on Tesla.
"He loved giving me a hard time about it, but look who's laughing now," Mr. Khan says. He said he trimmed his position when the stock was near its peak, but didn't sell out completely: "My confidence got the best of me, I suppose."
But some determined bears say this is just the beginning of a more prolonged slide.
Blaine Bailey, a 53-year-old mortgage-loan originator in the Atlanta area, has been betting against Tesla using stock options since May, when the shares were below $30. Even with the stock down from its highs, Mr. Bailey says the shares are overpriced.
"The fires might be isolated incidents that say nothing about the safety of the car, but before them, the stock price was at an unsafe level," says Mr. Bailey. "The fires were just the excuse the market needed for the stock price to come back down."
Even Mr. Musk, the Tesla chief executive, said in October that the valuation on Tesla shares was quite high. On Nov. 12 at a conference in New York, he said the stock represented "a pretty good deal."
About 15% of available Tesla shares were on loan to short sellers as of Monday, according to data from securities-financing tracker Markit, well above the average of 2.3% of shares across the S&P 500. Short sellers borrow stock and sell it, betting the price will fall so they can buy it back later at a lower price and pocket the difference.
So-called short interest reached 24.4% in March. Only one stock in the S&P 500 currently has a higher level of bearish bets, according to Markit.
Many fans shrug at those concerns. Mr. Steel, the Tacoma., Wash., mechanic, bought more shares of Tesla in November.
Aniket Chakrabarti, a primary-care doctor in Pembroke, Mass., is currently in the red on his Tesla position, having bought shares in September as Tesla neared its peak. But he said once the shares turn higher, he will look to buy more.
Dr. Chakrabarti, who bought his Model S in early October, has used online message boards to connect with other Tesla owners and enthusiasts. In late October, he was one in a caravan of 10 Tesla drivers that met in Plymouth, Mass., for a scenic autumn ride.
"There is a great sense of community among Tesla owners," says Mr. Chakrabarti, who got lunch after the drive with the group of relative strangers at Wahlburger, a restaurant in Hingham, Mass., owned by actor brothers Mark and Donnie Wahlberg.
After the third Model S fire, Mr. Steel went to a Tesla message board to defend the vehicle, touting his 37 years of experience in the auto business. Mr. Steel wrote that cars of all kinds can catch fire as the three Tesla vehicles did, and later said in an interview that he found its high safety rating from Consumer Reports reassuring.
Regardless of Tesla's chance of catching fire, "I would still choose a Model S in the belief that I would be safer in an accident," Mr. Steel wrote on the message board.
Write to Steven Russolillo at and Kaitlyn Kiernan at
Credit: By Steven Russolillo and Kaitlyn Kiernan
Subject: Research & development--R & D; Investment policy; Automobiles; Stock exchanges; Investments
Company / organization: Name: Netflix Inc; NAICS: 532230, 443142; Name: Amazon.com Inc; NAICS: 454111; Name: Consumer Reports; NAICS: 511120; Name: Apple Inc; NAICS: 511210, 334111, 334220; Name: Harley-Davidson Inc; NAICS: 336111, 336213, 336214, 336991; Name: Tesla Motors Inc; NAICS: 336999; Name: Boston College; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Nov 30, 2013
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1462445059
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1462445059?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Trial by Fire for Tesla True Believers
Author: Russolillo, Steven; Kiernan, Kaitlyn
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]30 Nov 2013: B.1.
ProQuest document link
Abstract:
Tesla's $15.6 billion market value is roughly the equivalent of 110-year-old motorcycle maker Harley-Davidson Inc. Tesla's surge has been a boon for early adopters, helping some buy homes or the company's $70,000 vehicles. Tesla's chairman and chief executive, Elon Musk, has said the Model S is safer than gas-powered vehicles and that the media's reporting on the fires was overblown.
Full text: Brian Steel is a Tesla believer. The auto mechanic has put nearly $250,000 into Tesla Motors Inc. stock, ignoring warnings from his financial adviser. As the stock price soared, his profits even allowed him to buy a Tesla Model S.
"Telsa is going to change the world," Mr. Steel, 62 years old, of Tacoma, Wash., said of the upstart electric-car maker, whose rocketing stock rally and screeching pullback have been the talk of the market in 2013.
Mr. Steel is unfazed by recent troubles at the company, including a trio of reports about its battery-powered vehicles catching fire. He has taken to online message boards to defend the company and its stock.
There are few stocks like Tesla, which has attracted admirers and detractors during its rapid rise. The Palo Alto, Calif., company's shares are up more than 275% this year; among stocks in the Nasdaq-100 Index, only Netflix Inc. has gained more. Tesla's $15.6 billion market value is roughly the equivalent of 110-year-old motorcycle maker Harley-Davidson Inc.
Tesla's surge has been a boon for early adopters, helping some buy homes or the company's $70,000 vehicles.
Fans of especially innovative companies "become hugely enthusiastic, and they can drive prices way up," says Michael Farr, president of portfolio-management firm Farr, Miller & Washington, which has $950 million in assets under management. "It all looks easy when it's working." His firm doesn't have a position in Tesla.
Some observers say the rapid rise and volatility of Tesla shares echo the market excitement around Amazon.com Inc. during the late 1990s or Apple Inc. in recent years. The highflying stocks attracted investors who viewed the companies as revolutionary.
But many run-ups in a company's early years have been followed by spectacular falls. Tesla shares have dropped about 35% from their $194.50 peak in late September after the fires. Disappointing quarterly results in November added to the gloom.
Tesla's chairman and chief executive, Elon Musk, has said the Model S is safer than gas-powered vehicles and that the media's reporting on the fires was overblown. A spokeswoman for Tesla declined to comment on behalf of the company and Mr. Musk.
Tesla has converted drivers who were devoted to other brands. Fred Towers, a former stockbroker turned entrepreneur, bought almost nothing but Mercedes vehicles starting in 1972 -- until he discovered Tesla.
Mr. Towers, 79, was initially intrigued by the Model S after learning earlier this year that it earned high ratings from Consumer Reports. His curiosity brought him to a Tesla store about two hours from one of his homes in Naples, Fla. After a test drive in May, he splurged.
"I put a deposit down on the spot," he says. "I was absolutely blown away." Shortly after buying his car, Mr. Towers bought a few hundred shares of Tesla. He has no plans to sell the stock and isn't overly concerned by the latest pullback. Should the shares fall further, he says he would consider adding to his position. "I'm not in it for what it is going to do in the next week or month," Mr. Towers says. "I'm in it for the next five or 10 years, if I live that long."
The stock's gains have enriched some diehard Tesla fans. Sam Cornwell, a 33-year-old freelance photographer in the U.K. who has a wife and a 16-month-old son, says he plunked down his life savings of $25,000 to buy the shares. They fetched about $27.50 when he bought the stock last year.
After holding the shares through much of 2013, Mr. Cornwell was adamant he wouldn't sell unless "something radical happened," either from the company's end or a development in his personal life. Both occurred.
Needing cash for a home down payment, he used some of his newfound fortune, selling about 25% of his position. Mr. Cornwell has continued to pare his holdings after the fires and accompanying media attention. A 30-second clip on YouTube of a Model S on fire has attracted about 3.3 million page views.
"I'm not an idiot," he says. "Bad news doesn't equate to a good stock price. The absolutely pristine image of Tesla is ruined." Mr. Cornwell said he has sold about 90% of his position over the past several weeks.
For many Tesla investors, the appeal of the company extends far beyond stock-market riches. Some cotton to the environmental advantages of electric vehicles and the company's technology. Many embrace the charisma of Mr. Musk, who co-founded PayPal and space-exploration company SpaceX.
Others have trumpeted the company's expansion. In the fiscal first quarter this year, Tesla reported its first-ever quarterly profit. Recently, Tesla said it delivered 5,500 Model S vehicles in the three months ended Sept. 30, ahead of company projections. Tesla plans to enter China in 2014 and wants to expand into other markets. It also plans to market a cheaper model.
But some determined bears say this is just the beginning of a more prolonged slide.
Blaine Bailey, a 53-year-old mortgage-loan originator in the Atlanta area, has been betting against Tesla using stock options since May, when the shares were below $30. Even with the stock down from its highs, Mr. Bailey says the shares are overpriced.
"The fires might be isolated incidents that say nothing about the safety of the car, but before them, the stock price was at an unsafe level," Mr. Bailey says. "The fires were just the excuse the market needed for the stock price to come back down."
Even Mr. Musk, the Tesla chief executive, said in October that the valuation on Tesla shares was quite high. On Nov. 12 at a conference in New York, he said the stock represented "a pretty good deal."
About 15% of available Tesla shares were on loan to short sellers as of Monday, according to data from securities-financing tracker Markit, well above the average of 2.3% of shares across the S&P 500. Short sellers borrow stock and sell it, betting the price will fall so they can buy it back later at a lower price and pocket the difference.
So-called short interest reached 24.4% in March. Only one stock in the S&P 500 currently has a higher level of bearish bets, according to Markit.
Many fans shrug at those concerns. Mr. Steel, the Tacoma., Wash., mechanic, bought more shares of Tesla in November.
Aniket Chakrabarti, a primary-care doctor in Pembroke, Mass., is currently in the red on his Tesla position, having bought shares in September as Tesla neared its peak. But he said once the shares turn higher, he will look to buy more.
Dr. Chakrabarti, who bought his Model S in early October, has used online message boards to connect with other Tesla enthusiasts. In late October, he was one in a caravan of 10 Tesla drivers that met in Plymouth, Mass., for a scenic autumn ride.
"There is a great sense of community among Tesla owners," says Mr. Chakrabarti, who got lunch after the drive with the group of relative strangers at Wahlburger, a restaurant in Hingham, Mass., owned by actor brothers Mark and Donnie Wahlberg.
After the third Model S fire, Mr. Steel went to a Tesla message board to defend the vehicle, touting his 37 years of experience in the auto business.
Regardless of Tesla's chance of catching fire, "I would still choose a Model S in the belief that I would be safer in an accident," Mr. Steel wrote.
Credit: By Steven Russolillo and Kaitlyn Kiernan
Subject: Electric vehicles; Automobile industry; Investment policy
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 3400: Investment analysis & personal finance; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2013
Publication date: Nov 30, 2013
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1462488302
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1462488302?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Beats Most Cars on Fire Safety; Tesla meets the auto regulators.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2013: n/a.
ProQuest document link
Abstract:
In regard to Holman Jenkins's Nov. 27 Business World column "Tesla Meets the Auto Regulators": Just as David went to battle against a seemingly insurmountable opponent with only agility and skill as his strengths, Tesla is taking on the much larger and enormously powerful car companies.
Full text: In regard to Holman Jenkins's Nov. 27 Business World column "Tesla Meets the Auto Regulators": Just as David went to battle against a seemingly insurmountable opponent with only agility and skill as his strengths, Tesla is taking on the much larger and enormously powerful car companies. Like David, Tesla has a fair chance of winning. Tesla is the first all electric car to boast a 250-plus mile cruising range as well as receiving the highest safety rating of any car ever by the NHTSA. However, due to three recent car fires (which happen to be the only Tesla fires ever), the NHTSA has decided to launch an investigation despite the fact that all three owners were unharmed and have requested another Tesla. This type of publicity might spook Tesla's high end, socially conscious customer base. One might wonder why the NHTSA is doing this when there have been 150,000-plus gas-vehicle fires since Tesla's inception.
Perhaps Goliath has a lot of friends on Capitol Hill.
But one should know by now not to underestimate the strength of the underdog. Tesla will be vindicated.
Charlie Serpa
Fairfield, Conn.
Subject: Automobile industry; Research & development--R & D
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2013
Publication date: Dec 4, 2013
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1464776309
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1464776309?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Beats Most Cars on Fire Safety
Author: Anonymous
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Dec 2013: A.18.
ProQuest document link
Abstract:
In regard to Holman Jenkins's Nov. 27 Business World column "Tesla Meets the Auto Regulators": Just as David went to battle against a seemingly insurmountable opponent with only agility and skill as his strengths, Tesla is taking on the much larger and enormously powerful car companies.
Full text: In regard to Holman Jenkins's Nov. 27 Business World column "Tesla Meets the Auto Regulators": Just as David went to battle against a seemingly insurmountable opponent with only agility and skill as his strengths, Tesla is taking on the much larger and enormously powerful car companies. Like David, Tesla has a fair chance of winning. Tesla is the first all electric car to boast a 250-plus mile cruising range as well as receiving the highest safety rating of any car ever by the NHTSA. However, due to three recent car fires (which happen to be the only Tesla fires ever), the NHTSA has decided to launch an investigation despite the fact that all three owners were unharmed and have requested another Tesla. This type of publicity might spook Tesla's high end, socially conscious customer base. One might wonder why the NHTSA is doing this when there have been 150,000-plus gas-vehicle fires since Tesla's inception. Perhaps Goliath has a lot of friends on Capitol Hill.
But one should know by now not to underestimate the strength of the underdog. Tesla will be vindicated.
Charlie Serpa
Fairfield, Conn.
Subject: Automobile industry; Research & development--R & D
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.18
Publication year: 2013
Publication date: Dec 5, 2013
Section: Letters to the Editor
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1464874074
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1464874074?accountid=7117
Copyright: (c) 2013 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
NHTSA Still Studying Tesla Fires, Departing Administrator Says; Strength of Lower Shielding on Model S Questioned After Two Fires
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Jan 2014: n/a.
ProQuest document link
Abstract:
Tesla Chief Executive Officer Elon Musk has said the vehicle is safe, but took action to cover any fire damage under the vehicle warranty and is installing software that raises the vehicle at highway speeds to avoid similar accidents.
Full text: The National Highway Traffic Safety Administration continues to study Tesla Motors Inc.'s Model S on whether the shielding underneath the vehicle is strong enough after two vehicles in October burned after running over road debris.
David Strickland, the departing NHTSA administrator David Strickland, in an interview Friday, said "Tesla has been very helpful in providing information" and that the investigation continues.
Tesla Chief Executive Officer Elon Musk has said the vehicle is safe, but took action to cover any fire damage under the vehicle warranty and is installing software that raises the vehicle at highway speeds to avoid similar accidents.
In both cases, the driver of the vehicle had time to park the car and get out before the fire spread to the rest of the vehicle.
In separate news, Tesla is attempting to remedy problems with in-home chargers that could overheat. Tesla says poor wiring could cause overheating and in December sent an over-the-air software update to address the problem. The company said Friday it was sending owners a new wall charging adapter with a thermal fuse over the next few weeks to fully correct any issue.
Credit: Mike Ramsey
Subject: Traffic accidents & safety; Fires
People: Musk, Elon
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Jan 10, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1476438790
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1476438790?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Plans to Add Charging Network in China; Electric Car Maker Sold Nearly 7,000 Cars World-Wide in Final Months of 2013
Author: Murphy, Colum
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2014: n/a.
ProQuest document link
Abstract:
DETROIT--Electric car maker Tesla Motors Inc. is looking to develop a network of no-fee charging stations in China that would allow owners of its cars to travel long distances, such as between Beijing and Shanghai.
Full text: DETROIT--Electric car maker Tesla Motors Inc. is looking to develop a network of no-fee charging stations in China that would allow owners of its cars to travel long distances, such as between Beijing and Shanghai.
Diarmuid O'Connell, Tesla's vice president of corporate and business development, said the company has recently started taking steps to make the network a reality. He declined to say when the stations might be available.
Palo Alto, Calif.-based Tesla is developing a similar network in the U.S., where customers of its Model S battery-powered sedan will be able to drive from coast to coast free of charge using a network of superchargers. The company also is working on a similar network in Europe.
Separately, Tesla said it delivered 6,900 Model S electric sedans in the last three months of the year, 20% more than the estimate it gave when it reported its third-quarter earnings in November, said Vice President of Sales Jerome Guillen.
The news sent Tesla shares up nearly 16% to $161.25 in 4 p.m. trading on the Nasdaq Stock Market.
Speaking at the North American International Auto Show, Mr. Guillen said the company would double the number of sales and service locations globally in 2014. "What's in for 2014? Growth, growth and growth," Mr. Guillen said. "It's relentless growth--it's how fast can we grow."
If it comes to fruition, a Tesla charging network in China would represent a major achievement. The Chinese government has been pushing electric vehicles as a solution to the country's auto-pollution woes. But it has been largely unsuccessful mainly because of the difficulties of setting up charging infrastructure.
"We're beginning to speak with the folks that we need to speak with," in China, said Mr. O'Connell, citing property owners and electricity providers as examples. He is confident the company could overcome any potential problems associated with setting up its supercharger network in China.
"Every market has its peculiarities," he said, noting the recent experience Tesla gained in the Netherlands, Germany, Austria and Switzerland. "We have a lot of experience with the heterogeneity of the problem."
Providing a supercharger network isn't necessary for driving a Tesla in China, he said. Customers there could still charge their cars at home or by using public infrastructure, he said.
Tesla isn't a threat to China and its plan to become a leader in new energy vehicles but instead sees itself as an opportunity, Mr. O'Connell said.
"I completely respect the desire of the national, provincial and city governments to support local manufacturers and to get a domestic industry going and if that's in EVs then all the better," said Mr. O'Connell.
Tesla currently has one showroom and one service and sales point in Beijing and has plans to expand "aggressively" with Shanghai as the next target. "We're very anxious to get broad distribution," he said.
Chinese buyers can order the Model S and coming Model X version of the Tesla by placing a down payment of 250,000 yuan, or around $41,000. Delivery of the Model S is scheduled for around the end of March.
He said the company had seen a "tremendous" response in China from a "progressive cadre of folks who are making reservations sight unseen, pricing unknown," he said. Tesla hasn't yet announced its pricing for China.
Tesla didn't see Chinese electric-car maker BYD Co. as a competitor. "We don't compete with EVs. The car was designed to compete with other vehicles in its class such as the BMW 5 series or the Mercedes E-class or S-class," he said. "As far as I know, no Chinese EV manufacturer has got anything in our segment," he said.
Tesla's strong fourth-quarter sales gain comes after its third-quarter deliveries disappointed some analysts because of capacity constraints. The company has said its operating profit for the fourth quarter would be about the same as the third quarter. It posted a net loss of $38 million in the third quarter.
Credit: Colum Murphy
Subject: Automobile industry; Automobile sales; Research & development--R & D; Electric vehicles; Automobile shows; Competition
Location: United States--US Beijing China China Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Jan 14, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1477286503
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1477286503?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Detroit Auto Show: Tesla Plans to Add Charging Network in China
Author: Murphy, Colum; Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Jan 2014: B.6.
ProQuest document link
Abstract:
Electric car maker Tesla Motors Inc. is looking to develop a network of no-fee charging stations in China that would allow owners of its cars to travel long distances, such as between Beijing and Shanghai.
Full text: DETROIT -- Electric car maker Tesla Motors Inc. is looking to develop a network of no-fee charging stations in China that would allow owners of its cars to travel long distances, such as between Beijing and Shanghai.
Diarmuid O'Connell, Tesla's vice president of corporate and business development, said the company has recently started taking steps to make the network a reality. He declined to say when the stations might be available.
Palo Alto, Calif.-based Tesla is developing a similar network in the U.S., where customers of its Model S battery-powered sedan will be able to drive from coast to coast free of charge using a network of superchargers. The company also is working on a similar network in Europe.
Separately, Tesla said it delivered 6,900 Model S electric sedans in the last three months of the year, 20% more than the estimate it gave when it reported its third-quarter earnings in November, said Vice President of Sales Jerome Guillen.
The news sent Tesla shares up 16% to $161.25 in 4 p.m. trading on the Nasdaq Stock Market.
Speaking at the North American International Auto Show, Mr. Guillen said the company would double the number of sales and service locations globally in 2014. "What's in for 2014? Growth, growth and growth," Mr. Guillen said. "It's relentless growth -- it's how fast can we grow."
If it comes to fruition, a Tesla charging network in China would represent a major achievement. The Chinese government has been pushing electric vehicles as a solution to the country's auto-pollution woes. But it has been largely unsuccessful mainly because of the difficulties of setting up charging infrastructure.
"We're beginning to speak with the folks that we need to speak with," in China, said Mr. O'Connell, citing property owners and electricity providers as examples. He is confident the company could overcome any potential problems associated with setting up its supercharger network in China.
"Every market has its peculiarities," he said, noting the recent experience Tesla gained in the Netherlands, Germany, Austria and Switzerland. "We have a lot of experience with the heterogeneity of the problem."
Providing a supercharger network isn't necessary for driving a Tesla in China, he said. Customers there could still charge their cars at home or by using public infrastructure, he said.
Tesla isn't a threat to China and its plan to become a leader in new energy vehicles but instead sees itself as an opportunity, Mr. O'Connell said.
"I completely respect the desire of the national, provincial and city governments to support local manufacturers and to get a domestic industry going and if that's in EVs then all the better," said Mr. O'Connell.
Tesla currently has one showroom and one service and sales point in Beijing and has plans to expand "aggressively" with Shanghai as the next target. "We're very anxious to get broad distribution," he said.
Chinese buyers can order the Model S and coming Model X version of the Tesla by placing a down payment of 250,000 yuan, or around $41,000. Delivery of the Model S is scheduled for around the end of March. The company previously said Model X begin late this year.
He said the company had seen a "tremendous" response in China from a "progressive cadre of folks who are making reservations sight unseen, pricing unknown," he said. Tesla hasn't yet announced its pricing for China.
Tesla didn't see Chinese electric-car maker BYD Co. as a competitor. "We don't compete with EVs. The car was designed to compete with other vehicles in its class such as the BMW 5 series or the Mercedes E-class or S-class," he said. "As far as I know, no Chinese EV manufacturer has got anything in our segment," he said.
Tesla's strong fourth-quarter sales gain comes after its third-quarter deliveries disappointed some analysts because of capacity constraints. The company has said results for its fiscal fourth quarter would be about the same as the third quarter. It posted a net loss of $38 million in the third quarter.
Credit: By Colum Murphy and Mike Ramsey
Subject: Automobile industry; Automobile sales; Expansion; Electric vehicles; Service stations
Location: United States--US Europe China
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9180: International; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.6
Publication year: 2014
Publication date: Jan 15, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1477541939
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1477541939?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Repro duced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla in China to Charge $120,000 for Model S; Price Puts Electric Car in Middle of the Pack for Luxury Vehicles
Author: Murphy, Colum
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Jan 2014: n/a.
ProQuest document link
Abstract:
SHANGHAI--Tesla Motors Inc. is entering China's fast-growing auto market by taking aim at foreign luxury brands including BMW and Audi, offering its Model S electric vehicle here starting at $121,000.
Full text: SHANGHAI--Tesla Motors Inc. is entering China's fast-growing auto market by taking aim at foreign luxury brands including BMW and Audi, offering its Model S electric vehicle here starting at $121,000.
Industry watchers say the upscale strategy is unproven in a nascent market where electric cars are modestly marketed and priced, and where the Tesla brand name is little-known. The company, based in Palo Alto, Calif., also is entering a market where electric-car sales haven't lived up to government projections.
On Thursday the company said it would begin sales of its Model S with an 85-kilowatt-hour battery pack starting at 734,000 yuan. The price essentially is the U.S. price plus Chinese taxes, duties and transportation costs.
"We're betting on doing the right thing and that consumers recognize...that we're not taking advantage of them," said Tesla Chief Executive Elon Musk. He said he would consider it a success if Tesla sold 5,000 vehicles or more in China this year.
Chinese-made electric cars, a small market, sell for far less. Chinese auto makers such as BYD Co. sell electric vehicles for up to 200,000 yuan, after central and local government subsidies. Foreign-brand electric cars don't qualify for such subsidies.
As it does elsewhere, Tesla plans to go head-to-head against mainly gasoline-fueled marques such as Volkswagen AG's Audi and BMW AG. The price puts the Tesla in the middle of luxury cars in China. BMW's 5 Series GT starts at about 738,000 yuan.
Mr. Musk said Tesla could have charged more for the Model S and risks losing some consumers who might equate a higher price with better value.
His goal is to expand coverage in Greater China to six metropolitan areas this year, with multiple outlets in each area. That includes Hong Kong, where Tesla already has an presence.
Audi, the largest foreign luxury-car brand in China by sales, declined to comment.
A BMW spokesman said models sold in different countries had different product features to better meet local customer needs, which can affect prices. "In general, the vehicle equipment level for Chinese models is higher than the products in other markets," he said.
Tesla is pushing into a plug-in electric-car market that is slow out of the gate. Last year, 14,604 pure electric vehicles were sold in China, up from 11,375 a year earlier. China is still far short of reaching its goal of having 500,000 hybrid and electric cars on its roads by next year and five million by 2020.
China's government has been pushing electric vehicles as a way to reduce pollution but has been largely unsuccessful because of the difficulties of building charging networks. China hopes to have 400,000 charging stations by next year but work is behind schedule.
Tesla said it is building a network of free charging stations in China, allowing owners to travel longer distances, such as between Beijing and Shanghai.
As Daimler AG's Mercedes-Benz and fellow German luxury brands Audi, and BMW increase production in China to at least 60% of total sales, their cars are becoming more affordable since they are no longer subject to import tariffs and some other taxes. A small luxury car, such as the China-made Audi Q3 compact sport-utility vehicle, sells for 285,000 yuan, according to the auto maker's website.
Zhang Dawei, founder of EV Buy, a Shanghai company that buys and services electric cars, called Tesla's pricing strategy "very aggressive" and "competitive." Still, Tesla has a short history in China, and electric cars remain an emerging business, he said. "Tesla has barriers to overcome in China. The lower price might mitigate Tesla's newcomer status."
General Motors Co.'s Chevrolet Volt sells for 498,000 yuan. A spokeswoman for GM said the company didn't plan for Volt to be a high-volume vehicle because of the costs associated with importing such a high-tech vehicle.
In China, as in the U.S., the Tesla Model S will appeal to "trophy" buyers, said Ashvin Chotai, a managing director at consulting firm Intelligence Automotive Asia. "There are enough millionaires in Beijing, Shanghai, Guangzhou and other large cities to snap up some models," he said. "The key will be how confident they feel about charging and general maintenance."
Buyers in China have been able to order the Model S and the coming Model X online since August with a 250,000 yuan down payment.
Tesla has one showroom and one service-and-sales location in Beijing.
Write to Colum Murphy at
Credit: By Colum Murphy
Subject: Electric vehicles; Automobile industry; Subsidies; Automobile sales
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Daimler AG; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Jan 23, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1491049102
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1491049102?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Motors Apologizes for Technical Glitches in Norway; Charging Issues Now 95% Solved, Spokesman Says
Author: Zander, Christina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2014: n/a.
ProQuest document link
Abstract:
According to spokesman Esben Pedersen, "less than 10%" of customers have experienced problems.
Full text: Elon Musk, the head of U.S. electric-car company Tesla Motors Inc., apologized to customers in Norway--the company's No. 2 market--for technical glitches that made it hard for owners to charge their cars.
"I'd like to extend my apologies," Mr. Musk, founder of the California auto maker, said at a meeting over the weekend with more than 1,000 customers in Oslo on Saturday. "I know there's been some charging issues."
The meeting was broadcast on Norway's Teknisk Ukeblad Media A/S's technology news website, tu.no, and confirmed by a Tesla spokesman on Monday.
Norway is Tesla's biggest market outside of the U.S. with 2,100 registered Tesla vehicles. Tesla's Model S sedan went on sale in Norway in August and was the market's best seller in September amid favorable government incentives for electric-vehicle buyers and high fuel prices.
Other electric vehicles have also been popular in Norway, including the Nissan Leaf. Although it is a very small market, Norway has been held up as a template for what the rest of the world needs to do to jump-start electric-car sales.
Tesla's launch hasn't been entirely flawless. In Norway some customers have had trouble lately charging their cars as the Norwegian version of the Tesla Universal Mobile Connector, or UMC, adapter didn't interact properly with the Norwegian grid. According to spokesman Esben Pedersen, "less than 10%" of customers have experienced problems.
While on tour in Europe, Mr. Musk made a stop in Oslo to meet with customers. Mr. Musk said the Tesla UMC adapter didn't function properly because simulations of the Norwegian grid back in California hadn't been detailed enough. He said an update of the adapter's software had taken care of most of the issues, but insisted Tesla wouldn't rest until "everything was perfect."
Mr. Pedersen said the charging issues are now "95% solved." "We expect some customers will still experience issues, but we are now in contact with everyone involved," he said.
Tesla, founded in 2003, only produces electrical vehicles. Its first model was the Tesla Roadster sports car, produced until 2011. Today the company only produces the Tesla S model, a five-door sedan. A crossover utility vehicle, the Model X, is planned for end 2014 or early 2015.
During the meeting, Mr. Musk reiterated a plan to install more so-called superchargers in Europe, which allow Tesla customers to power up their vehicles at high-speed charging stations for free.
Credit: Christina Zander
Subject: Research & development--R & D; Automobile industry; Vehicles; Meetings
Location: California United States--US Norway Europe
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Feb 3, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1493804507
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1493804507?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
California's Auto-Emissions Policy Hits a Tesla Pothole; Credits for electric vehicles have the ultimate effect of reducing overall fuel economy.
Author: Knittel, Christopher
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Feb 2014: n/a.
ProQuest document link
Abstract:
While Adam Smith may have been one of the first to understand this, he could not have possibly foreseen the morass of expensive and unwanted consequences that could come from conflicting emission and fuel standards enacted by the state of California and federal programs, such as for greenhouse gases and Corporate Average Fuel Economy. [...]each time an electric car is sold, the average fuel economy of all regular vehicles sold is allowed to decrease by more than the reduction that could be credited to an extra electric vehicle on the road. Because electric cars garner double credits.
Full text: It is a basic tenet of economics that regulations almost always have unintended consequences. While Adam Smith may have been one of the first to understand this, he could not have possibly foreseen the morass of expensive and unwanted consequences that could come from conflicting emission and fuel standards enacted by the state of California and federal programs, such as for greenhouse gases and Corporate Average Fuel Economy.
Both the state and federal regulations have worthy goals: to decrease greenhouse-gas emissions and lower petroleum consumption. Yet taken together, the federal standards effectively cancel out the California standard. Instead of promoting fuel reduction as intended, the California standard allows for the production of less-efficient vehicles, while facilitating a massive transfer of cash via credit trading. It also forms a de facto industrial policy that sends us down a path toward electric vehicles that may or may not be the best technological or environmental choice for the future.
These are complicated regulations, so let me explain:
The State of California Zero Emission Vehicle (ZEV) standard requires a certain percentage of an auto maker's California sales to be zero-tailpipe-emission vehicles. For 2014 this requirement is about 1% of sales; the percentage is expected to ramp up to 16% in 2015. In principle, these sales can be either electric vehicles or some other technology such as hydrogen fuel-cell vehicles, but currently electric vehicles are the only real option.
If a manufacturer doesn't meet this standard, it must buy zero-emission-vehicle credits from a manufacturer that has a surplus of credits. Tesla, for example, makes only electric vehicles and therefore has a surplus of credits. General Motors was a major buyer of credits in 2013, purchasing over 300 zero-emission credits and over 500 "partial" credits. These numbers will continue to increase as the zero-emission mandate becomes more stringent.
The zero-emission mandate thus creates large transfers of wealth across automobile manufacturers. The beneficiaries of these transfers are companies selling more than their "fair share" of electric cars. For example, each Model S that Tesla sells generates seven zero-emission-vehicle credits that Tesla can sell to auto makers that are not selling their fair share. Recently, these credits sold for $5,000 each, bringing Tesla $35,000 in extra revenue for each Model S sold. Nissan (the Leaf) and Toyota (plug-in Prius) have also generated credits. On the other side of the ledger, companies selling few electric vehicles must raise the prices of their vehicles to pay for the zero-emission mandate.
The California policy is then superimposed on the federal standards, which require that the average fuel economy across a manufacturer's entire fleet of U.S. vehicles exceeds federally mandated standards for greenhouse-gas emissions and fuel economy. For example, the 2016 target requires that the average fuel-economy rating per vehicle across all manufacturers be 35.5 miles per gallon.
There are, however, a number of features that complicate this rule. For example, federal standards give special double credits for each electric vehicle a manufacturer produces. Given this feature, the end result of adding California's zero-emission-vehicle program to the federal standards is to reduce overall fuel economy--precisely the opposite of what was intended.
Here's how this works: Ignoring all other special credits under the federal program, if no electric vehicles were sold, average fuel economy in 2016 would be exactly equal to 35.5 mpg. However, each time an electric car is sold, the average fuel economy of all regular vehicles sold is allowed to decrease by more than the reduction that could be credited to an extra electric vehicle on the road. Why? Because electric cars garner double credits. Admittedly, the reduction in fuel economy is likely to be small, but what is important is that fuel economy moves in the wrong direction.
To be sure, supporters of the zero-emission-vehicle mandate may contend that there is another, more advantageous unintended consequence. They argue that these rules are promoting innovation in new technologies and new types of cars. Yet even if that were true, I would argue that there are better ways to promote innovation in the auto industry. The current process is flawed because it forces investment in a technology that may not end up being the ultimate winner.
Focusing on zero tailpipe-emitting vehicles overlooks an excellent alternative because policy makers are suffering from something that many in the industry believe consumers suffer from: Miles Per Gallon Illusion. MPG Illusion is when consumers do not realize that increasing fuel economy from 15 mpg to 20 mpg saves much more gasoline than going from 45 mpg to 50 mpg, because the former increase represents much a larger percentage. In other words, for someone driving 15,000 miles a year, the 45-to-50 mpg jump saves only 33 gallons a year, while the 15-to-20 rise saves 250 gallons. While the zero-emissions mandate may shift some Prius buyers to an electric car, the best option for reducing petroleum consumption and greenhouse-gas emission is shifting a large SUV buyer into a less-large SUV.
The government needs to be in the business of setting overall environmental goals and standards on both the state and federal levels that make sense both separately and together, not a confusing, conflicting set of rules. And it needs to get out of the business of picking market winners and losers.
Mr. Knittel is the William Barton Rogers Professor of Energy and professor of applied economics at the MIT Sloan School of Management.
Credit: Christopher Knittel
Subject: Electric vehicles; Energy efficiency; Automobile industry; Automobile sales; Industrial policy
Location: California
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Feb 14, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1498142480
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1498142480?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Cross Country: California's Auto-Emissions Policy Hits a Tesla Pothole
Author: Knittel, Christopher
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Feb 2014: A.15.
ProQuest document link
Abstract:
While Adam Smith may have been one of the first to understand this, he could not have possibly foreseen the morass of expensive and unwanted consequences that could come from conflicting emission and fuel standards enacted by the state of California and federal programs, such as for greenhouse gases and Corporate Average Fuel Economy. [...]each time an electric car is sold, the average fuel economy of all regular vehicles sold is allowed to decrease by more than the reduction that could be credited to an extra electric vehicle on the road. Because electric cars garner double credits.
Full text: It is a basic tenet of economics that regulations almost always have unintended consequences. While Adam Smith may have been one of the first to understand this, he could not have possibly foreseen the morass of expensive and unwanted consequences that could come from conflicting emission and fuel standards enacted by the state of California and federal programs, such as for greenhouse gases and Corporate Average Fuel Economy.
Both the state and federal regulations have worthy goals: to decrease greenhouse-gas emissions and lower petroleum consumption. Yet taken together, the federal standards effectively cancel out the California standard. Instead of promoting fuel reduction as intended, the California standard allows for the production of less-efficient vehicles, while facilitating a massive transfer of cash via credit trading. It also forms a de facto industrial policy that sends us down a path toward electric vehicles that may or may not be the best technological or environmental choice for the future.
These are complicated regulations, so let me explain:
The State of California Zero Emission Vehicle (ZEV) standard requires a certain percentage of an auto maker's California sales to be zero-tailpipe-emission vehicles. For 2014 this requirement is about 1% of sales; the percentage is expected to ramp up to 16% in 2015. In principle, these sales can be either electric vehicles or some other technology such as hydrogen fuel-cell vehicles, but currently electric vehicles are the only real option.
If a manufacturer doesn't meet this standard, it must buy zero-emission-vehicle credits from a manufacturer that has a surplus of credits. Tesla, for example, makes only electric vehicles and therefore has a surplus of credits. General Motors was a major buyer of credits in 2013, purchasing over 300 zero-emission credits and over 500 "partial" credits. These numbers will continue to increase as the zero-emission mandate becomes more stringent.
The zero-emission mandate thus creates large transfers of wealth across automobile manufacturers. The beneficiaries of these transfers are companies selling more than their "fair share" of electric cars. For example, each Model S that Tesla sells generates seven zero-emission-vehicle credits that Tesla can sell to auto makers that are not selling their fair share. Recently, these credits sold for $5,000 each, bringing Tesla $35,000 in extra revenue for each Model S sold. Nissan (the Leaf) and Toyota (plug-in Prius) have also generated credits. On the other side of the ledger, companies selling few electric vehicles must raise the prices of their vehicles to pay for the zero-emission mandate.
The California policy is then superimposed on the federal standards, which require that the average fuel economy across a manufacturer's entire fleet of U.S. vehicles exceeds federally mandated standards for greenhouse-gas emissions and fuel economy. For example, the 2016 target requires that the average fuel-economy rating per vehicle across all manufacturers be 35.5 miles per gallon.
There are, however, a number of features that complicate this rule. For example, federal standards give special double credits for each electric vehicle a manufacturer produces. Given this feature, the end result of adding California's zero-emission-vehicle program to the federal standards is to reduce overall fuel economy -- precisely the opposite of what was intended.
Here's how this works: Ignoring all other special credits under the federal program, if no electric vehicles were sold, average fuel economy in 2016 would be exactly equal to 35.5 mpg. However, each time an electric car is sold, the average fuel economy of all regular vehicles sold is allowed to decrease by more than the reduction that could be credited to an extra electric vehicle on the road. Why? Because electric cars garner double credits. Admittedly, the reduction in fuel economy is likely to be small, but what is important is that fuel economy moves in the wrong direction.
To be sure, supporters of the zero-emission-vehicle mandate may contend that there is another, more advantageous unintended consequence. They argue that these rules are promoting innovation in new technologies and new types of cars. Yet even if that were true, I would argue that there are better ways to promote innovation in the auto industry. The current process is flawed because it forces investment in a technology that may not end up being the ultimate winner.
Focusing on zero tailpipe-emitting vehicles overlooks an excellent alternative because policy makers are suffering from something that many in the industry believe consumers suffer from: Miles Per Gallon Illusion. MPG Illusion is when consumers do not realize that increasing fuel economy from 15 mpg to 20 mpg saves much more gasoline than going from 45 mpg to 50 mpg, because the former increase represents much a larger percentage. In other words, for someone driving 15,000 miles a year, the 45-to-50 mpg jump saves only 33 gallons a year, while the 15-to-20 rise saves 250 gallons. While the zero-emissions mandate may shift some Prius buyers to an electric car, the best option for reducing petroleum consumption and greenhouse-gas emission is shifting a large SUV buyer into a less-large SUV.
The government needs to be in the business of setting overall environmental goals and standards on both the state and federal levels that make sense both separately and together, not a confusing, conflicting set of rules. And it needs to get out of the business of picking market winners and losers.
---
Mr. Knittel is the William Barton Rogers Professor of Energy and professor of applied economics at the MIT Sloan School of Management.
(See related letters: "Letters to the Editor: No Tesla Pothole in the Golden State" -- WSJ February 24, 2014)
Credit: By Christopher Knittel
Subject: Electric vehicles; Energy efficiency; Automobile industry; Automobile sales; Industrial policy; Emission standards
Location: California
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390
Classification: 8680: Transportation equipment industry; 1540: Pollution control; 4310: Regulation
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.15
Publication year: 2014
Publication date: Feb 15, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1498213826
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1498213826?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Projects Big Increase in Production; Luxury Electric-Car Maker Expects to Deliver 35,000 Vehicles in 2014
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Feb 2014: n/a.
ProQuest document link
Abstract:
The results--and Mr. Musk's bullish outlook for sales of the current Model S electric sedan and a future Model X electric sport-utility vehicle--boosted Tesla's shares by 12% to $216.67 in after-hours trading. Tesla is using its Supercharger network--high-voltage charging locations--to lower the inhibitions of people who want to trade their gasoline-fueled vehicles for an electric car.
Full text: Tesla Motors Inc. had a wildly successful run as a niche auto maker over the past year, capped by fourth quarter results that exceeded its projections. Now, Chief Executive Elon Musk must navigate the even trickier road to becoming a high-volume, global player.
The Palo Alto, Calif., maker of $70,000 and up electric cars on Wednesday said it had a net loss of $16.2 million for the final quarter of 2013. Factoring out non-cash executive compensation and other costs, the company said it had a profit of $46 million, and generated $40 million in free cash flow, a sign that it is making money from building cars.
Revenue soared to $615.2 million from $306.3 million in the same quarter a year earlier.
The results--and Mr. Musk's bullish outlook for sales of the current Model S electric sedan and a future Model X electric sport-utility vehicle--boosted Tesla's shares by 12% to $216.67 in after-hours trading. That was on top of a run that has quadrupled the Silicon Valley company's share value in the past year, and made it more valuable than the much larger Fiat Chrysler Automobiles NV.
Tesla sold some 22,000 vehicles in 2013. This year, the company is forecasting sales of 35,000 Model S sedans. By the middle of this year, Mr. Musk said, the company expects to refit its factory to be able to build as many as 1,000 cars a week--implying annual production of close to 50,000 cars. Tesla said orders for its second vehicle are strong.
"The fish are jumping in the boat," Mr. Musk said. Tesla's stock of $5,000-a-car reservations grew to $163 million at year-end from $139 million a year earlier.
Within a decade, Tesla's goal is to produce half a million vehicles a year. That would push it past well-established auto makers like JaguarLand Rover and Porsche.
To get there, Tesla will have to bolster its parts suppliers, expand its factory in Fremont, Calif., and pour money into what Mr. Musk calls a "GigaFactory" to produce more battery packs. Mr. Musk said he would disclose his plan for building that battery plant next week. Tesla has an agreement with battery maker Panasonic to provide 2 billion cells to Tesla through 2017, but that won't be enough, Mr. Musk said.
Tesla will also have to contend with challenges from franchised dealers who are fighting its effort to expand its direct sales network beyond the coasts.
The short-term challenge for Tesla is ramping up its production to meet demand and finishing its coming Model X. Mr. Musk said that many of its suppliers simply didn't expect the company to sell as many vehicles as it has, and weren't prepared to meet demand.
Suppliers' output may be the biggest hurdle, said Tom Lasorda, the former president of Chrysler LLC, who also ran the now closed Fisker Automotive Inc. for about six months. "Getting their production up to 60,000 from where they are is relatively simple," he said. "The biggest challenge is can their supply base grow with them."
Tesla likely will have to invest in a big expansion of its production operations to build its "Gen-3" vehicle, a promised $35,000 sedan that can go 200 miles on a charge. That model is expected to launch in 2017.
Deutsche Bank analyst Dan Galves said Tesla should be able to pay for the expansion of the plant and development of its next model from its cash reserves. Still, raising more capital shouldn't be a problem if it is needed, he said.
Mr. Musk told analysts the company may need to raise money to build a battery factory, though he didn't commit to it.
"The car business is truly, staggeringly big," Mr. Musk told analysts during a conference call. "There is just a pretty big ramp up in terms of investment."
Among the uncertainties Mr. Musk must manage is the long term demand for the Model S.
"It's difficult to predict where the demand settles out with the S," he said. He said he expects Model S demand can be sustained at production levels of about 1,000 cars a week and that Model X demand could exceed that figure.
Tom Libby, a sales forecasting analyst with IHS Automotive, said the question is whether demand will continue to be strong as Tesla adds new models, or if the same pool of customers will be spread over more vehicles.
"It is extremely hard to forecast their volumes," he said. "They have been an aberration in that they have done well compared to other EVs."
Tesla is using its Supercharger network--high-voltage charging locations--to lower the inhibitions of people who want to trade their gasoline-fueled vehicles for an electric car. The electricity is free to Tesla owners and Tesla is spreading the locations around the U.S. It announced Wednesday the addition of free high-speed data connections and Internet radio to customers for four years.
So far, Tesla has avoided selling its cars through independent dealers. Tesla also doesn't use traditional advertising to sell its vehicles. But both could change someday.
"We aren't spending millions and millions of dollars on media production and media buy because we haven't had to," said Diarmuid O'Connell, Tesla's vice president of business development. "Will it be enough in the future? Who knows?"
Corrections & Amplifications Tesla's fourth quarter revenue was $615.2 million and it forecast first-quarter deliveries of 6,400 vehicles. An earlier version of this article incorrectly said revenue was $611 million and it would deliver 7,400 cars.
Credit: Mike Ramsey
Subject: Automobile industry; Financial performance; Vehicles; Net losses; Automobile sales; Executive compensation
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Fiat Chrysler Automobiles NV; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Feb 19, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1499900034
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1499900034?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Tesla Opens Production Throttle
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Feb 2014: B.2.
ProQuest document link
Abstract:
The results -- and Mr. Musk's bullish outlook for sales of the current Model S electric sedan and a future Model X electric sport-utility vehicle -- boosted Tesla's shares by 12% to $216.67 in after-hours trading.
Full text: Tesla Motors Inc. had a wildly successful run as a niche auto maker over the past year, capped by fourth quarter results that exceeded its projections. Now, Chief Executive Elon Musk must navigate the even trickier road to becoming a high-volume, global player.
The Palo Alto, Calif., maker of $70,000 and up electric cars on Wednesday said it had a net loss of $16.2 million for the final quarter of 2013. Factoring out non-cash executive compensation and other costs, Tesla said it earned $46 million, and generated $40 million in free cash flow, a sign that it is making money from building cars.
Revenue soared to $615.2 million from $306.3 million in the same quarter a year earlier.
The results -- and Mr. Musk's bullish outlook for sales of the current Model S electric sedan and a future Model X electric sport-utility vehicle -- boosted Tesla's shares by 12% to $216.67 in after-hours trading. That was on top of a run that has quadrupled the Silicon Valley company's share value in the past year, and made it more valuable than the much larger Fiat Chrysler Automobiles NV.
Tesla sold some 22,000 vehicles in 2013. This year, the company is forecasting sales of 35,000 Model S sedans. By the middle of this year, Mr. Musk said, the company expects to refit its factory to be able to build as many as 1,000 cars a week -- implying annual production of close to 50,000 cars. Tesla said orders for its second vehicle are strong.
To get there, Tesla will have to bolster its parts suppliers, expand its factory in Fremont, Calif., and pour money into what Mr. Musk calls a "GigaFactory" to produce more battery packs. Mr. Musk said he would disclose his plan for building that battery plant next week. Tesla has an agreement with battery maker Panasonic to provide 2 billion cells to Tesla through 2017, but that won't be enough, Mr. Musk said.
Tesla will also have to contend with challenges from franchised dealers who are fighting its effort to expand its direct sales network beyond the coasts.
The short-term challenge for Tesla is ramping up its production to meet demand and finishing its coming Model X. Mr. Musk said that many of its suppliers simply didn't expect the company to sell as many vehicles as it has, and weren't prepared to meet demand.
Suppliers' output may be the biggest hurdle, said Tom Lasorda, the former president of Chrysler LLC, who also ran the now closed Fisker Automotive Inc. for about six months. "Getting their production up to 60,000 from where they are is relatively simple," he said. "The biggest challenge is can their supply base grow with them."
Deutsche Bank analyst Dan Galves said Tesla should be able to pay for the expansion of the plant and development of its next model from its cash reserves. Still, raising more capital shouldn't be a problem if it is needed, he said.
Mr. Musk told analysts the company may need to raise money to build a battery factory, though he didn't commit to it.
Among the uncertainties Mr. Musk must manage is the long term demand for the Model S.
"It's difficult to predict where the demand settles out with the S," he said. He said he expects Model S demand can be sustained at production levels of about 1,000 cars a week and that Model X demand could exceed that figure.
Tom Libby, a sales forecasting analyst with IHS Automotive, said the question is whether demand will continue to be strong as Tesla adds new models, or if the same pool of customers will be spread over more vehicles.
Tesla is using its Supercharger network -- high-voltage charging locations -- to lower the inhibitions of people who want to trade their gasoline-fueled vehicles for an electric car. The electricity is free to Tesla owners and Tesla is spreading the locations around the U.S. It announced Wednesday the addition of free high-speed data connections and Internet radio to customers for four years.
So far, Tesla has avoided selling its cars through independent dealers. Tesla also doesn't use traditional advertising to sell its vehicles. But both could change someday.
Credit: By Mike Ramsey
Subject: Automobile industry; Net losses; Automobile sales; Sales forecasting; Company reports
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry; 3100: Capital & debt management
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2014
Publication date: Feb 20, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1500222591
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1500222591?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, In c. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
No Tesla Pothole in the Golden State; To achieve both federal air-quality standards and climate goals, we need vehicles that achieve zero or near-zero tailpipe emissions.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Feb 2014: n/a.
ProQuest document link
Abstract:
Regarding Christopher Knittel's "California's Auto-Emissions Policy Hits a Tesla Pothole" (Cross Country, Feb. 15): To achieve both federal air-quality standards and climate goals in a time frame that is consistent with science, we need vehicles that achieve zero or near-zero tailpipe emissions with the potential for reducing total life-cycle emissions by 80% or more.
Full text: Regarding Christopher Knittel's "California's Auto-Emissions Policy Hits a Tesla Pothole" (Cross Country, Feb. 15): To achieve both federal air-quality standards and climate goals in a time frame that is consistent with science, we need vehicles that achieve zero or near-zero tailpipe emissions with the potential for reducing total life-cycle emissions by 80% or more. Only plug-in electric and fuel-cell vehicles--targeted by California's zero-emission vehicle program--have these characteristics.
Many studies, including from the National Academies, show that these vehicle technologies have the potential to be cost-effective to consumers and provide large public and private benefits. Achieving this potential will require investment and public/private coordination.
Prof. Knittel implies that the ZEV program is picking winners. This is largely false. It is a performance standard, and while it is true that this applies only to the tailpipe, California has adopted a suite of other policies to reduce the emissions from electricity and hydrogen production, the fuels for these vehicles. Surprisingly, Prof. Knittel disparages market features of the program that provide flexibility to allow firms to trade among themselves and pursue strategies that are the most cost-effective.
While even 15% of vehicle sales in 2025 may be ambitious, the auto industry has repeatedly shown itself capable of impressive innovation when motivated and supported by sound policy and when it puts its best engineers to the challenge.
Anthony R. Eggert
Daniel Sperling
University of
California, Davis
Davis, Calif.
Having spent my fair share of time sitting in California traffic--and thereby achieving very low actual MPG figures--I think the Golden State would be better served in working on some societal means to truly achieve the exemplary numbers it continues to strive for by spending some time figuring out how to keep the cars moving.
John Fischer
Palatine, Ill.
Subject: Emissions; Automobile industry; Fuel cells; Vehicles
Location: California
Company / organization: Name: National Academies; NAICS: 541711
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Feb 23, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1501145850
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1501145850?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Stree t Journal
No Tesla Pothole in the Golden State
Author: Anonymous
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 Feb 2014: A.14.
ProQuest document link
Abstract:
Regarding Christopher Knittel's "California's Auto-Emissions Policy Hits a Tesla Pothole" (Cross Country, Feb. 15): To achieve both federal air-quality standards and climate goals in a time frame that is consistent with science, we need vehicles that achieve zero or near-zero tailpipe emissions with the potential for reducing total life-cycle emissions by 80% or more.
Full text: Regarding Christopher Knittel's "California's Auto-Emissions Policy Hits a Tesla Pothole" (Cross Country, Feb. 15): To achieve both federal air-quality standards and climate goals in a time frame that is consistent with science, we need vehicles that achieve zero or near-zero tailpipe emissions with the potential for reducing total life-cycle emissions by 80% or more. Only plug-in electric and fuel-cell vehicles -- targeted by California's zero-emission vehicle program -- have these characteristics.
Many studies, including from the National Academies, show that these vehicle technologies have the potential to be cost-effective to consumers and provide large public and private benefits. Achieving this potential will require investment and public/private coordination.
Prof. Knittel implies that the ZEV program is picking winners. This is largely false. It is a performance standard, and while it is true that this applies only to the tailpipe, California has adopted a suite of other policies to reduce the emissions from electricity and hydrogen production, the fuels for these vehicles. Surprisingly, Prof. Knittel disparages market features of the program that provide flexibility to allow firms to trade among themselves and pursue strategies that are the most cost-effective.
While even 15% of vehicle sales in 2025 may be ambitious, the auto industry has repeatedly shown itself capable of impressive innovation when motivated and supported by sound policy and when it puts its best engineers to the challenge.
Anthony R. Eggert
Daniel Sperling
University of
California, Davis
Davis, Calif.
---
Having spent my fair share of time sitting in California traffic -- and thereby achieving very low actual MPG figures -- I think the Golden State would be better served in working on some societal means to truly achieve the exemplary numbers it continues to strive for by spending some time figuring out how to keep the cars moving.
John Fischer
Palatine, Ill.
Subject: Emissions; Automobile industry; Fuel cells; Vehicles
Location: California
Company / organization: Name: National Academies; NAICS: 541711
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.14
Publication year: 2014
Publication date: Feb 24, 2014
Section: Letters to the Editor
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1501334587
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1501334587?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla's Battery Ambitions Gets Stock Jumping; Auto Maker's Hopes for Battery-Production With Panasonic Excites Investors
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Feb 2014: n/a.
ProQuest document link
Abstract:
Reno is home to a startup lithium mining-and-production operation owned by Western Lithium USA Corp. The miner is developing a pilot plant to create lithium carbonate, a key ingredient in making lithium-ion batteries.
Full text: Tesla Motors Inc. shares hit a record high of $248 on Tuesday ahead of an expected announcement of a battery-production partnership in which the company would carve out a business making advanced batteries for itself and others.
Panasonic Corp., now the primary battery supplier for Tesla's $71,000-and-up electric cars, is in talks about investing in a nearly $1 billion battery factory in the U.S., according to Japanese business newspaper the Nikkei. Panasonic said in a statement it was "considering various options to strengthen our ties" with Tesla.
Panasonic shares were up 7% in early trading in Tokyo on Wednesday.
Tesla this week is expected to announce with corporate partners a plan to build a factory that would produce finished batteries from raw materials instead of components, lowering its costs.
A Tesla spokeswoman declined to comment on plans for what it calls its battery "gigafactory" or on the potential for Panasonic as a potential investor.
Morgan Stanley auto analyst Adam Jonas said in a note on Tuesday the company "could become the world's largest producer of Li-ion batteries" based solely on its own automotive needs. He said Tesla could also supply batteries for energy storage for electric power suppliers.
He put a target price of $320 a share on the Palo Alto, Calif., electric car maker, saying it has the potential to upend two existing industries--autos and electric power. Its shares were up 14% at 4 p.m. on Tuesday, giving the company a $30.5 billion market value.
Tesla Chief Executive Elon Musk is chairman of SolarCity Corp., a solar energy provider that now offers Tesla battery packs to users of its solar arrays. The battery packs store energy for use during peak demands or nighttime use.
Tesla now operates from a 370-acre manufacturing site in Fremont, Calif., that is less than fully used.
Earlier this month, Mr. Musk told analysts during a conference call that he intends to work with several others, including "precursor" suppliers to complete its vision of a factory that takes in metal ores and produces finished batteries in the same way that Henry Ford's River Rouge factory originally made its own steel for cars.
Mr. Musk has said the company would need its own supply of batteries to produce its third-generation electric vehicle, now expected in 2017. That vehicle would target the broader sedan market with a 200-mile range and a starting price of $35,000.
Tesla's goal is to reduce the cost of lithium-ion battery packs below $200 a kilowatt-hour, Morgan Stanley estimates. Argonne National Laboratories calculates other lithium-ion batteries cost about $500 a kilowatt-hour to manufacturing. Tesla maintains its costs are lower than others, but hasn't disclosed its production costs.
Mr. Musk hasn't said how the company would finance construction of a new factory. He did tell analysts that a secondary stock offering for a new plant and other uses was "a good idea. I think that would be the smart move."
Recently, officials in Reno, Nev., told a local newspaper that Tesla officials had scouted the area as a possible location for a battery plant. A person familiar with the situation said Tesla officials are considering the Reno area for its plant, but didn't have other details. Reno is home to a startup lithium mining-and-production operation owned by Western Lithium USA Corp. The miner is developing a pilot plant to create lithium carbonate, a key ingredient in making lithium-ion batteries.
Jay Chmelauskas, Western Lithium's chief executive, said his company's intention is to become a major supplier of lithium to U.S. battery manufacturers. When asked whether Western could be a provider to the "gigafactory," he said "we have the right address," without confirming discussions with Tesla, specifically.
Credit: Mike Ramsey
Subject: Lithium; Manufacturing; Costs; Automobiles; Electric power; Suppliers
Location: United States--US
People: Musk, Elon
Company / organization: Name: SolarCity Corp; NAICS: 238220, 333414; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Feb 25, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1501635237
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1501635237?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Model S Selected Consumer Reports' Best Overall Vehicle; Japanese Brands, Which Have Historically Dominated the List, Took Only Five Spots
Author: Bennett, Jeff
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Feb 2014: n/a.
ProQuest document link
Abstract:
Consumer Reports rated Tesla Motor Co.'s Model S as the best overall vehicle to buy in its annual top 10 list, which also included a Chrysler Group LLC product for the first time in 16 years.
Full text: Consumer Reports rated Tesla Motor Co.'s Model S as the best overall vehicle to buy in its annual top 10 list, which also included a Chrysler Group LLC product for the first time in 16 years.
The magazine bestowed the top honor on the electric-powered luxury vehicle based on its "blistering acceleration" and "razor-sharp handling" although the car retails for more than $89,000 and Tesla sold fewer than 23,000 of the vehicles last year.
The results come the same day Tesla's shares jumped 16% after Wall Street analyst Adam Jonas said the company warrants a share price of $320. Tesla is expected this week to announce plans to build a new battery factory along with partners that will be able to take raw materials in on one side and produce batteries out the other side, lowering the cost of battery cells. Mr. Jonas thinks that the cell production has the potential to have Tesla become a major competitor in the electrical grid storage business.
Chrysler's Ram 1500, meanwhile, landed the best pickup truck spot, with the magazine saying the vehicle was "surprisingly refined and inviting." The last Chrysler vehicle to win a top pick spot was the 1998 Jeep Grand Cherokee.
"The competition in the marketplace has grown fierce," Consumer Reports automotive editor Rik Paul said in a statement. "There was a time when a handful of brands dominated our Top Picks list, but in recent years we have seen a more diverse group make the cut."
Japanese brands, which have historically taken more than 70% of the top spots since 1997, took only five spots, one of their worst showings in the 18-year history of the ranking.
Credit: Jeff Bennett
Subject: Automobile industry; Ratings & rankings
Company / organization: Name: Consumer Reports; NAICS: 511120; Name: Chrysler Group LLC; NAICS: 336111, 551112
Product name: Jeep Grand Cherokee
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Feb 25, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1501635273
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1501635273?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Corporate News: Tesla Lines Up Partners for Factory
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]26 Feb 2014: B.2.
ProQuest document link
Abstract:
Reno is home to a startup lithium mining-and-production operation owned by Western Lithium USA Corp. The miner is developing a pilot plant to create lithium carbonate, a key ingredient in making lithium-ion batteries.
Full text: Tesla Motors Inc. shares hit a record high of $248 on Tuesday ahead of an expected announcement of a battery-production partnership in which the company would carve out a business making advanced batteries for itself and others.
Panasonic Corp., now the primary battery supplier for Tesla's $71,000-and-up electric cars, is in talks about investing in a nearly $1 billion battery factory in the U.S., according to Japanese business newspaper the Nikkei. Panasonic said in a statement it was "considering various options to strengthen our ties" with Tesla.
Tesla this week is expected to announce with corporate partners a plan to build a factory that would produce finished batteries from raw materials instead of components, lowering its costs.
A Tesla spokeswoman declined to comment on plans for what it calls its battery "gigafactory" or on the potential for Panasonic as a potential investor.
Morgan Stanley auto analyst Adam Jonas said in a note on Tuesday the company "could become the world's largest producer of Li-ion batteries" based solely on its own automotive needs. He said Tesla could also supply batteries for energy storage for electric power suppliers.
He put a target price of $320 a share on the Palo Alto, Calif., electric car maker, saying it has the potential to upend two existing industries -- autos and electric power. Its shares were up 14% at 4 p.m. on Tuesday, giving the company a $30.5 billion market value.
Tesla Chief Executive Elon Musk is chairman of SolarCity Corp., a solar energy provider that now offers Tesla battery packs to users of its solar arrays. The battery packs store energy for use during peak demands or nighttime use.
Tesla now operates from a 370-acre manufacturing site in Fremont, Calif., that is less than fully used.
Earlier this month, Mr. Musk told analysts during a conference call that he intends to work with several others, including "precursor" suppliers to complete its vision of a factory that takes in metal ores and produces finished batteries in the same way that Henry Ford's River Rouge factory originally made its own steel for cars.
Mr. Musk has said the company would need its own supply of batteries to produce its third-generation electric vehicle, now expected in 2017. That vehicle would target the broader sedan market with a 200-mile range and a starting price of $35,000.
Tesla's goal is to reduce the cost of lithium-ion battery packs below $200 a kilowatt-hour, Morgan Stanley estimates. Argonne National Laboratories calculates other lithium-ion batteries cost about $500 a kilowatt-hour to manufacturing. Tesla maintains its costs are lower than others, but hasn't disclosed its production costs.
Mr. Musk hasn't said how the company would finance construction of a new factory. He did tell analysts that a secondary stock offering for a new plant and other uses was "a good idea. I think that would be the smart move."
Recently, officials in Reno, Nev., told a local newspaper that Tesla officials had scouted the area as a possible location for a battery plant. A person familiar with the situation said Tesla officials are considering the Reno area for its plant, but didn't have other details. Reno is home to a startup lithium mining-and-production operation owned by Western Lithium USA Corp. The miner is developing a pilot plant to create lithium carbonate, a key ingredient in making lithium-ion batteries.
Jay Chmelauskas, Western Lithium's chief executive, said his company's intention is to become a major supplier of lithium to U.S. battery manufacturers. When asked whether Western could be a provider to the "gigafactory," he said "we have the right address," without confirming discussions with Tesla, specifically.
---
Jim Carlton and Kana Inagaki contributed to this article.
Credit: By Mike Ramsey
Subject: Batteries; Investment policy; Factories; Partnerships
Location: United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 3400: Investment analysis & personal finance; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2014
Publication date: Feb 26, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1501808055
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1501808055?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Plans $5 Billion Battery Factory; Electric Car Maker Looking at Sites in Arizona, Nevada, New Mexico and Texas
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Feb 2014: n/a.
ProQuest document link
Abstract:
According to Navigant, in 2012 the entire lithium-ion battery industry produced just under 27 gigawatts of batteries, with most going to electronics applications such as laptop computers and mobile phones.
Full text: Electric car maker Tesla Motors Inc. said on Wednesday its proposed battery "Gigafactory" would cost up to $5 billion and allow it to sell as many as 500,000 vehicles a year.
The Palo Alto, Calif., company outlined plans for a factory that would employ up to 6,500 people and cover as many as 1,000 acres, including solar and wind farms to supply its power needs. It is evaluating sites in Nevada, New Mexico, Arizona and Texas, Tesla said in a regulatory filing.
The proposed 10 million-square-foot facility would make the powerful and pricey lithium-ion batteries that power its Model S and future vehicles. Tesla has said it needs its own production to meet expected demand and hit its cost target for a more affordable car.
Tesla said it would raise $1.6 billion through a bond issue to help finance construction. The auto maker said it would contribute $2 billion toward the proposed battery factory, which would also make storage batteries for electric utility uses. It estimated the plant's cost at between $4 billion and $5 billion with first production in 2017.
Tesla Chief Executive Elon Musk, who last November first raised the idea of a "Gigafactory" that takes in raw materials and produces finished batteries, has said he intends to build the factory with unidentified partners.
On Wednesday, Panasonic Corp. said it was "considering various options to strengthen our ties" with Tesla. Panasonic, the primary battery supplier for Tesla's Model S, is considering a nearly $1 billion investment with other Japanese suppliers in the battery factory. Tesla's announcement Wednesday didn't mention Panasonic.
Mr. Musk, who is chairman of SolarCity Corp., a solar energy provider that offers Tesla battery packs to users of its solar arrays, declined to comment through a spokeswoman. SolarCity's battery packs store electricity for use during peak demand or nighttime use.
When it reaches full production in 2020, the Gigafactory would produce more lithium-ion batteries than currently are produced today for all uses, the company said. At full capacity, it would produce 50 gigawatt-hours of battery packs a year.
Tesla expects that in its first year, the new factory would reduce its battery costs by more than 30%. First production is timed to coincide with deliveries of its first mass-market electric vehicle. That car is expected to travel 200 miles on a single charge and be priced starting at $35,000.
While electric-car manufacturers don't publicly disclose their battery costs, Dan Hearsch, a battery expert at consultants AlixPartners LP, said the average cost generally is around $400 a kilowatt-hour, though Tesla's may be lower.
Tesla is attempting to break through $200 a kilowatt-hour. At that price, the batteries are so relatively inexpensive that they become affordable as backup power supplies to the electric-power industry, said Sam Jaffe, an analyst at energy market researcher and consultants Navigant Research.
"If you get near $150 per kilowatt-hour, you really open up these batteries for static storage" which could be a new business for Panasonic, he said.
According to Navigant, in 2012 the entire lithium-ion battery industry produced just under 27 gigawatts of batteries, with most going to electronics applications such as laptop computers and mobile phones.
Mr. Jaffe said the size and proposed output of the Tesla factory would require an enormous amount of electricity and natural gas to operate. Tesla provided an artists rendering of the complex showing a large array of solar panels and wind turbines supplying energy to the operation. Mr. Musk has said his plan is to use renewable energy.
Goldman Sachs Group Inc., Morgan Stanley, J.P. Morgan Chase & Co. and Deutsche Bank AG are underwriters for the auto maker's debt issue.
Tesla's Fremont, Calif., assembly factory, which sits on a 370-acre site, is more than 5 million square feet. Tesla only uses a fraction of that plant today.
A person familiar with the discussions in Nevada said Tesla officials are considering the Reno area for the plant. Reno is home to a startup lithium mining-and-production operation owned by Western Lithium USA Corp. The miner is developing a pilot plant to create lithium carbonate, a key ingredient in making lithium-ion batteries.
Credit: Mike Ramsey
Subject: Lithium; Alternative energy sources; Batteries
Location: Arizona Texas Nevada Palo Alto California New Mexico
Company / organization: Name: SolarCity Corp; NAICS: 238220, 333414; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Feb 26, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1501991188
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1501991188?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Plans $5 Billion Car Battery Factory
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 Feb 2014: B.1.
ProQuest document link
Abstract:
According to Navigant, in 2012 the entire lithium-ion battery industry produced just under 27 gigawatts of batteries, with most going to electronics applications such as laptop computers and mobile phones.
Full text: Electric car maker Tesla Motors Inc. said on Wednesday its proposed battery "Gigafactory" would cost up to $5 billion and allow it to sell as many as 500,000 vehicles a year.
The Palo Alto, Calif., company outlined plans for a factory that would employ up to 6,500 people and cover as many as 1,000 acres, including solar and wind farms to supply its power needs. It is evaluating sites in Nevada, New Mexico, Arizona and Texas, Tesla said in a regulatory filing.
The proposed 10 million-square-foot facility would make the powerful and pricey lithium-ion batteries that power its Model S and future vehicles. Tesla has said it needs its own production to meet expected demand and hit its cost target for a more affordable car.
Tesla said it would raise $1.6 billion through a bond issue to help finance construction. The auto maker said it would contribute $2 billion toward the proposed battery factory, which would also make storage batteries for electric utility uses. It estimated the plant's cost at between $4 billion and $5 billion with first production in 2017.
Tesla Chief Executive Elon Musk, who last November first raised the idea of a "Gigafactory" that takes in raw materials and produces finished batteries, has said he intends to build the factory with unidentified partners.
On Wednesday, Panasonic Corp. said it was "considering various options to strengthen our ties" with Tesla. Panasonic, the primary battery supplier for Tesla's Model S, is considering a nearly $1 billion investment with other Japanese suppliers in the battery factory. Tesla's announcement Wednesday didn't mention Panasonic.
Mr. Musk, who is chairman of SolarCity Corp., a solar energy provider that offers Tesla battery packs to users of its solar arrays, declined to comment through a spokeswoman. SolarCity's battery packs store electricity for use during peak demand or nighttime use.
When it reaches full production in 2020, the Gigafactory would produce more lithium-ion batteries than currently are produced today for all uses, the company said. At full capacity, it would produce 50 gigawatt-hours of battery packs a year.
Tesla expects that in its first year, the new factory would reduce its battery costs by more than 30%. First production is timed to coincide with deliveries of its first mass-market electric vehicle. That car is expected to travel 200 miles on a charge and be priced starting at $35,000.
While electric-car manufacturers don't publicly disclose their battery costs, Dan Hearsch, a battery expert at consultants AlixPartners LP, said the average cost generally is around $400 a kilowatt-hour, though Tesla's may be lower.
Tesla is attempting to break through $200 a kilowatt-hour. At that price, the batteries are so relatively inexpensive that they become affordable as backup power supplies to the electric-power industry, said Sam Jaffe, an analyst at energy market researcher and consultants Navigant Research.
"If you get near $150 per kilowatt-hour, you really open up these batteries for static storage" which could be a new business for Panasonic, he said.
According to Navigant, in 2012 the entire lithium-ion battery industry produced just under 27 gigawatts of batteries, with most going to electronics applications such as laptop computers and mobile phones.
Mr. Jaffe said the size and proposed output of the Tesla factory would require an enormous amount of electricity and natural gas to operate. Tesla provided an artists rendering of the complex showing a large array of solar panels and wind turbines supplying energy to the operation. Mr. Musk has said his plan is to use renewable energy.
Goldman Sachs Group Inc., Morgan Stanley, J.P. Morgan Chase & Co. and Deutsche Bank AG are underwriters for the auto maker's debt issue.
Tesla's Fremont, Calif., assembly factory, which sits on a 370-acre site, is more than 5 million square feet. Tesla only uses a fraction of that plant today.
A person familiar with the discussions in Nevada said Tesla officials are considering the Reno area for the plant. Reno is home to a startup lithium mining-and-production operation owned by Western Lithium USA Corp. The miner is developing a pilot plant to create lithium carbonate, a key ingredient in making lithium-ion batteries.
---
Kana Inagaki contributed to this article.
Credit: By Mike Ramsey
Subject: Batteries; Site planning; Factories
Location: United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8650: Electrical & electronics industries; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2014
Publication date: Feb 27, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1502247239
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1502247239?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Test Your Prediction Skills; What's ahead for shares of Tesla Motors?
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Feb 2014: n/a.
ProQuest document link
Abstract: None available.
Full text: Send your prediction to crystalball@wsj.com by midnight EST Sunday, with your full name, city, state and phone number. The first reader who gets it right will be named in next Saturday's paper.
On Wednesday, electric-car maker Tesla Motors announced plans for a factory, with a price tag of up to $5 billion, that could produce as many as 500,000 cars a year. What will Tesla's closing stock price be on Tuesday?
Congratulations to George Kroustalis of Charlotte, N.C., who came closest to guessing Facebook's closing share price of $69.85 on Tuesday.
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Feb 28, 2014
Section: Personal Finance
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1503129469
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1503129469?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla Is a Miracle, Batteries Included; Inventing the Future of Automotive Technology
Author: Lewis, Al
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Mar 2014: n/a.
ProQuest document link
Abstract:
Tesla is also manufacturing electric powertrain systems for major auto makers, including Daimler and Toyota. [...]it's a luxury car, "brimming with innovation," with "blistering acceleration, razor-sharp handling, compliant ride and versatile cabin, which can fit a small third-row seat," Consumer Reports noted.
Full text: I wish I had a share of Tesla for every time someone said don't buy Tesla.
I appeared on Fox Business in August with Neil Cavuto and David Asman, who argued that Tesla was overvalued--its stock then trading around $150 a share.
They complained that Tesla's market capitalization had just hit $20 billion, yet it was only selling about 25,000 cars a year. General Motors, by contrast, sells nearly 3 million cars a year and has a market cap of $47 billion.
I argued that these numbers were irrelevant. There is a basic miracle at work here: Tesla is an automobile manufacturer built from scratch during the worst recession of our lives. Yes, it loses money every year, but it is multiplying revenues while building the future of automotive technology. Now, just six months later, Tesla stock is trading for more than $250 a share and its market cap--ahem--is $31 billion.
Last week, Tesla announced plans to sell $1.6 billion in bonds to finance its new "Gigafactory." The plant will employ about 6,500 people, making lithium-ion batteries.
Economic-development officials would be hard-pressed to find another deal providing this many well-paying jobs. Tesla wants the plant operational by 2017, making cells for 500,000 electric cars a year. It's looking at sites in Nevada, Texas, New Mexico and Arizona.
These batteries, by the way, won't just power cars. They can be used for homes, businesses and utility companies. They can be used for backup power, peak-demand power reduction, storage of surplus power, and, of course, solar-power systems. Tesla's biggest problem may be that its Gigafactory won't have enough gigs to meet demand.
Tesla is also manufacturing electric powertrain systems for major auto makers, including Daimler and Toyota. And Tesla plans to sell cars in China next year. Yes, they're actually going to make cars and batteries here and sell them in China.
If that doesn't seem miraculous, read Consumer Reports. Last week the publication named the Tesla Model S the "best overall" car for 2014. This is amazing considering how slow Americans have been to adopt electric cars, and that the price of this model is nearly $90,000. But it's a luxury car, "brimming with innovation," with "blistering acceleration, razor-sharp handling, compliant ride and versatile cabin, which can fit a small third-row seat," Consumer Reports noted.
Tesla is slowly bringing down its prices: Its earliest cars sold for more than $110,000. As technology improves and Tesla's manufacturing capabilities scale higher, electric cars eventually will become affordable to all--each car will save about $1,800 a year on gasoline.
Ignore those who complain that Tesla receives government subsidies, as if the other car makers don't. Last year, Tesla repaid its $452 million Energy Department loan. Meantime, taxpayers are still smarting from a $10 billion loss they took at GM.
Tesla received only a few hundred million in government assistance. Individual banks, by contrast, received billions and continue to enjoy extraordinary assistance from the Federal Reserve.
Banks, however, have only been raising fees on customers, improperly foreclosing on thousands of homeowners, and cutting jobs. Just last week, J.P. Morgan Chase said it would slash a net 5,000 jobs this year, after having cut about 15,000 since 2011.
That's pretty much where the miracle ends for Tesla. It just can't seem to create as many jobs as J.P. Morgan cuts.
Al Lewis is a columnist based in Denver. He blogs at tellittoal.com; his email address is al.lewis@tellittoal.com
Credit: Al Lewis
Subject: Research & development--R & D; Automobile industry; Manufacturing
People: Cavuto, Neil
Company / organization: Name: Consumer Reports; NAICS: 511120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Mar 1, 2014
Section: Personal Finance
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1503348314
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1503348314?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Convertible Debt Electrifies Long-Term Investors
Author: Jarzemsky, Matt
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Mar 2014: n/a.
ProQuest document link
Abstract:
While the spotlight has focused on the frantic trading driving up Tesla's share price sevenfold in the past year, less visible have been the company's efforts to tap big, sophisticated and long-term investors for cash that it needs to expand. The Palo Alto, Calif., company raised $2 billion in a sale of convertible debt--bonds that can be exchanged for stock--late last week, garnering an audience of big investors such as mutual funds and hedge funds.
Full text: Tesla Motors Inc. is showing that when it comes to Wall Street, it is more than just a plaything for day traders and ardent believers in electric cars.
While the spotlight has focused on the frantic trading driving up Tesla's share price sevenfold in the past year, less visible have been the company's efforts to tap big, sophisticated and long-term investors for cash that it needs to expand.
The Palo Alto, Calif., company raised $2 billion in a sale of convertible debt--bonds that can be exchanged for stock--late last week, garnering an audience of big investors such as mutual funds and hedge funds. The deal ranked as the second-biggest sale of convertible bonds in the U.S. in the past two years, according to data provider Ipreo.
Tesla was able to raise 25% more than originally planned. The company intends to use that money in part for construction of a $5 billion plant to build batteries crucial to expanding its business, it said.
A soaring share price isn't enough to spur growth at companies like Tesla that need capital for big investments in plant and equipment. These companies have to be able to raise cash from investors willing to wait years before reaping returns.
The Tesla offering was well-timed, observers say. A surging share price bolstered the appeal of convertible bonds, which are often seen as riskier than plain-vanilla debt.
"They came off a strong earnings quarter, they announced the factory, people can understand what these proceeds are for," said Dan Veru, chief investment officer at Palisade Capital Management LLC, which oversees $5 billion in assets and bought some of the debt sold Thursday.
That offering followed a May sale of $1.02 billion in stock and convertible debt, which investors also snapped up. The company went public in June 2010, raising $260 million when it sold stock at $17 a share. The stock rocketed higher starting last spring, as Tesla started to earn plaudits for its vehicles and turned profitable amid fast-growing sales. At Tesla's offering in May, investors paid $92.24 a share.
The past week alone, the stock is up $35.21, or 17%, to $244.81 after a bullish Morgan Stanley research note projected the shares will go to $320 as the company benefits from expanded battery production.
The share rally highlights investors' hunger for fast-growing companies, which have become scarce as broader economic growth in the U.S. remains stuck in first gear.
At the same time, many money managers remain wary. Currently, Tesla investors are buying into a story rather than a flourishing business, some investors say. Its car business is tiny by any standard, and it isn't clear if its battery efforts will be viable.
Meanwhile, the stock is trading at 138 times estimates for 2014 earnings, compared with a price-to-earnings ratio of about 15.5 for the S&P 500 index, according to FactSet. That kind of valuation makes the shares extremely vulnerable to company setbacks.
The ascent of Tesla's shares has attracted short-term traders, many of whom are individuals. In the past year, the stock has seen more than a dozen sessions in which more than 25 million shares changed hands, which on a typical day would put it among the most actively traded stocks in the S&P 500. Tesla has long been among the most actively traded stocks by customers of TD Ameritrade Holding Corp., and among the top five stocks by volume the last two weeks, a spokeswoman for the retail brokerage said.
But in tapping the convertibles market, the Tesla deal Thursday was aimed squarely at big institutional investors in control of large sums of money. Tesla declined to comment.
"Tesla has a good story to raise capital with," said Craig Orchant, partner at EA Markets LLC, which advises companies that are raising capital. "Increasing the size of the deal and getting it done at good terms are not just a function of the dynamics of the market, but of the investor and analyst community's support for Tesla's meteoric rise."
Convertible debt pays interest like a bond but can be exchanged for stock under certain conditions. These securities often see milder swings than the stock of the same company, enabling investors to capture some of the gains of a share-price rally but offering some protection against potential losses.
"The classic growth companies are the kind of thing the convert market loves," said Eli Pars, who helps manage convertible holdings at Calamos Investments LLC, which oversees $25.8 billion. "If they slip up, the stock may get taken down, but the convertible debt should hold up relatively well." Mr. Pars declined to say if Calamos bought any of the Tesla debt.
Investors in Tesla's offering at face value will receive annual interest of 0.25% for the five-year notes or 1.25% for the seven-year notes.
For both bonds, they also will have the option at any time to get 2.8 shares for every $1,000 of bonds they choose to convert, but only if Tesla's stock is up more than 42.5% from its last price before the offering, or to about $360.
Another reason for the strong appetite for Tesla's bonds is a lack of supply of convertible notes in recent years. The U.S. saw $45.2 billion of convertible issuance last year, the most since 2008, according to Dealogic.
Tesla's deal also appealed to sophisticated traders who make money by simultaneously buying convertible securities in a company and short selling--or betting against--the stock. By owning convertible bonds and being short the stock, these traders won't be on the hook for a rise or fall in the share price, but they will receive the interest payments and could further benefit if the convertibles themselves rise in price.
"This is not a messaging-app company that has little infrastructure-capital-spending needs," said Huachen Chen, co-manager of Allianz Global Investors' $4 billion global technology strategy, including the $1.3 billion AllianzGI Technology Fund, which has owned Tesla shares since the months after its initial public offering. "They're building metal and tires and motors, and they need funds."
Credit: Matt Jarzemsky
Subject: Stock prices; Investment policy; Earnings; Institutional investments
Location: United States--US
Company / organization: Name: Ipreo; NAICS: 523930; Name: Palisade Capital Management; NAICS: 523930; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Mar 2, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1503493901
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1503493901?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Issue Electrifies Long-Term Buyers
Author: Jarzemsky, Matt; Demos, Telis
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Mar 2014: C.1.
ProQuest document link
Abstract:
While the spotlight has focused on the frantic trading driving up Tesla's share price sevenfold in the past year, less visible have been the company's efforts to tap big, sophisticated and long-term investors for cash that it needs to expand. The Palo Alto, Calif., company raised $2 billion in a sale of convertible debt -- bonds that can be exchanged for stock -- late last week, garnering an audience of big investors such as mutual funds and hedge funds.
Full text: Tesla Motors Inc. is showing that when it comes to Wall Street, it is more than just a plaything for day traders and ardent believers in electric cars.
While the spotlight has focused on the frantic trading driving up Tesla's share price sevenfold in the past year, less visible have been the company's efforts to tap big, sophisticated and long-term investors for cash that it needs to expand.
The Palo Alto, Calif., company raised $2 billion in a sale of convertible debt -- bonds that can be exchanged for stock -- late last week, garnering an audience of big investors such as mutual funds and hedge funds. The deal ranked as the second-biggest sale of convertible bonds in the U.S. in the past two years, according to data provider Ipreo.
Tesla was able to raise 25% more than originally planned. The company intends to use that money in part for construction of a $5 billion plant to build batteries crucial to expanding its business, it said.
A soaring share price isn't enough to spur growth at companies like Tesla that need capital for big investments in plant and equipment. These companies have to be able to raise cash from investors willing to wait years before reaping returns.
The Tesla offering was well-timed, observers say. A surging share price bolstered the appeal of convertible bonds, which are often seen as riskier than plain-vanilla debt.
"They came off a strong earnings quarter, they announced the factory, people can understand what these proceeds are for," said Dan Veru, chief investment officer at Palisade Capital Management LLC, which oversees $5 billion in assets and bought some of the debt sold Thursday.
That offering followed a May sale of $1.02 billion in stock and convertible debt, which investors also snapped up. The company went public in June 2010, raising $260 million when it sold stock at $17 a share. The stock rocketed higher starting last spring, as Tesla started to earn plaudits for its vehicles and turned profitable amid fast-growing sales. At Tesla's offering in May, investors paid $92.24 a share.
The past week alone, the stock is up $35.21, or 17%, to $244.81 after a bullish Morgan Stanley research note projected the shares will go to $320 as the company benefits from expanded battery production.
The share rally highlights investors' hunger for fast-growing companies, which have become scarce as broader economic growth in the U.S. remains stuck in first gear.
At the same time, many money managers remain wary. Currently, Tesla investors are buying into a story rather than a flourishing business, some investors say. Its car business is tiny by any standard, and it isn't clear if its battery efforts will be viable.
Meanwhile, the stock is trading at 138 times estimates for 2014 earnings, compared with a price-to-earnings ratio of about 15.5 for the S&P 500 index, according to FactSet. That kind of valuation makes the shares extremely vulnerable to company setbacks.
The ascent of Tesla's shares has attracted short-term traders, many of whom are individuals. In the past year, the stock has seen more than a dozen sessions in which more than 25 million shares changed hands, which on a typical day would put it among the most actively traded stocks in the S&P 500. Tesla has long been among the most actively traded stocks by customers of TD Ameritrade Holding Corp., and among the top five stocks by volume the last two weeks, a spokeswoman for the retail brokerage said.
But in tapping the convertibles market, the Tesla deal Thursday was aimed squarely at big institutional investors in control of large sums of money. Tesla declined to comment.
"Tesla has a good story to raise capital with," said Craig Orchant, partner at EA Markets LLC, which advises companies that are raising capital. "Increasing the size of the deal and getting it done at good terms are not just a function of the dynamics of the market, but of the investor and analyst community's support for Tesla's meteoric rise."
Convertible debt pays interest like a bond but can be exchanged for stock under certain conditions. These securities often see milder swings than the stock of the same company, enabling investors to capture some of the gains of a share-price rally but offering some protection against potential losses.
"The classic growth companies are the kind of thing the convert market loves," said Eli Pars, who helps manage convertible holdings at Calamos Investments LLC, which oversees $25.8 billion. "If they slip up, the stock may get taken down, but the convertible debt should hold up relatively well." Mr. Pars declined to say if Calamos bought any of the Tesla debt.
Investors in Tesla's offering at face value will receive annual interest of 0.25% for the five-year notes or 1.25% for the seven-year notes.
For both bonds, they also will have the option at any time to get 2.8 shares for every $1,000 of bonds they choose to convert, but only if Tesla's stock is up more than 42.5% from its last price before the offering, or to about $360.
Another reason for the strong appetite for Tesla's bonds is a lack of supply of convertible notes in recent years. The U.S. saw $45.2 billion of convertible issuance last year, the most since 2008, according to Dealogic.
Tesla's deal also appealed to sophisticated traders who make money by simultaneously buying convertible securities in a company and short selling -- or betting against -- the stock. By owning convertible bonds and being short the stock, these traders won't be on the hook for a rise or fall in the share price, but they will receive the interest payments and could further benefit if the convertibles themselves rise in price.
"This is not a messaging-app company that has little infrastructure-capital-spending needs," said Huachen Chen, co-manager of Allianz Global Investors' $4 billion global technology strategy, including the $1.3 billion AllianzGI Technology Fund, which has owned Tesla shares since the months after its initial public offering. "They're building metal and tires and motors, and they need funds."
Credit: By Matt Jarzemsky and Telis Demos
Subject: Automobile industry; Convertible debts
Location: United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 3100: Capital & debt management; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2014
Publication date: Mar 3, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1503530067
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1503530067?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla to Stop Selling Electric Cars in New Jersey; Auto Maker's Stores Violate New State Rules Against Direct-to-Consumer Sales
Author: Rogers, Christina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Mar 2014: n/a.
ProQuest document link
Abstract:
Diarmuid O'Connell, Tesla's vice president of business development, said Tuesday that the New Jersey move amounts to a "death penalty" for the company's two auto stores in the state and could encourage dealers in other states to follow suit by attacking the company through regulation, rather than legislation.
Full text: Tesla Motors Inc. will stop selling its luxury electric cars in New Jersey on April 1, after the state said Tuesday it wouldn't license the company to sell vehicles directly to consumers, bypassing franchised dealers.
The defeat for Tesla, which owns its own stores, came despite a furious 11th-hour lobbying effort. A senior Tesla executive had accused New Jersey Gov. Chris Christie of breaking a deal to hold off on a rule change requiring all car retailers in the state to have a franchise agreement with an auto maker. The New Jersey Motor Vehicle Commission approved the rule change Tuesday.
Mr. Christie's spokesman countered that Tesla knew that it was operating outside state laws.
Tesla has been battling in New Jersey and other states to defend its direct-sales model against attacks by franchised dealers representing rival brands.
Tesla's problems have their roots in decades of mistrust between independent car dealers and auto makers. Over the years, dealers have fended off efforts by the auto makers to set up company-run stores that could compete with them. The dealers have pushed for--and won--state legislation to protect their franchises.
Dealers fear Tesla's model could cause directing selling to spread to other manufacturers, ending a century-old system that protects the sales territories and investments of many independent businesspeople.
Jim Appleton, president of the New Jersey Coalition of Automotive Retailers, said Tesla was well aware of the proposed rule change and submitted comments on it when the proposal was under public review.
"Tesla is making a big play today in trying to drag political and legal intrigue into this battle when none exists," Mr. Appleton said.
He added that the New Jersey vehicle agency made a mistake in giving Tesla a license in the first place, since its direct-sales model was illegal under state law.
Tesla officials have defended the model, saying that electric-car technology is new and requires the manufacturer to play a hands-on role in educating consumers. Tesla, which is based in Palo Alto, Calif., sells just one electric-car model, which starts at $71,000. Last year, it sold 22,400 cars globally.
Diarmuid O'Connell, Tesla's vice president of business development, said Tuesday that the New Jersey move amounts to a "death penalty" for the company's two auto stores in the state and could encourage dealers in other states to follow suit by attacking the company through regulation, rather than legislation.
"This is at the very least disappointing, if not outright outrageous what's going on with our business in N.J. right now," Mr. O'Connell said.
A spokesman for Gov. Christie said that his administration made clear to Tesla when it began operating in New Jersey a year ago that it would need legislation to establish direct-sales operations under state law. The change made Tuesday was the final step in a rule-making process that began in October and has been open to public comment.
"They've been portraying this as sprung upon them, but that's just not true," the spokesman said. "Tesla has been aware of this position from the beginning."
New Jersey is now the third state in which Tesla is banned from selling cars directly to consumers. The other two are Texas and Arizona.
Tesla has been successful in knocking down legislative efforts in other states to block its direct-to-consumer sales.
Tesla operates two retail stores in New Jersey with 27 employees and had plans for more. It is unclear whether the Tesla stores would revert to "galleries," showrooms in which consumers can check out vehicles but not buy them.
Mr. O'Connell called the gallery option a "suboptimal" situation. A Tesla spokesman said it isn't certain whether the company can sell cars online to New Jersey residents.
Tesla also is facing new challenges in Ohio, where legislation has been proposed to prevent direct sales. Tesla officials worry that the approach taken in New Jersey could eventually be adopted by dealer groups in other states if it works in shutting down its stores.
"They've found it difficult to advance their arguments in the light of day," Mr. O'Connell said. "They have increasingly gone underground."
Tesla hasn't ruled out countering the state-by-state opposition with an appeal to the federal courts or pursing legislative action in Congress.
"Certainly that's one of the strategies we've discussed," Mr. O'Connell said. But no decision has been made, and the company wouldn't likely pursue action at the federal level unless it was shut out of one of its core markets, he said.
"We don't want to be in these dust-ups," he added. "We're fundamentally an engineering company."
Credit: Christina Rogers
Subject: Automobile dealers; Research & development--R & D; Legislation; Sales territories
Location: New Jersey
People: Christie, Christopher J
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Mar 11, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1505921961
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1505921961?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
New Jersey Pulls the Plug on Tesla
Author: Rogers, Christina; Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Mar 2014: B.1.
ProQuest document link
Abstract:
Diarmuid O'Connell, Tesla's vice president of business development, said Tuesday that the New Jersey move amounts to a "death penalty" for the company's two auto stores in the state and could encourage dealers in other states to follow suit by attacking the company through regulation, rather than legislation.
Full text: Tesla Motors Inc. will stop selling its luxury electric cars in New Jersey on April 1, after the state said Tuesday it wouldn't license the company to sell vehicles directly to consumers, bypassing franchised dealers.
The defeat for Tesla, which operates its own stores, came despite a furious 11th-hour lobbying effort. A senior Tesla executive accused New Jersey Gov. Chris Christie of breaking a deal to hold off on a rule change requiring all car retailers in the state to have a franchise agreement with an auto maker. The New Jersey Motor Vehicle Commission approved the rule change Tuesday.
Mr. Christie's spokesman countered that Tesla knew that it was operating outside state laws.
Tesla has been battling in New Jersey and other states to defend its direct-sales model against attacks by franchised dealers representing rival brands.
The setback for Tesla has its roots in decades of mistrust between car dealers and auto makers. Over the years, dealers have fended off auto makers' efforts to set up company-run stores. The dealers have pushed for -- and won -- state legislation to protect their franchises.
Dealers fear Tesla's model could cause directing selling to spread to other manufacturers, ending a century-old system that protects the sales territories and investments of many independent businesspeople.
Jim Appleton, president of the New Jersey Coalition of Automotive Retailers, said Tesla was well aware of the proposed rule change and submitted comments on it when the proposal was under public review.
"Tesla is making a big play today in trying to drag political and legal intrigue into this battle when none exists," Mr. Appleton said.
He added that the New Jersey vehicle agency made a mistake in giving Tesla a license in the first place, since its direct-sales model was illegal under state law.
Tesla officials have defended the model, saying that electric-car technology is new and requires the manufacturer to play a hands-on role in educating consumers. Tesla, which is based in Palo Alto, Calif., sells just one electric-car model, which starts at $71,000. Last year, it sold 22,400 cars globally.
Diarmuid O'Connell, Tesla's vice president of business development, said Tuesday that the New Jersey move amounts to a "death penalty" for the company's two auto stores in the state and could encourage dealers in other states to follow suit by attacking the company through regulation, rather than legislation.
A spokesman for Gov. Christie said that his administration made clear to Tesla when it began operating in New Jersey a year ago that it would need legislation to establish direct-sales operations under state law. The change made Tuesday was the final step in a rule-making process that began in October and has been open to public comment.
"They've been portraying this as sprung upon them, but that's just not true," the spokesman said.
New Jersey is now the third state in which Tesla is banned from selling cars directly to consumers. The other two are Texas and Arizona.
(See related letters: "Letters to the Editor: On Selling Green Tesla Automobiles in the Garden State" -- WSJ March 21, 2014)
Credit: By Christina Rogers and Mike Ramsey
Subject: Automobile dealers; Research & development--R & D; Legislation; Sales territories; Licensing; Automobile sales
Location: New Jersey
People: Christie, Christopher J
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 4320: Legislation; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2014
Publication date: Mar 12, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1506264035
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1506264035?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
New Jersey Targets Tesla
Author: Riley, Jason L
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Mar 2014: n/a.
ProQuest document link
Abstract:
New Jersey isn't the only state where Tesla is having this fight, and car dealerships aren't the only middlemen who run to politicians for legislative cover.
Full text: Tesla Motors, which makes electric cars, doesn't get a lot of sympathy from free-market conservatives. It's cut from the same cloth as Solyndra, the solar company that went bankrupt even after receiving more than a half-billion dollars in federal loan guarantees. Tesla has been more successful, thanks mainly to government largess and favorable regulatory treatment that competitors don't receive.
Despite the fact that Tesla's origins epitomize crony capitalism, however, its distribution model is admirable. Rather than selling to dealerships, which then mark up the vehicles that we eventually buy, Tesla prefers to sell its cars directly to consumers. It's not surprising that middleman dealerships would oppose direct sales, but it's too bad that the dealers found an ally this week in New Jersey's Republican governor, Chris Christie. On Tuesday, the Christie administration passed a new rule that says companies must sell cars through certified dealerships.
Environmentalists are upset because this could result in fewer electric cars on the road. What ought to bother conservatives is Mr. Christie's rank protectionism. The governor is shielding dealers at the expense of consumers. Studies have shown that car buyers would save thousands of dollars per vehicle if manufacturers could sell to them directly. That the governor has singled out Tesla is also troublesome and recalls how Democratic politicians have gone after companies like Target and Wal-Mart.
Tesla told the Star-Ledger that the rule change came out of nowhere and that the existing statutes allow it to sell cars in the Garden State, which it's been doing for the past year. The company said "the only thing that has changed is the Christie administration's sudden decision to go around the Legislature in an attempt to enact a rule that the statute doesn't permit." The paper said the rule change is supported by the New Jersey Coalition of Automotive Retailers (NJCAR), which spent more than $155,000 in its lobbying efforts last year.
New Jersey isn't the only state where Tesla is having this fight, and car dealerships aren't the only middlemen who run to politicians for legislative cover. For more than a decade wine retailers and wholesalers have been battling wineries that want to sell directly to consumers. But when protectionism prevails, competition is limited and consumers are worse off.
Credit: Jason L. Riley
Subject: Automobile dealers; Governors; Electric vehicles
Location: New Jersey
People: Riley, Jason L
Company / organization: Name: Wal-Mart Stores Inc; NAICS: 452112, 452910; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Mar 13, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1506947010
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1506947010?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
On Selling Green Tesla Automobiles in the Garden State; How can New Jersey deny Tesla Motors a license to sell cars, when they don't have any franchises to compete with?
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Mar 2014: n/a.
ProQuest document link
Abstract:
The Tesla factory-store model is unlawful in New Jersey because the statute, on the books for more than a decade, prohibits an auto maker from owning a dealership, being licensed as a new-car dealer or directly retailing cars in the state.
Full text: How can New Jersey deny Tesla Motors a license to sell cars when it doesn't have any franchises to compete with ("New Jersey Pulls the Plug on Tesla," Marketplace, March 12). The law was set up to protect franchises from competition from the auto maker.
Doug Wilbert
Elberta, Ala.
I bought a Tesla easily and painlessly in Arizona, which also requires that automobiles be sold through franchise dealerships. Tesla has a store in Scottsdale staffed by pleasant and knowledgeable people who answer questions about the vehicle on display there. As they are banned from any selling activity, they scrupulously refuse to answer any questions about price or financing. You can test drive the car by appointment, which can be arranged online. When you're ready to buy, you do so online. You pick up the car at another Scottsdale location.
Before placing my order, I made another trip to the store to have one more look. The manager asked me what options I had selected. He explained that several of them were a waste of money. He saved me $10,000. When was the last time that happened at a franchise car dealership?
Stephen R.S. Martin
Cave Creek, Ariz.
The regulation adopted by the New Jersey Motor Vehicle Commission on March 11 isn't an attack on Tesla or an attempt to put the car maker out of business in New Jersey. It simply requires Tesla to conform its business model to existing state law. The Tesla factory-store model is unlawful in New Jersey because the statute, on the books for more than a decade, prohibits an auto maker from owning a dealership, being licensed as a new-car dealer or directly retailing cars in the state.
The law serves the public interest in competitive pricing, convenient warranty and safety recall service and highway safety. The franchise system of independent new-car dealerships promotes aggressive price competition, while the factory-store model advocated by Tesla creates a vertical monopoly and limits competition.
James B. Appleton
President
N.J. Coalition of
Automotive Retailers
Trenton, N.J.
There is no circumstance in which reduced choice or the inclusion of a sales commission to a dealership helps the consumer.
Dan Ogden
West Orange, N.J.
Subject: Competition; Automobile dealers; Corporate planning; Automobile safety; Franchises
Location: Arizona New Jersey
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Mar 20, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1508829256
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1508829256?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
On Selling Green Tesla Automobiles in the Garden State
Author: Anonymous
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]21 Mar 2014: A.12.
ProQuest document link
Abstract:
The Tesla factory-store model is unlawful in New Jersey because the statute, on the books for more than a decade, prohibits an auto maker from owning a dealership, being licensed as a new-car dealer or directly retailing cars in the state.
Full text: How can New Jersey deny Tesla Motors a license to sell cars when it doesn't have any franchises to compete with ("New Jersey Pulls the Plug on Tesla," Marketplace, March 12). The law was set up to protect franchises from competition from the auto maker.
Doug Wilbert
Elberta, Ala.
---
I bought a Tesla easily and painlessly in Arizona, which also requires that automobiles be sold through franchise dealerships. Tesla has a store in Scottsdale staffed by pleasant and knowledgeable people who answer questions about the vehicle on display there. As they are banned from any selling activity, they scrupulously refuse to answer any questions about price or financing. You can test drive the car by appointment, which can be arranged online. When you're ready to buy, you do so online. You pick up the car at another Scottsdale location.
Before placing my order, I made another trip to the store to have one more look. The manager asked me what options I had selected. He explained that several of them were a waste of money. He saved me $10,000. When was the last time that happened at a franchise car dealership?
Stephen R.S. Martin
Cave Creek, Ariz.
---
The regulation adopted by the New Jersey Motor Vehicle Commission on March 11 isn't an attack on Tesla or an attempt to put the car maker out of business in New Jersey. It simply requires Tesla to conform its business model to existing state law. The Tesla factory-store model is unlawful in New Jersey because the statute, on the books for more than a decade, prohibits an auto maker from owning a dealership, being licensed as a new-car dealer or directly retailing cars in the state.
The law serves the public interest in competitive pricing, convenient warranty and safety recall service and highway safety. The franchise system of independent new-car dealerships promotes aggressive price competition, while the factory-store model advocated by Tesla creates a vertical monopoly and limits competition.
James B. Appleton
President
N.J. Coalition of
Automotive Retailers
Trenton, N.J.
---
There is no circumstance in which reduced choice or the inclusion of a sales commission to a dealership helps the consumer.
Dan Ogden
West Orange, N.J.
Subject: Competition; Automobile dealers; Corporate planning; Automobile safety; Franchises
Location: Arizona New Jersey
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.12
Publication year: 2014
Publication date: Mar 21, 2014
Section: Letters to the Editor
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1508924368
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1508924368?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited wit hout permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Trading Winds Blow Cold for Some Hot Stocks; 'Momentum' Shares Sell Off; Tesla and Twitter Lose Investor Favor
Author: Dieterich, Chris
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Mar 2014: n/a.
ProQuest document link
Abstract:
The Nasdaq Biotechnology Index is up more than 50% over the past year, more than double the gains for the S&P 500. Because biotechnology stocks carry expectations for fast future earnings growth, they generally have higher valuations than the broader stock market.
Full text: What goes up must come down, a lesson investors in some of the fastest-climbing U.S. stocks are learning the hard way.
Shares of companies including Tesla Motors Inc., SolarCity Corp. and Twitter Inc. have fallen sharply this month. They are among the most popular "momentum" stocks, favorites of day traders but where profits are sometimes more of a hope than a reality.
For some market watchers, this selloff simply reflects the risks that come with piling into highflying stocks. To others, it is a potential broader warning sign about investors feeling less confident about the outlook for shares.
"It's really a broad selloff [of momentum stocks], people taking gains just because they might have some questions" about the health of the broader market, said Jerry Braakman, chief investment officer at First American Trust, whose firm oversees about $1.1 billion in Santa Ana, Calif.
To be sure, underlying concerns about valuation, coupled with worries over Federal Reserve policy and corporate earnings, aren't prompting investors to move broadly out of stocks. On Monday, the S&P 500 dropped 9.08 points, or 0.5%, to 1857.44, but remains just 1.1% below its March 7 all-time high.
But action in some stocks has turned lately. Shares of Tesla are up sixfold over the past year but off 10% in March. SolarCity, a solar-panel financing and installation company whose chairman is Tesla founder Elon Musk, is off 26% this month after booking a 244% price gain over 12 months.
Twitter has slumped 11% in March but has nearly doubled since its November initial public offering. 3D Systems Corp., among the hottest 3-D printer makers, has shed 24% in March but climbed 84% over 12 months. The S&P 500 is down 0.1% this month.
Mr. Braakman sees the turn in go-go names as a signal that investors need to be choosier about finding stocks at reasonable prices. He said he stepped into the market and bought shares of Amgen Inc. on Friday but is avoiding smaller biotech companies with loftier valuations.
The Nasdaq Biotechnology Index is up more than 50% over the past year, more than double the gains for the S&P 500. Because biotechnology stocks carry expectations for fast future earnings growth, they generally have higher valuations than the broader stock market.
Based on earnings estimates for the next 12 months, the price/earnings ratio on the index hit 63.9 in February, up from 51 at the start of the year and the loftiest level since June, when it hit a postfinancial-crisis high of 66.4. The S&P 500 is trading at 15.3 times the next 12 months' earnings.
"Investors are getting wary of the valuations, given the [tepid] global growth environment," said Jeff Yu, head of U.S. single-stock derivatives trading at UBS AG. Mr. Yu said he saw hedge funds sell winning positions in industries like biotechnology, 3-D printing and solar energy on Monday, the very sectors at the forefront of the bull market through the end of last month.
Until late February, the Nasdaq Biotechnology Index had surged nearly unimpeded over a year, pushed higher by swelling demand for stocks like Intercept Pharmaceuticals Inc., which in January nearly quadrupled in one day after reporting results of an upbeat clinical trial.
Since hitting an all-time high on Feb. 25, however, the biotech index is down 12%.
Analysts and traders said some of the selling could be attributed to news about a letter sent by three congressional Democrats to Gilead Sciences Inc., criticizing the high price of the firm's Sovaldi hepatitis C drug.
Meanwhile, the losses in shares of some upstart 3-D printer companies has come as traders speculate that Hewlett-Packard Co. is getting into that business. The company has a 3-D printing-related announcement planned for June, Chief Executive Meg Whitman said at the company's annual shareholder meeting last week.
Still, many traders said the selloff is a function of the lofty valuations.
Biotech "has been a sector that's been on fire," said David Seaburg, who helps fund managers trade stocks as head of equity sales trading at New York brokerage Cowen & Co. But as these shares have gotten pricier, relative to the companies' sales and earnings, they are apt to see bigger day-to-day price swings, he said. Mr. Seaburg said some of his clients were looking to buy these shares but wanted to see them start to reverse declines.
Money has been coming out of the biggest biotech exchange-traded fund by assets during the recent selloff. The $5.5 billion iShares Nasdaq Biotechnology ETF brought in $631 million from the start of 2014 through Feb. 25, according to ETF.com. Since then, some $166 million, or roughly one-quarter of 2014's total influx, has walked out the door.
Broad selling has hit other companies, including social-media firm Facebook Inc. and cloud-computer software maker Workday Inc., with seemingly little in common except for being fast-moving, growth-heavy targets for speculative investors.
"When there's confidence, people tend to go into riskier names," said Randy Frederick, managing director of trading and derivatives at Charles Schwab Corp. "This selloff tells me there's some booking of profits."
Credit: Chris Dieterich
Subject: Investment policy; 3-D printers; Investments
Location: United States--US
People: Musk, Elon
Company / organization: Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930; Name: 3D Systems Corp; NAICS: 333511, 334118; Name: Twitter Inc; NAICS: 519130; Name: SolarCity Corp; NAICS: 238220, 333414; Name: Amgen Inc; NAICS: 541711, 325412
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Mar 24, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1509517382
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1509517382?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Compromises With Ohio Auto Dealers; Electric-Car Maker Is Limited to Three Stores, Easing Battle Over Its Direct-Sales Model
Author: Rogers, Christina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Mar 2014: n/a.
ProQuest document link
Abstract:
Tesla is pursuing a plan to build a multibillion-battery factory, expand overseas and launch two new vehicle lines. Since establishing its first store in California in 2008, Tesla has come under attack in other states by franchised dealers representing rival brands amid concerns the auto maker's direct-sales model will undermine their businesses.
Full text: Tesla Motors Inc. struck a deal Wednesday with Ohio auto dealers that could allow the electric-car maker to ease a battle over its direct-to-consumer retailing model, at least for the near term.
Under the agreement, Tesla would be allowed to keep operating two company-owned retail stores in the state, and open just one more. The deal requires approval from the Ohio state legislature. The proposed bill would bar all other auto makers from bypassing franchised dealers to retail cars.
Diarmuid O'Connell, Tesla's vice president of business development, said the compromise reached in Ohio should serve as a model to resolve fights with dealers in other states, where Tesla is confronting legislation and regulation aimed at outlawing its company-owned stores.
"I do think the Ohio solution points to a way dealers and Tesla can resolve this issue for the present, while letting both sides see how this develops," Mr. O'Connell said. "While on the margin it's disappointing that we don't have the ability to grow freely in Ohio, the compromise we achieved in the past 24 hours is sufficient for now."
Joe Cannon, vice president of government affairs for the Ohio Automobile Dealers Association, called the agreement "a very fair proposal that is helpful to both sides." It allows Tesla to keep operating in Ohio, he said, while reinforcing rules its dealer members have abided by for decades.
The political and legal battles have been a distraction for the auto maker. Tesla is pursuing a plan to build a multibillion-battery factory, expand overseas and launch two new vehicle lines.
Since establishing its first store in California in 2008, Tesla has come under attack in other states by franchised dealers representing rival brands amid concerns the auto maker's direct-sales model will undermine their businesses. Tesla has defended its business model, arguing that its electric-car technology requires a more hands-on approach in educating its consumers about the vehicles, compared with what a traditional dealership offers.
Earlier this month, Tesla lost a battle in New Jersey to preserve its direct-sales model after state regulators approved a rule change, forcing the company to shut down its retail operations in the state, including two stores. Tesla is also prohibited from selling cars directly to buyers in Texas and Arizona.
Similarly in Ohio, the state's dealer association had sought to block Tesla from selling cars there. Tesla, which sells only through company-owned stores, has outlets in Columbus and Cincinnati.
Tesla is looking to reach a solution with auto dealers in New York, where lawmakers have proposed a bill to outlaw its direct-sales operations, Mr. O'Connell said. Tesla operates five stores in New York, and has made "significant investment there," Mr. O'Connell said. "It would be the rational solution to the dealers' arguments and concerns."
Credit: Christina Rogers
Subject: Automobile dealers; Corporate planning; Automobile sales
Location: Ohio California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Mar 26, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1510292031
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1510292031?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Tesla, Ohio Auto Dealers Reach Accord
Author: Rogers, Christina
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 Mar 2014: B.3.
ProQuest document link
Abstract:
Tesla is pursuing a plan to build a multibillion-battery factory, expand overseas and launch new vehicle lines. Since establishing its first store in California in 2008, Tesla has come under attack in other states by franchised dealers representing rival brands amid concerns the auto maker's direct-sales model will undermine their businesses.
Full text: Tesla Motors Inc. struck a deal Wednesday with Ohio auto dealers that could allow the electric-car maker to ease a battle over its direct-to-consumer retailing model, at least for the near term.
Under the agreement, Tesla would be allowed to keep operating two company-owned retail stores in the state, and open just one more. The deal requires approval from the Ohio state legislature. The proposed bill would bar all other auto makers from bypassing franchised dealers to retail cars.
Diarmuid O'Connell, Tesla's vice president of business development, said the compromise reached in Ohio should serve as a model to resolve fights with dealers in other states, where Tesla is confronting legislation and regulation aimed at outlawing its company-owned stores.
"I do think the Ohio solution points to a way dealers and Tesla can resolve this issue for the present, while letting both sides see how this develops," Mr. O'Connell said. "While on the margin it's disappointing that we don't have the ability to grow freely in Ohio, the compromise we achieved in the past 24 hours is sufficient for now."
Joe Cannon, vice president of government affairs for the Ohio Automobile Dealers Association, called the agreement "a very fair proposal that is helpful to both sides." It allows Tesla to keep operating in Ohio, he said, while reinforcing rules its dealer members have abided by for decades.
The political and legal battles have been a distraction for the auto maker. Tesla is pursuing a plan to build a multibillion-battery factory, expand overseas and launch new vehicle lines.
Since establishing its first store in California in 2008, Tesla has come under attack in other states by franchised dealers representing rival brands amid concerns the auto maker's direct-sales model will undermine their businesses. Tesla has defended its business model, arguing that its electric-car technology requires a more hands-on approach in educating its consumers about the vehicles, compared with what a traditional dealership offers.
Earlier this month, Tesla lost a battle in New Jersey to preserve its direct-sales model after state regulators approved a rule change, forcing the company to shut down its retail operations in the state, including two stores. Tesla is also prohibited from selling cars directly to buyers in Texas and Arizona.
Similarly in Ohio, the state's dealer association had sought to block Tesla from selling cars there.
Tesla is looking to reach a solution with auto dealers in New York, where lawmakers have proposed a bill to outlaw its direct-sales operations, Mr. O'Connell said. Tesla operates five stores in New York, and has made "significant investment there," Mr. O'Connell said. "It would be the rational solution to the dealers' arguments and concerns."
Credit: By Christina Rogers
Subject: Agreements; Automobile dealers
Location: Ohio United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry; 8390: Retailing industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2014
Publication date: Mar 27, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1510349765
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1510349765?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Tesla, Cuomo Cut Deal to Keep N.Y. Stores; Car Maker Can Keep 5 Existing Stores as Long as It Doesn't Open More Direct Sales Outlets in State
Author: Orden, Erica; Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Mar 2014: n/a.
ProQuest document link
Abstract:
According to the agreement between Tesla, Mr. Cuomo, legislative leaders and auto dealers, additional Tesla retail locations would need to be established under a "strengthened dealer franchise law."
Full text: Electric car maker Tesla Motors Inc. struck a deal Friday with New York Gov. Andrew Cuomo and the state's car dealers that will allow it to keep five existing company-owned stores, as long as it doesn't open more direct sale outlets in the state.
According to the agreement between Tesla, Mr. Cuomo, legislative leaders and auto dealers, additional Tesla retail locations would need to be established under a "strengthened dealer franchise law." In return, elected officials agreed to drop language in a bill in the state legislature that would have forced Tesla to close its existing direct-sale operations.
Also Friday, Tesla said it would add titanium shielding and an aluminum deflector plate to the underbody of its Model S luxury electric car to prevent possible fires that could be caused by running over objects.
The Palo Alto, Calif.-based company has already begun installing the shielding on new vehicles and will install it on existing cars when customers bring them in. The move comes as the National Highway Traffic Safety Administration said it has closed an investigation of two fires involving Tesla Model S sedans, after Tesla said it would add additional shielding to protect the batteries in the electric luxury cars. The agency said the increased underbody protection should reduce the risk of fires if the car runs over an object in the road that pierces the battery pack.
Tesla's agreement with New York, meanwhile, is similar to one Tesla reached earlier this week in Ohio, where the company will be allowed to keep operating two company-owned retail stores in the state, and open just one more. The Ohio deal requires approval from that state's legislature, as does New York's. But New York's agreement has the support of legislative leaders and the governor, meaning its approval by the legislature is all but ensured.
Diarmuid O'Connell, Tesla's vice president of business development, called the deal a "constructive solution." The agreement, Mr. O'Connell said, "protects franchise dealers' existing business while allowing Tesla to continue to pursue its mission of catalyzing the market for sustainable transportation."
Mr. Cuomo praised the agreement as a "win-win for consumers, for the franchised auto dealers and manufacturers who play such a vital role in New York's economy, and for cutting-edge companies like Tesla."
Tesla and Chief Executive Elon Musk are still locked in battles in several other states with dealers and officials hostile to its direct-to-consumer sales model. In New Jersey, state regulators this month approved a rule change that forces the company to shutter its retail operations, including two stores, in the state. And in Texas and Arizona, Tesla is prohibited from selling cars directly to buyers.
Lou Roberti, chairman of the New York state Automobile Dealers Association, predicted that New York's agreement would likely "serve as a model for other states as they consider how to accommodate Tesla and a distribution system that has served the public well."
"Franchised dealers provide price competition, a ready source of trained technicians and parts for repairs and recalls, and create a market for trade-ins," Mr. Roberti added.
Addressing the underbody shields, Mr. Musk said in a statement that they "are not needed for a high level of safety. "
"However, there is significant value to minimizing owner inconvenience in the event of an impact and addressing any lingering public misperception about electric vehicle safety," he added.
Mr. Musk had previously said the company didn't need to add shielding or recall the vehicle. Tesla already created a software change that raised the vehicle clearance at high speeds and put a fire warranty on all vehicles to address concerns.
In the two U.S. cases last year, both drivers ran over a hard object that pierced the aluminum plate that protects the large battery underneath the car, causing it to catch fire. Neither occupant was injured, but the cars were destroyed by the flames.
Write to Erica Orden at and Mike Ramsey at
Credit: By Erica Orden and Mike Ramsey
Subject: Automobile dealers; Agreements; Legislatures
Location: Ohio New York
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Mar 28, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1510746560
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1510746560?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Seeks Loophole, Not a Revolution; The electric-car maker's battle with the dealer lobby is just a phase.
Author: Jenkins, Holman W; Jr.
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Mar 2014: n/a.
ProQuest document link
Abstract:
Mr. Perry will be retiring this year so his throw-weight with the Texas dealer lobby is approximately nil. Because Tesla founder Elon Musk has decided the way to fight this fight is to launch blog salvos holding Gov. Chris Christie guilty of conspiring with New Jersey dealers to kill the electric car.
Full text: Life must feel like one long insult to General Motors. In the 1990s, when the Internet was new, the Detroit car maker saw a chance to remake its relationship with the public by letting people buy their cars directly on the Web. Splat went the idea when statewide dealer lobbies mobilized to stop a threat to their business, which is largely founded on the most-hated part of the car-buying process, haggling. In Texas, Gov. George W. Bush signed one of the most stringent prohibitions.
Fifteen years later another Texas Republican governor suddenly likes the idea of direct sales now that Tesla has proposed it. "I think it's time for Texans to have an open conversation about this," Rick Perry told Fox News.
Mr. Perry will be retiring this year so his throw-weight with the Texas dealer lobby is approximately nil. Why was he even asked? Because Tesla founder Elon Musk has decided the way to fight this fight is to launch blog salvos holding Gov. Chris Christie guilty of conspiring with New Jersey dealers to kill the electric car. Mr. Christie is considered a GOP presidential mentionee. So is Mr. Perry. Get it?
Mr. Musk is right that dealers are protecting their anticompetitive interests by blocking Tesla-owned sales outlets. But it has nothing to do with opposition to electric cars (a typical Musk canard) or even Tesla. Dealers want to avoid having to compete with direct sales by the manufacturers they actually care about--which isn't tiny Tesla but GM, Toyota and other established giants as well as any Chinese company who might set up shop in the U.S. and bypass the independent dealer system.
This would suggest that Mr. Musk, if he wants to prevail, ought to get the other car makers on his side. He doesn't seem to have tried. His apparent goal isn't deregulating the auto retail business so much as merely browbeating a few states into carving out friendly exceptions for Tesla.
Mr. Musk makes himself an irresistible target when he gets on a high horse, as he's been doing a lot lately. His company benefits from a favor as democratically grotesque as the dealer-protection laws: a $7,500 rebate paid by federal taxpayers to every buyer of his cars, which are playthings for the rich. In California, where many Tesla cars are sold, buyers get an additional $2,500 in cash from state taxpayers. America, look at your driveway: How many of your cars are even worth $10,000?
His bluster about a politically-favored gasoline oligopoly resisting its doom rings even hollower given that GM already has been practicing for a decade in Brazil the direct-sales approach that Mr. Musk preaches. Everybody wins: Buyers are willing to pay more for a car if they can get exactly the trim package they want rather than settling for the closest available facsimile on a dealer's lot. Chopped out of everyone's overhead is the enormous cost of maintaining a wide dealer inventory.
But direct-sale may work better with an entry-level car like the Chevy Celta that GM sells in Brazil or a hobbyist item like Tesla peddles to dilettantes and early adopters. Once Tesla makes its hoped-for transition from a niche business to a volume manufacturer, with mainstream customers who expect to make serious demands on the product, even Mr. Musk has suggested a franchise dealer network may be the way to go. If so, expect much of his current rhetoric to disappear down the memory hole though he's quite right on the substance of his critique of dealer-protection laws.
When Mr. Musk becomes, for a moment, the voice of reform, one should not be filled with confidence. Automotive News last year bitingly referred to his fight with dealers as a "spat between the billionaire and the millionaires." The auto industry bible has a point. On most given days, Mr. Musk and the dealer lobby are two versions of the same thing, making it harder than it should be to choose sides in the current fisticuffs.
Credit: Holman W. Jenkins, Jr.
Subject: Automobile sales
Location: Detroit Michigan Texas United States--US California
People: Christie, Christopher J Bush, George W
Company / organization: Name: Republican Party; NAICS: 813940; Name: Fox News Channel; NAICS: 515120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Mar 28, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newsp apers
Language of publication: English
Document type: News
ProQuest document ID: 1511036029
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1511036029?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Tesla Strikes Deal With New York to Keep Its Outlets
Author: Orden, Erica; Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Mar 2014: B.4.
ProQuest document link
Abstract:
According to the agreement among Tesla, Mr. Cuomo, legislative leaders and auto dealers, additional Tesla retail locations would need to be established under a "strengthened dealer franchise law."
Full text: Electric car maker Tesla Motors Inc. struck a deal Friday with New York Gov. Andrew Cuomo and the state's car dealers that will allow it to keep five existing company-owned stores, as long as it doesn't open more direct sale outlets in the state.
According to the agreement among Tesla, Mr. Cuomo, legislative leaders and auto dealers, additional Tesla retail locations would need to be established under a "strengthened dealer franchise law." In return, elected officials agreed to drop language in a bill in the state legislature that would have forced Tesla to close its existing direct-sale operations.
Also Friday, Tesla said it would add titanium shielding and an aluminum deflector plate to the underbody of its Model S luxury electric car to prevent possible fires that could result from running over objects.
The Palo Alto, Calif.-based company has already begun installing the shielding on new vehicles and will install it on existing cars when customers bring them in.
The move comes as the National Highway Traffic Safety Administration said it has closed an investigation of two fires involving Model S sedans, after Tesla said it would add additional shielding to protect the batteries in the electric luxury cars. The agency said the increased underbody protection should reduce the risk of fires if the car runs over an object in the road that pierces the battery pack.
Tesla's selling agreement with New York is similar to one Tesla reached recently in Ohio, where the company will be allowed to keep operating two company-owned retail stores in the state, and open just one more. The Ohio deal requires approval from that state's legislature, as does New York's. The New York pact has the support of legislative leaders and the governor, meaning its approval by the legislature is all but ensured.
Diarmuid O'Connell, Tesla's vice president of business development, called the deal a "constructive solution." The agreement, Mr. O'Connell said, "protects franchise dealers' existing business while allowing Tesla to continue to pursue its mission of catalyzing the market for sustainable transportation."
Mr. Cuomo praised the agreement as a "win-win for consumers, for the franchised auto dealers and manufacturers who play such a vital role in New York's economy, and for cutting-edge companies like Tesla."
Tesla and Chief Executive Elon Musk are still locked in battles in several other states with dealers and officials hostile to its direct-to-consumer sales model. In New Jersey, state regulators this month approved a rule change that forces the company to close its retail operations, including two stores, in the state. And in Texas and Arizona, Tesla is prohibited from selling cars directly to buyers.
Lou Roberti, chairman of the New York state Automobile Dealers Association, predicted that New York's agreement would likely "serve as a model for other states as they consider how to accommodate Tesla and a distribution system that has served the public well."
"Franchised dealers provide price competition, a ready source of trained technicians and parts for repairs and recalls, and create a market for trade-ins," Mr. Roberti added.
Addressing the underbody shields, Mr. Musk said in a statement that they "are not needed for a high level of safety."
"However, there is significant value to minimizing owner inconvenience in the event of an impact and addressing any lingering public misperception about electric vehicle safety," he added.
Mr. Musk had previously said the company didn't need to add shielding or recall the vehicle. Tesla already created a software change that raised the vehicle clearance at high speeds, and it put a fire warranty on all vehicles to address concerns.
In the two U.S. cases last year, both drivers ran over a hard object that pierced the aluminum plate that protects the large battery underneath the car, causing it to catch fire. Neither occupant was injured, but the cars were destroyed by the flames.
Credit: By Erica Orden and Mike Ramsey
Subject: Agreements; Automobile sales; Automobile dealers; Business closings
Location: Ohio New York
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 9110: Company specific; 4310: Regulation; 7300: Sales & selling; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2014
Publication date: Mar 29, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1511071066
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1511071066?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Does Tesla Really Need a $5 Billion Battery?; Musk Seeks Sites in Southwestern States for Giant Factory
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Apr 2014: n/a.
ProQuest document link
Abstract:
In a project that is befuddling industry experts and competitors, Tesla Motors Inc. is looking for possible sites for a giant electric-car battery factory in four Southwestern states. Reducing battery costs is critical for Tesla's forthcoming mass-market car, which is referred to as the Gen III and is expected to have a starting price of around $35,000.
Full text: In a project that is befuddling industry experts and competitors, Tesla Motors Inc. is looking for possible sites for a giant electric-car battery factory in four Southwestern states.
The plant, dubbed a "gigafactory" by Tesla Chief Executive Elon Musk, would be the world's largest factory by a long shot. Mr. Musk has outlined a proposal to spend $5 billion on it, hiring up to 6,500 workers and creating thousands of ancillary jobs. He compares the undertaking to auto-industry pioneer Henry Ford's early 20th century Rouge complex. It took in iron ore and other raw materials at one end and rolled out completed Model Ts at the other, aiming to control and cut costs at every stage of production.
Mr. Musk wants to begin making batteries at the plant in 2017, a timeline that puts pressure on the company to break ground this year. Tesla executives say they need the Gigafactory to guarantee the supply of millions of battery cells and to cut costs through scale and logistics savings.
"We need to move rapidly," adds Diarmuid O'Connell, vice president of business development for Tesla.
Mr. Musk's plan has generated excitement among officials in states eager to land the project but skepticism among battery-industry executives and rival auto executives.
"I don't quite get it," Volkswagen AG Chief Executive Martin Winterkorn said last month. "We have enough suppliers and wouldn't get the notion to build a battery factory."
Sales of electric vehicles remain small--less than 1% of the total U.S. market. The U.S. government spent more than $1 billion on new electric-vehicle battery plants as part of the Obama administration's economic stimulus, but many of those plants now run at just 15% to 20% of capacity.
"My first reaction was that Elon Musk is Superman--he can do anything," said Henry Sun, chief financial officer of the Chinese battery maker Highpower International Inc. "But my second reaction was, I'm kind of worried about it."
Meanwhile, officials in Arizona, Nevada, New Mexico and Texas are trying to lure the Silicon Valley-based maker of electric cars to their state. Mr. O'Connell and other Tesla officials are in the final stages of vetting sites in those states.
In Texas, Gov. Rick Perry is said to be leading negotiations directly. He told Fox Business last week that he could support overhauling state laws that block Tesla from operating company-owned retail car stores so the Gigafactory and its jobs don't go elsewhere. "The cachet of being able to say we put that manufacturing facility in [our] state is hard to pass up," he said.
In Arizona, legislators are pushing through bills to allow Tesla to sell cars without franchised dealerships. New Mexico may call a special legislative session to create incentives for the factory. And Nevada, which is rich in natural resources like lithium and the closest to Tesla's car factory in the Oakland suburb of Fremont, Calif., has already had Tesla officials visit Reno to look at sites.
Tesla aims to reduce the cost of its battery pack by 30% when the battery plant opens in 2017. It won't disclose the current cost, but analysts say the 85 kilowatt-hour pack on the Tesla Model S, a car whose price starts at $80,000, probably costs between $21,250 and $25,500.
Reducing battery costs is critical for Tesla's forthcoming mass-market car, which is referred to as the Gen III and is expected to have a starting price of around $35,000.
Tesla's growth in 2013 was held back by a lack of batteries. Supplier Panasonic Corp. is hoping to remedy that with a supply of two billion cells. But those may not be enough once Tesla introduces its higher-volume Gen III vehicle.
Tesla, with sales of just over 22,400 cars last year, is already the largest buyer of lithium-ion battery cells in the world. With plans to sell 500,000 vehicles, its own demand would be greater than the demand for every laptop, mobile phone and tablet sold in the world.
Mr. Musk is leading direct negotiations with Yoshihiko Yamada, who heads Panasonic's automotive and industrial systems subsidiary, to invest in the new Gigafactory and run battery-cell production.
Panasonic CEO Kazuhiro Tsuga sounded a cautious note late last month.
"There's no doubt that [the new plant] will entail a far bigger risk than the current investment we're making. I cannot disclose our investment stance at this point," Mr. Tsuga said.
Harald Kroeger, who runs Daimler AG's electric-vehicle programs and sits on Tesla's board, said the factory "has some advantages of course, but it has some huge disadvantages as well."
Sam Jaffe, a battery consultant with Navigant Research, says the companies he consults for don't understand why Tesla would build such a large factory. Tesla may want to make 35 gigawatt hours of cells a year, they say, but battery makers maintain the benefits of scale disappear at about one gigawatt hour of capacity.
Wall Street is betting on Tesla. The Palo Alto, Calif., company raised a formidable $2 billion through a convertible-bond offering last month. Not long ago, getting the capital to pull off a project like this would have been the biggest challenge, but Tesla's market capitalization of nearly $31 billion has given it considerable leverage to raise more money.
The risks of going ahead with the Gigafactory project start with the tight construction timetable. "There are very few factories of 10 million square feet built all at once," says Randy Abdallah, executive vice president of Walbridge Aldinger, one the world's leading factory-construction firms. But he believes Mr. Musk's plan is doable. "There are solutions if you are willing to pay the cost," he says.
Mr. Musk's vision for lowering costs at the plant includes tying up sources for the primary metals and materials that go into batteries, such as cobalt.
Erin Chutters, the chief executive of Global Cobalt Corp., a mining company with plans to open a mine in Russia, says the "Gigafactory" demand, even if it reaches only a third of the anticipated size, would either lead to a sharp rise in cobalt prices or force several new mines to be opened.
"The only question I have is whether they will actually be able to sell that many cars," she says. "Are there really enough people out there that will switch over?"
Credit: Mike Ramsey
Subject: Cost control; Operating companies; Automobile industry; Batteries
Location: Southwestern states
People: Perry, Rick
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Apr 1, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1511676998
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1511676998?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-1 1-21
Database: The Wall Street Journal
Does Tesla Need a $5 Billion Battery Factory? --- Elon Musk Seeks Sites in Four Southwestern States, but Industry Experts and Rivals Prove Skeptical
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Apr 2014: B.1.
ProQuest document link
Abstract:
In a project that is befuddling industry experts and competitors, Tesla Motors Inc. is looking for possible sites for a giant electric-car battery factory in four Southwestern states. Reducing battery costs is critical for Tesla's forthcoming mass-market car, which is referred to as the Gen III and is expected to have a starting price of around $35,000.
Full text: In a project that is befuddling industry experts and competitors, Tesla Motors Inc. is looking for possible sites for a giant electric-car battery factory in four Southwestern states.
The plant, dubbed a "gigafactory" by Tesla Chief Executive Elon Musk, would be the world's largest factory by a long shot. Mr. Musk has outlined a proposal to spend $5 billion on it, hiring up to 6,500 workers and creating thousands of ancillary jobs. He compares the undertaking to auto-industry pioneer Henry Ford's early 20th century Rouge complex. It took in iron ore and other raw materials at one end and rolled out completed Model Ts at the other, aiming to control and cut costs at every stage of production.
Mr. Musk wants to begin making batteries at the plant in 2017, a timeline that puts pressure on the company to break ground this year. Tesla executives say they need the Gigafactory to guarantee the supply of millions of battery cells and to cut costs through scale and logistics savings.
"We need to move rapidly," adds Diarmuid O'Connell, vice president of business development for Tesla.
Mr. Musk's plan has generated excitement among officials in states eager to land the project but skepticism among battery-industry executives and rival auto executives.
"I don't quite get it," Volkswagen AG Chief Executive Martin Winterkorn said last month. "We have enough suppliers and wouldn't get the notion to build a battery factory."
Sales of electric vehicles remain small -- less than 1% of the total U.S. market. The U.S. government spent more than $1 billion on new electric-vehicle battery plants as part of the Obama administration's economic stimulus, but many of those plants now run at just 15% to 20% of capacity.
"My first reaction was that Elon Musk is Superman -- he can do anything," said Henry Sun, chief financial officer of the Chinese battery maker Highpower International Inc. "But my second reaction was, I'm kind of worried about it."
Meanwhile, officials in Arizona, Nevada, New Mexico and Texas are trying to lure the Silicon Valley-based maker of electric cars to their state. Mr. O'Connell and other Tesla officials are in the final stages of vetting sites in those states.
Texas Gov. Rick Perry is said to be leading negotiations. He told Fox Business recently that he could support overhauling state laws that block Tesla from operating company-owned retail car stores so the Gigafactory and its jobs don't go elsewhere. "The cachet of being able to say we put that manufacturing facility in [our] state is hard to pass up," he said.
In Arizona, legislators are pushing through bills to allow Tesla to sell cars without franchised dealerships. New Mexico may call a special legislative session to create incentives for the factory. And Nevada, which is rich in natural resources like lithium and the closest to Tesla's car factory in the Oakland suburb of Fremont, Calif., has already had Tesla officials visit Reno to look at sites.
Tesla aims to reduce the cost of its battery pack by 30% when the battery plant opens in 2017. It won't disclose the current cost, but analysts say the 85 kilowatt-hour pack on the Tesla Model S, a car whose price starts at $80,000, probably costs between $21,250 and $25,500.
Reducing battery costs is critical for Tesla's forthcoming mass-market car, which is referred to as the Gen III and is expected to have a starting price of around $35,000.
Tesla's growth in 2013 was held back by a lack of batteries. Supplier Panasonic Corp. is hoping to remedy that with a supply of two billion cells. But those may not be enough once Tesla introduces its higher-volume Gen III vehicle.
Tesla, with sales of just over 22,400 cars last year, is already the largest buyer of lithium-ion battery cells in the world. With plans to sell 500,000 vehicles, its own demand would be greater than the demand for every laptop, mobile phone and tablet sold in the world.
Mr. Musk is leading direct negotiations with Yoshihiko Yamada, who heads Panasonic's automotive and industrial systems subsidiary, to invest in the new Gigafactory and run battery-cell production.
Panasonic CEO Kazuhiro Tsuga sounded a cautious note late last month.
"There's no doubt that [the new plant] will entail a far bigger risk than the current investment we're making. I cannot disclose our investment stance at this point," Mr. Tsuga said.
Harald Kroeger, who runs Daimler AG's electric-vehicle programs and sits on Tesla's board, said the factory "has some advantages of course, but it has some huge disadvantages as well."
Sam Jaffe, a battery consultant with Navigant Research, says the companies he consults for don't understand why Tesla would build such a large factory. Tesla may want to make 35 gigawatt hours of cells a year, they say, but battery makers maintain the benefits of scale disappear at about one gigawatt hour of capacity.
Wall Street is betting on Tesla. The Palo Alto, Calif., company raised a formidable $2 billion through a convertible-bond offering last month. Not long ago, getting the capital to pull off a project like this would have been the biggest challenge, but Tesla's market capitalization of nearly $31 billion has given it considerable leverage to raise more money.
The risks of going ahead with the Gigafactory project start with the tight construction timetable. "There are very few factories of 10 million square feet built all at once," says Randy Abdallah, executive vice president of Walbridge Aldinger, one the world's leading factory-construction firms. But he believes Mr. Musk's plan is doable. "There are solutions if you are willing to pay the cost," he says.
Mr. Musk's vision for lowering costs at the plant includes tying up sources for the primary metals and materials that go into batteries, such as cobalt.
Erin Chutters, the chief executive of Global Cobalt Corp., a mining company with plans to open a mine in Russia, says the "Gigafactory" demand, even if it reaches only a third of the anticipated size, would either lead to a sharp rise in cobalt prices or force several new mines to be opened.
"The only question I have is whether they will actually be able to sell that many cars," she says. "Are there really enough people out there that will switch over?"
---
Kana Inagaki contributed to this article.
Credit: By Mike Ramsey
Subject: Batteries; Site selection; Factories
Location: Southwestern states United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry; 8650: Electrical & electronics industries
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2014
Publication date: Apr 2, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1511757357
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1511757357?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reprodu ced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Breaks Norway's All-Time Sales Record; Company Sold 1,493 Electric Model S Sedans to Norwegians in March
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Apr 2014: n/a.
ProQuest document link
Abstract:
Tesla, like Nissan Motor Co. and Mitsubishi Motors Corp., has looked to the Scandinavian nation as one of the most important markets for electric cars in the world.
Full text: Tesla Motors' hot streak in its No. 2 market Norway gained additional steam in March, with its electric Model S sedan breaking the previous record for monthly sales of a single model--regardless of how it is powered--in the small Nordic nation.
The Silicon Valley-based maker of electric cars sold 1,493 Model S sedans to Norwegians in March, according to registrations reported by Norwegian transportation officials, more than double its typical monthly sales in Norway and well in excess of volumes typical for the top monthly seller in that market. Tesla, like Nissan Motor Co. and Mitsubishi Motors Corp., has looked to the Scandinavian nation as one of the most important markets for electric cars in the world.
Volkswagen AG's Golf was the second-best seller during the period, with 624 deliveries.
Norway, with just 5 million residents, has caught the attention of the global auto industry due to its aggressive drive to incentivize green vehicle sales.
The nation, enriched by a booming oil and gas industry, offers electric-vehicle owners generous tax incentives and Norway is dotted with stations where drivers of these cars can charge up for free. In addition, many municipalities allow green vehicles access to high-speed driving lanes or free charging and parking in city lots.
The Nissan Leaf was Norway's top seller in February, by comparison, with deliveries reaching 484 cars. In March 2013, Volkswagen sold 555 Golfs, making it the top seller during that period.
Tesla's March performance topped Norway's previous single-market record, which dates back to 1986 when the Ford Motor Co. sold 1,454 Sierra sedans in a single month. Subaru's Forrester fell just short of that mark in 1992 with 1,328.
Tesla has four dealers in Norway, including a pair in Oslo and two more on the west coast. It raced to the top of Norway's automotive market in September, shortly after going on sale, and has remained wildly popular even as some in the nation have criticized the government for handing out tax incentives for a vehicle considered to be a significant luxury.
Esben Petersen, a Tesla spokesman, said "Norway is a small country and there is huge demand for our cars." He said the nation is a leader when it comes to per capita demand for electric cars.
The auto maker, however, has hit speed bumps despite its popularity. In February, Chief Executive Elon Musk apologized to customers for an issue that made it hard for owners to charge their cars due to a Tesla adapter that didn't properly interact with the Norwegian grid.
Credit: John D. Stoll
Subject: Electric vehicles; Automobile sales; Automobile industry
Location: Norway
People: Musk, Elon
Company / organization: Name: Mitsubishi Motors Corp; NAICS: 336111; Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Nissan Motor Co Ltd; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Apr 2, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1511947310
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1511947310?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Rolls Out New Business Leasing Program; Auto Leases to be Made Available to Small and Mid-Size Businesses
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Apr 2014: n/a.
ProQuest document link
Abstract:
Tesla said it arranged with U.S. Bancorp and Wells Fargo to structure leases that allow consumers to put the value of federal and state electric-car tax credits, which range from $7,500 to $15,000, toward the cost of a down payment.
Full text: Tesla Motors Inc. said it created a new finance arm and is offering a business leasing program for small and medium-size businesses, providing another financing option for its electric cars.
The new program is the company's first "fleet" business--or sales to corporations or governments instead of to individuals. The initial offering is through Tesla Finance, a new subsidiary that the company set up to handle the leasing.
Tesla said it created the new leasing program at the request of small and medium-size businesses that would like to deduct the lease from business expenses for tax purposes. A year ago, Tesla started a leasing program where the company agreed to buy back the Model S at the end of a term--or let the customer purchase the car for its remaining value.
Elon Musk, chief executive of the Palo Alto, Calif.-based company, has said in the past that he expects a greater percentage of purchases to become leases over time.
The new internal finance division eventually could be used for retail customers, but there are no plans today to offer that service, a spokeswoman said.
Last April, Tesla unveiled lease financing for its electric cars to customers. Tesla said it arranged with U.S. Bancorp and Wells Fargo to structure leases that allow consumers to put the value of federal and state electric-car tax credits, which range from $7,500 to $15,000, toward the cost of a down payment.
The new business leasing program was announced the same day a report from Barclays noted that demand for the Model S may have plateaued in the U.S. The high-end electric car starts at $71,000 and often sells for more than $100,000. Using third-party data collectors, Barclays estimated that deliveries in the U.S. have leveled off, putting the onus on its China sales for continued sharp revenue growth.
"We believe that Model S demand in the U.S. has plateaued, leaving international sales to pick up the growth slack. Within International, with seemingly soft European sales outside of Norway, Tesla will be dependent on strong Chinese demand," Barclays analyst Brian Johnson wrote. "While we expect strong initial interest from early adopters in China, we see challenges to broader luxury market adoption."
Its deliveries in the U.S. have slowed, Barclays estimated, forecasting first quarter sales of 3,800 cars, compared with 4,100 in the fourth quarter. Some of that slowing is because Tesla is shifting deliveries to Europe and China, but Mr. Johnson said there are other signs that in the U.S., customers' wait time for a vehicles has shortened to a few weeks, from a few months.
Tesla says its production continues to be constrained.
Tesla's stock has come down 19% since March 4 to $207 on Monday. Shares recently were trading up 2.5% to $212.69. Mr. Johnson is forecasting strong first quarter results from Tesla.
Credit: Mike Ramsey
Subject: International markets; Electric vehicles; Business expenses
Location: United States--US China
People: Musk, Elon
Company / organization: Name: US Bancorp-Minneapolis MN; NAICS: 522110, 551111; Name: Wells Fargo & Co; NAICS: 522110, 551111; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Apr 8, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1513337226
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1513337226?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Where Do You Get a Direct-Sale Car Fixed?; There is some merit to the New Jersey position on car franchises. One question, if you purchase a Tesla from one of these "retail stores" where do you bring it to be repaired when something goes wrong?
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Apr 2014: n/a.
ProQuest document link
Abstract: None available.
Full text: Regarding the letters of April 7 on the New Jersey law requiring Tesla to sell cars only through dealers: There is some merit to the New Jersey position on car franchises.
One question: If you purchase a Tesla from one of these "retail stores," where do you bring it to be repaired when something goes wrong? Seems obvious that consumers (albeit the one-percenters) wouldn't have an easy time obtaining basic services that "full service" dealerships offer.
Vincent D'Antonio Sr.
Totowa, N.J.
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Apr 14, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1515703962
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1515703962?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Arizona Will Likely Keep Ban on Tesla Stores for Now; Bill That Would Have Allowed Tesla to Have Its Own Stores Died in State Senate
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Apr 2014: n/a.
ProQuest document link
Abstract:
The legislature's failure to address obstacles to Tesla's retailing operations in the state could complicate the state's bid to be the site for a big electric car battery factory that the Silicon Valley auto maker wants to build.
Full text: Tesla Motors Inc. will remain blocked from selling cars at company-owned dealerships in Arizona for at least another year because a bill that would have made it possible died in the state senate.
The legislature's failure to address obstacles to Tesla's retailing operations in the state could complicate the state's bid to be the site for a big electric car battery factory that the Silicon Valley auto maker wants to build.
Sen. John McComish, a Republican whose district runs south of Phoenix, said the failure of his proposal to allow Tesla to sell vehicles through its own stores "doesn't help our chances" to land the battery plant, which Tesla Chief Executive Elon Musk has called the "gigafactory." Tesla says the battery plant could employ 6,500 people.
Sen. McComish said he knows there are "negotiations going on regarding several locations in Arizona," but he didn't have any more information about where Arizona stood in the effort to attract the plant. Nevada, Texas and New Mexico also are in the running.
"There was never any guarantee, and nobody implied that there was a quid pro quo at all," he said. "But simply put, it doesn't help our chances" to get the plant, he said. The bill won't make it to the floor for a vote this session, which will end in about a week, Sen. McComish said. This means it will be another year at the earliest before new legislation could be debated.
Bobbi Sparrow, the president of the Arizona Auto Dealers Association, said legislators in Arizona weren't swayed by the argument that the state could lose the investment.
Tesla's "PR firm was leveraging that argument through the legislative session, but legislators here weren't buying it," she said. "It was never really on the minds of legislators here in this state."
Last month Tesla suffered a blow in New Jersey where the state's Motor Vehicle Commission revoked Tesla's dealership licenses. Tesla was forced to turn its two dealerships into galleries, where cars could be displayed but not sold or marketed. Arizona, Texas and New Jersey have laws requiring the use of franchised dealers only to sell vehicles.
"We're continuing our state-by-state fight, and we are encouraged that there are legislators around the country that understand our business model," said James Chen, vice president of regulatory affairs for Tesla. "The dealers continue to be a formidable political force that seem intent on maintaining their monopolies."
Credit: Mike Ramsey
Subject: Automobile dealers; Legislators; Bills
Location: Texas Arizona
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Apr 14, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1515720740
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1515720740?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla's Delays Upset Some China Customers; Electric-Vehicle Maker Plans Its First Model S Delivery in Country for Tuesday
Author: Murphy, Colum
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Apr 2014: n/a.
ProQuest document link
Abstract:
[...]Tesla said that, in China, as long as a customer has a designated parking space--in an apartment building, an individual house or at a workplace--its service technicians will provide the customer with a secure electrical wiring plan and help install the wall connector.
Full text: BEIJING--A group of disgruntled Tesla Motors Inc. customers in China is protesting delayed deliveries of their cars one day before the electric-vehicle maker is set to make its first China delivery.
The furor underscores the challenges facing auto makers in marketing new-energy vehicles in China, which so far hasn't delivered on the promise of becoming a major new market for electric cars.
Tesla's launch had been heralded as a possible catalyst that could push China farther down the electric-car path. The Palo Alto, Calif., company said in January that it would sell its Model S for $121,000 in China and compete with luxury brands like BMW AG and Volkswagen AG's Audi. Tesla is set on Tuesday to hand over the company's first Model S to a buyer in China at a high-profile event that is scheduled to feature Tesla Chief Executive Elon Musk.
Now, some once-enthused customers like Sam Long are unhappy with the reason he says Tesla is offering to explain the delivery delays. "The company told me they are still training electricians in Zhuhai," said Mr. Long, referring to the southern Chinese city where he lives. "I feel my rights have been hurt."
Mr. Long, a 37-year-old businessman, said he ordered his Model S last year but that as of Monday the Tesla website showed his car has yet to be manufactured. Mr. Long and 22 other consumers who booked Tesla cars have recently hired attorneys to negotiate with Tesla over the delivery, he said.
Tesla spokesman Simon Sproule said the company wouldn't ship to customers outside the major cities of Beijing and Shanghai until June because of a lack of service centers and charging considerations. "You would never sell any brand unless you have the tools to service it," he said.
Mr. Sproule added that the company is in an "ongoing dialogue" with the customers. (In the U.S., some Tesla buyers have waited for as long as three or four months to get their cars.)
Tesla doesn't report order numbers, only deliveries on a quarterly basis, Mr. Sproule said. In a January interview, Mr. Musk said he would consider it a success if Tesla sold 5,000 vehicles or more in China this year.
China has set itself the ambitious goal of putting 500,000 plug-in hybrid and electric vehicles on the road by next year and five million by 2020. Beijing is hoping so-called green cars will help battle chronic pollution and give a much-needed boost to Chinese auto makers by encouraging them to pioneer such vehicles. Such cars could also help reduce the country's dependency on imported oil.
Now China looks increasingly like it will miss its goal. In 2013, about 1,005 plug-in hybrids and 11,410 electric vehicles were sold in the country, according to data from consultancy Automotive Foresight.
Central and local governments offer generous incentives to encourage consumers to buy environmentally friendly cars made by certain Chinese car manufacturers. Some cities exempt car buyers from expensive license-plate fees, which some municipalities impose in an effort to reduce traffic.
But a significant stumbling block is the lack of charging infrastructure in China. There is still a dearth of public places to recharge cars--the city of Shanghai for example only has few hundred charging stations, according to Andreas Graef, principal at consultancy A.T. Kearney's office there. Prohibitive investment costs and low financial returns mean state utility providers have little incentive to build the stations, although there are signs this might change as the providers reach out to more private investors, he said.
Issues related to individual charging facilities, whether at home or the office, appear to be a factor explaining Chinese buyers' current displeasure with Tesla.
But Tesla said that, in China, as long as a customer has a designated parking space--in an apartment building, an individual house or at a workplace--its service technicians will provide the customer with a secure electrical wiring plan and help install the wall connector.
"We'll also work with property management to find a solution that everyone is happy with. We work with the customer to make sure they have a proper charging option as part of the sales-and-delivery process," Mr. Sproule said.
Tesla is recruiting and training electricians so customers can pay to have them help with charging, he said.
Mr. Graef also said typical new-energy vehicles are less comfortable and spacious compared with more popular cars in China such as sport-utility vehicles.
He added that the Beijing auto show, currently taking place, offers encouraging signs that more appealing new-energy vehicles are in the pipeline from car manufacturers, citing an electric vehicle developed by Daimler AG and Chinese car company BYD Co.
Fans of Tesla in China include some of the country's most prominent executives, such as Lei Jun, founder of Chinese smartphone brand Xiaomi Inc. Last year, Mr. Lei posted a photo online of his meeting with Mr. Musk.
On the sidelines of the Detroit auto show in January, Tesla outlined plans to build a supercharger network in China that would allow owners to travel between one place and another, such as between Beijing and Shanghai, stopping off along the way to supercharge their cars.
The same month, Tesla said a Model S with an 85-kilowatt-hour battery pack would be priced in China starting at 734,000 yuan--essentially the U.S. price plus Chinese taxes, duties and transportation costs.
"We're betting on doing the right thing and that consumers recognize...that we're not taking advantage of them," Mr. Musk said in the January interview, referring to Tesla's pricing policy for China.
That isn't enough for buyers like Mr. Long. "We want Mr. Musk to give us an explanation," Mr. Long said.
Credit: Colum Murphy
Subject: Electric vehicles; Automobile industry; Customer services
Location: China
People: Musk, Elon
Company / organization: Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Apr 21, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1517928155
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1517928155?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-20
Database: The Wall Street Journal
Service for Direct-Sale Cars Isn't That Hard; Tesla lists their service centers on their website, in which they claim that nine of 10 people live within 100 miles of one of their warranty service sites.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Apr 2014: n/a.
ProQuest document link
Abstract:
[...]the Tesla site mentions an option of service "rangers"; that is personnel who will come to your home or business to perform basic maintenance at your convenience.
Full text: In response to the letter from Vincent D'Antonio Sr., under the headline "Where Do You Get a Direct-Sale Car Fixed" (April 15), Tesla lists its service centers on its website, in which it claims that nine of 10 people live within 100 miles of one of its warranty service sites. There is one in my hometown. There is also the option, the one most of us choose once our cars go out of warranty, of going to an independent mechanic.
Admittedly, mechanics trained in the maintenance of electric vehicles may not be all that common now, but their numbers will grow as the number of hybrids and full electrics grow every year. Finally, the Tesla site mentions an option of service "rangers"; that is personnel who will come to your home or business to perform basic maintenance at your convenience. Yet another innovation that traditional dealers have no incentive to offer.
Tony Howlett
Austin, Texas
Subject: Warranties
Location: Texas
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Apr 21, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1517941512
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1517941512?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Delayed Teslas Upset Buyers in China --- Furor Reflects Difficulties Auto Makers Face in Selling New-Energy Vehicles in Major Asian Market
Author: Murphy, Colum
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]22 Apr 2014: B.7.
ProQuest document link
Abstract:
[...]Tesla said that, in China, as long as a customer has a designated parking space -- in an apartment building, an individual house or at a workplace -- its service technicians will provide the customer with a secure electrical wiring plan and help install the wall connector.
Full text: BEIJING -- A group of disgruntled Tesla Motors Inc. customers in China is protesting delayed deliveries of their cars one day before the electric-vehicle maker is set to make its first China delivery.
The furor underscores the challenges facing auto makers in marketing new-energy vehicles in China, which so far hasn't delivered on the promise of becoming a major new market for electric cars.
Tesla's launch had been heralded as a possible catalyst that could push China further down the electric-car path. The Palo Alto, Calif., company said in January that it would sell its Model S for $121,000 in China and compete with luxury brands like BMW AG and Volkswagen AG's Audi. Tesla is set on Tuesday to hand over the company's first Model S to a buyer in China at a high-profile event that is scheduled to feature Tesla Chief Executive Elon Musk.
Now, some once-enthusiastic customers like Sam Long are unhappy with the reason he says Tesla is offering to explain the delivery delays. "The company told me they are still training electricians in Zhuhai," said Mr. Long, referring to the southern Chinese city where he lives. "I feel my rights have been hurt."
Mr. Long, a 37-year-old businessman, said he ordered his Model S last year, but that as of Monday, the Tesla website showed his car has yet to be manufactured. Mr. Long and 22 other consumers who booked Tesla cars have recently hired attorneys to negotiate with Tesla over the delivery, he said.
Tesla spokesman Simon Sproule said the company wouldn't ship to customers outside the major cities of Beijing and Shanghai until June because of a lack of service centers and charging considerations. "You would never sell any brand unless you have the tools to service it," he said.
Mr. Sproule added that the company is in an "ongoing dialogue" with the customers. (In the U.S., some Tesla buyers have waited for as long as three or four months to get their cars.)
Tesla doesn't report order numbers, only deliveries on a quarterly basis, Mr. Sproule said. In a January interview, Mr. Musk said he would consider it a success if Tesla sold 5,000 vehicles or more in China this year.
China has set itself the ambitious goal of putting 500,000 plug-in hybrid and electric vehicles on the road by next year and five million by 2020. Beijing hopes so-called green cars will help battle chronic pollution and give a much-needed boost to Chinese auto makers by encouraging them to pioneer such vehicles. Such cars could also help reduce the country's dependency on imported oil.
Now China looks increasingly like it will miss its goal. In 2013, about 1,005 plug-in hybrids and 11,410 electric vehicles were sold in the country, according to data from consultancy Automotive Foresight.
Central and local governments offer generous incentives to encourage consumers to buy environmentally friendly cars made by certain Chinese car manufacturers. Some cities exempt car buyers from expensive license-plate fees, which some municipalities impose in an effort to reduce traffic.
But a significant stumbling block is the lack of charging infrastructure in China. There is still a dearth of public places to recharge cars -- the city of Shanghai for example has only a few hundred charging stations, according to Andreas Graef, principal at consultancy A.T. Kearney's office there. Prohibitive investment costs and low financial returns mean state utility providers have little incentive to build the stations, although there are signs this might change as the providers reach out to more private investors, he said.
Issues related to individual charging facilities, whether at home or the office, appear to be a factor explaining Chinese buyers' current displeasure with Tesla.
But Tesla said that, in China, as long as a customer has a designated parking space -- in an apartment building, an individual house or at a workplace -- its service technicians will provide the customer with a secure electrical wiring plan and help install the wall connector.
"We'll also work with property management to find a solution that everyone is happy with. We work with the customer to make sure they have a proper charging option as part of the sales-and-delivery process," Mr. Sproule said.
Tesla is recruiting and training electricians so customers can pay to have them help with charging, he said.
Mr. Graef also said typical new-energy vehicles are less comfortable and spacious compared with more popular cars in China such as sport-utility vehicles.
He added that the Beijing auto show, currently taking place, offers encouraging signs that more appealing new-energy vehicles are in the pipeline from car manufacturers, citing an electric vehicle developed by Daimler AG and Chinese car company BYD Co.
Fans of Tesla in China include some of the country's most prominent executives, such as Lei Jun, founder of Chinese smartphone brand Xiaomi Inc. Last year, Mr. Lei posted a photo online of his meeting with Mr. Musk.
---
Rose Yu and Yang Jie contributed to this article.
Credit: By Colum Murphy
Subject: Customer services; Electric vehicles; Automobile industry
Location: China
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 9179: Asia & the Pacific
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.7
Publication year: 2014
Publication date: Apr 22, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1517992312
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1517992312?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla CEO Pledges to Build Up Support Network in China; Musk Offers New Details on Plans to Broaden Use of Auto Maker's Electric Car
Author: Murphy, Colum
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Apr 2014: n/a.
ProQuest document link
Abstract:
BEIJING--Tesla Motors Inc. Chief Executive Elon Musk pledged to enhance the auto maker's support network in China to help broaden use of the company's niche electric car, and offered new details about a $5 billion battery factory Tesla plans to build in the U.S. Speaking in Beijing Tuesday at a ceremony marking the first handover of a Tesla vehicle to a customer in China, Mr. Musk said U.S.-based Tesla is building out hundreds of service centers around China but didn't offer a time frame for their completion.
Full text: BEIJING--Tesla Motors Inc. Chief Executive Elon Musk pledged to enhance the auto maker's support network in China to help broaden use of the company's niche electric car, and offered new details about a $5 billion battery factory Tesla plans to build in the U.S.
Speaking in Beijing Tuesday at a ceremony marking the first handover of a Tesla vehicle to a customer in China, Mr. Musk said U.S.-based Tesla is building out hundreds of service centers around China but didn't offer a time frame for their completion.
"At least right now we just don't see demand as being a constraint," he said. "It's more [about] scaling up production and ensuring the charging and service infrastructure in China and elsewhere is in good shape."
Tesla has already hit a speed bump in that regard, as some customers in China complained the company wouldn't deliver cars to them. Tesla had said it won't deliver vehicles outside the cities of Beijing and Shanghai until it is sure customers have the right technical support and charging facilities in their regions.
Mr. Musk said he apologized Tuesday when he met with representatives of the group of 23 consumers who complained.
"I think we've resolved that, at least based on my meeting this morning," he said.
Sam Long, a resident of Zhuhai, China, and a member of the consumer group, said Tesla promised to start building the delayed cars.
Mr. Musk said Tesla would ship cars to those customers as soon as it is sure they have charging facilities at their homes or businesses if they choose, "even if the service center is still pretty far away."
He declined to give a firm estimate for Tesla sales in China for 2014. Earlier this year, he said he would be happy if Tesla sold 5,000 cars in the country. "If I were to guess, it might be higher than that," he said. "It's too early to tell."
Tesla will be looking to sway potential buyers like Hu Jinhui. The 36-year-old information-technology worker inspected a Tesla Model S in eastern Beijing on Monday and said the experience was "wonderful." Still, he said the 734,000 yuan ($117,500) car is "too expensive. It's beyond my means." He added: "Are there sufficient charging stations in Beijing?"
Guo Xiaodong, a 46-year-old travel executive and Tesla buyer, said Tesla installed his charging gear and that the installation is easy for those with a permanent parking spot at home or work. Mr. Guo said he and his wife will probably use the car mainly for city driving. "We're a little concerned about range because there are not so many superchargers," he said, adding, "when you go beyond the city, it's a concern."
Also Tuesday, Mr. Musk said Panasonic Corp. will likely be Tesla's partner in a planned $5 billion U.S. battery factory. "I would be surprised if Panasonic is not our partner," he said, adding that he expects other partners to be involved. He said he expects Tesla to be in a position to release more news about the proposed factory in two or three months.
In an email, Panasonic said nothing has been decided but added it will consider options to strengthen its relationship with Tesla.
At a news conference last month, Panasonic President Kazuhiro Tsuga struck a cautious tone when asked whether the company would invest in the battery plant proposed by Tesla. "There's no doubt [that the new plant] will entail a far bigger risk than the current investment we're making," Mr. Tsuga said. "I cannot disclose our investment stance at this point."
Mr. Musk said recent comments by Mr. Tsuga were "misinterpreted."
The Japanese company has already signed an agreement to provide two billion battery cells to Tesla through 2017.
Credit: Colum Murphy
Subject: Research & development--R & D; Automobile industry; Customer services
Location: United States--US China
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Apr 22, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1518025696
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1518025696?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Tesla Powers Up Its Support Network for China
Author: Murphy, Colum
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]23 Apr 2014: B.6.
ProQuest document link
Abstract:
Tesla Motors Inc. Chief Executive Elon Musk pledged to enhance the auto maker's support network in China to help broaden use of the company's electric car, and offered new details about a $5 billion battery factory Tesla plans to build in the U.S. Speaking in Beijing on Tuesday at a ceremony marking the first handover of a Tesla vehicle to a customer in China, Mr. Musk said U.S.-based Tesla is building out hundreds of service centers around China but didn't offer a time frame for their completion.
Full text: BEIJING -- Tesla Motors Inc. Chief Executive Elon Musk pledged to enhance the auto maker's support network in China to help broaden use of the company's electric car, and offered new details about a $5 billion battery factory Tesla plans to build in the U.S.
Speaking in Beijing on Tuesday at a ceremony marking the first handover of a Tesla vehicle to a customer in China, Mr. Musk said U.S.-based Tesla is building out hundreds of service centers around China but didn't offer a time frame for their completion.
"At least right now we just don't see demand as being a constraint," he said. "It's more [about] scaling up production and ensuring the charging and service infrastructure in China and elsewhere is in good shape."
Tesla has already hit a speed bump in that regard, as some customers in China complained the company wouldn't deliver cars to them. Tesla had said it won't deliver vehicles outside the cities of Beijing and Shanghai until it is sure customers have the right technical support and charging facilities in their regions.
Mr. Musk said he apologized Tuesday when he met with representatives of the group of 23 consumers who complained.
"I think we've resolved that, at least based on my meeting this morning," he said.
Sam Long, a resident of Zhuhai, China, and a member of the consumer group, said Tesla promised to start building the delayed cars.
Mr. Musk said Tesla would ship cars to those customers as soon as it is sure they have charging facilities at their homes or businesses if they choose, "even if the service center is still pretty far away."
Also Tuesday, Mr. Musk said Panasonic Corp. will likely be Tesla's partner in a planned $5 billion U.S. battery factory. "I would be surprised if Panasonic is not our partner," he said, adding that he expects other partners to be involved. He said he expects Tesla to be in a position to release more news about the proposed factory in two or three months.
In an email, Panasonic said nothing has been decided but added it will consider options to strengthen its relationship with Tesla. The Japanese company has already agreed to provide two billion battery cells to Tesla through 2017.
Credit: By Colum Murphy
Subject: Research & development--R & D; Automobile industry; Market penetration; Customer services; Electric vehicles
Location: United States--US China
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9180: International; 9110: Company specific; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.6
Publication year: 2014
Publication date: Apr 23, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1518213934
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1518213934?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permi ssion of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
FTC Blog: Laws Preventing Sales by Car Makers Like Tesla Are 'Bad Policy'; Position Paper by Commission Staff Says State Laws Meant to Protect Became 'Protectionist'
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Apr 2014: n/a.
ProQuest document link
Abstract:
Staffers at the Federal Trade Commission said the laws around the country that limit direct sales of automobiles by manufacturers such as Tesla Motors Inc. are "bad policy" that hinder consumer choice and business growth.
Full text: Staffers at the Federal Trade Commission said the laws around the country that limit direct sales of automobiles by manufacturers such as Tesla Motors Inc. are "bad policy" that hinder consumer choice and business growth.
The experts who work at the agency made the comments in a blog post on its Web page on Thursday and referenced Tesla directly.
"Instead of 'protecting,' these state laws became 'protectionist,' perpetuating one way of selling cars--the independent car dealer," the blog post reads. The blog post says the opinion doesn't reflect an official statement of the commission or its individual members.
The position paper was the joint effort of Andy Gavil, the director of the commission's Office of Policy Planning; Debbie Feinstein, director of the Bureau of Competition; and Marty Gaynor, director of the Bureau of Economics, according to the blog post.
The position by the trade body adds to the mounting expert opinions that find little support for the laws that have limited Tesla's ability to sell cars through company-owned stores. Dealers in nearly every state have launched political campaigns to try to halt or limit Tesla's ability to sell directly to customers.
The issue came to a head in New Jersey when the Motor Vehicle Commission pulled Tesla's dealer license and forced it to stop selling vehicles at two stores in that state. Last month, more than 70 lawyers and economists signed on to a letter from the International Center for Law & Economics to Gov. Chris Christie to reconsider the decision in New Jersey as it offered little consumer protection and only served to reduce competition.
In other states, such as New York and Ohio, Tesla has reached compromises with dealers to limit the number of stores it operates. Tesla didn't immediately comment on the FTC's posting.
Tesla has maintained that it is committed to selling vehicles directly to consumers, at least until sales of its electric vehicles are well established and at higher volume. Chief Executive Officer Elon Musk says that traditional franchised dealers don't have a strong incentive to push the technology and that the sales experience needs to be tightly controlled, initially.
Credit: Mike Ramsey
Subject: Consumer protection; Automobile dealers; Vehicles; Automobile sales
Location: New Jersey
People: Musk, Elon Christie, Christopher J
Company / organization: Name: Federal Trade Commission--FTC; NAICS: 926150; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Apr 24, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1518711812
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1518711812?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Reports Loss on Higher Research Costs; Expenses at Luxury Car Maker Rise Ahead of Launch of New Sports-Utility Vehicles
Author: White, Joseph B; Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 May 2014: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. shares fell in after-market trading Wednesday after the Silicon Valley electric-car maker reported a net loss of $49.8 million for the first quarter, reflecting a surge in costs associated with expanding its product lineup and customer-service operations and launching a huge new battery factory.
Full text: Tesla Motors Inc. shares fell in after-market trading Wednesday after the Silicon Valley electric-car maker reported a net loss of $49.8 million for the first quarter, reflecting a surge in costs associated with expanding its product lineup and customer-service operations and launching a huge new battery factory.
Tesla Chief Executive Elon Musk disclosed during a conference call after the close of New York stock trading Wednesday that Panasonic Corp., manufacturer of the batteries used in his company's luxury electric cars, has signed a letter of intent to participate in construction of what he calls the for assembling vehicle batteries in the U.S.
Mr. Musk said Tesla plans to break ground on the first potential site for the factory next month, and start work on preparing a second possible site soon after. Tesla plans to start work on multiple sites as a hedge against regulatory or other delays. The company aims to start battery production by 2017, and Mr. Musk said he's confident of achieving a 30% reduction in battery costs per kilowatt hour.
Panasonic would be the only battery company producing cells in the factory, which is proposed to be 10 million square feet and cost as much as $5 billion, Mr. Musk said.
Panasonic, in a statement, confirmed that it has signed a letter of intent with Tesla. "The two companies have signed a letter of intent and are further deepening the level of their discussions on details of gigafactory collaboration," said Jim Reilly, a spokesman for Panasonic in the U.S.
Mr. Musk also disclosed that California "is back in the running" as a site for the factory. Previously California was off the list, he said, because of the "complex and lengthy" process of obtaining permits. Tesla plans to begin breaking ground on the first of two finalist sites in June, then a second site a few weeks later. Tesla is also looking at sites in Nevada, New Mexico, Texas and Arizona.
Mr. Musk's optimistic comments about his battery-factory project came after investors had sent the company's share price down more than 6% in after-market trading following the release of Tesla's first-quarter financial results.
The company forecast rising costs for vehicle engineering, new plants and other expansion moves that may have spooked investors, along with a forecast of another net loss in the second quarter. Tesla said capital spending exceeded operating cash flow by $80.7 million in the first quarter.
The Silicon Valley electric-luxury-car maker said it produced 7,535 Model S sedans in the January to March quarter, slightly more than its earlier forecast. Revenue for the latest quarter was $620.5 million, up 10% from a year earlier, but up less than 1% from the fourth quarter of 2013. Net orders for Model S sedans in North America grew by 10% from the fourth quarter, the company said. Model S deliveries in the U.S. fell, however, as more cars were shipped overseas.
The company forecast a marginal profit for the second quarter on a non-GAAP basis.
Research and development costs rose to $81.5 million in the latest quarter from $54.9 million a year ago. The company said it expects R&D expenses for the second quarter to grow by 30% from the first quarter. Much of that expense is related to development of the company's Model X sport-utility vehicle, which Tesla said would launch in the second quarter of 2015, a delay from earlier estimates of late this year or early next year.
Tesla raised $2.3 billion through convertible bond offerings in the first quarter, in part, to contribute toward building the battery factory, capable of making hundreds of thousands of battery packs for its vehicles.
Mr. Musk said he is optimistic about the prospects for Tesla in China, the world's largest car market. "I don't think we've got any kind of a demand challenge in China," he said, adding he's instructed employees working in the country to "spend money as fast as they can spend it without wasting it."Tesla is looking into building its vehicles in China within three or four years, he said, and could also build vehicles in Europe as sales expand.
Tesla said its automotive gross margins, measured on a non-GAAP basis, would increase slightly in the second quarter from the 25.4% reported for the first quarter. The company said a 28% automotive gross margin "is still an achievable target" by the fourth quarter. Analysts study this measure closely because it points to the efficiency and profitability of making and selling vehicles, during a period when heavy investment in research and development and capital lower overall margins.
Tesla said it plans to invest $650 million to $850 million in capital expenditures for the year to boost production, expand its service and charging networks, launch new models and start work on its battery factory.
The company said it is growing its internal production capability to meet growing demand for its Model S. Production is now at almost more than 700 vehicles a week, up 15% from its weekly production rate at the end of the fourth quarter. By the end of 2014, Tesla expects the production rate to rise to 1,000 vehicles a week.
Tesla's results, again, were dented by stock-based compensation for executives. Tesla said the share costs amounted to $37 million--or 30 cents a share. Other costs it subtracted in its accounting were non-cash expenses related to its convertible note and deferred profit related to lease accounting.
Write to Joseph B. White at and Mike Ramsey at
Credit: By Joseph B. White and Mike Ramsey
Subject: Net losses; Financial performance; Automobile industry; Costs; Vehicles; Investments; Shipments
Location: California United States--US New York
People: Reilly, Jim
Company / organization: Name: Panasonic Corp; NAICS: 335222, 335224, 333415; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: May 7, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1521743039
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1521743039?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Earnings: Tesla Loss Drives Its Shares Lower --- First-Quarter Drop Reflects Surge in Costs; Setting Plans for 'Gigafactory'
Author: White, Joseph B; Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 May 2014: B.5.
ProQuest document link
Abstract:
Tesla Motors Inc. shares fell in after-market trading Wednesday after the Silicon Valley electric-car maker reported a net loss of $49.8 million for the first quarter, reflecting a surge in costs associated with expanding its product lineup and customer-service operations and launching a huge new battery factory.
Full text: Tesla Motors Inc. shares fell in after-market trading Wednesday after the Silicon Valley electric-car maker reported a net loss of $49.8 million for the first quarter, reflecting a surge in costs associated with expanding its product lineup and customer-service operations and launching a huge new battery factory.
Tesla Chief Executive Elon Musk disclosed during a conference call after the close of New York stock trading Wednesday that Panasonic Corp., manufacturer of the batteries used in his company's luxury electric cars, has signed a letter of intent to participate in construction of what he calls the "gigafactory" for assembling vehicle batteries in the U.S.
Mr. Musk said Tesla plans to break ground on the first potential site for the factory next month, and start work on preparing a second possible site soon after. Tesla plans to start work on multiple sites as a hedge against regulatory or other delays. The company aims to start battery production by 2017, and Mr. Musk said he's confident of achieving a 30% reduction in battery costs per kilowatt hour.
Panasonic would be the only battery company producing cells in the factory, which is proposed to be 10 million square feet and cost as much as $5 billion, Mr. Musk said.
Panasonic, in a statement, confirmed that it has signed a letter of intent with Tesla. "The two companies have signed a letter of intent and are further deepening the level of their discussions on details of gigafactory collaboration," said Jim Reilly, a spokesman for Panasonic in the U.S.
Mr. Musk also disclosed that California "is back in the running" as a site for the factory. Previously California was off the list, he said, because of the "complex and lengthy" process of obtaining permits. Tesla plans to begin breaking ground on the first of two finalist sites in June, then a second site a few weeks later. Tesla is also looking at sites in Nevada, New Mexico, Texas and Arizona.
Mr. Musk's optimistic comments about his battery-factory project came after investors had sent the company's share price down more than 6% in after-market trading following the release of Tesla's first-quarter financial results.
The company forecast rising costs for vehicle engineering, new plants and other expansion moves that may have spooked investors, along with a forecast of another net loss in the second quarter. Tesla said capital spending exceeded operating cash flow by $80.7 million in the first quarter.
The Silicon Valley electric-luxury-car maker said it produced 7,535 Model S sedans in the January to March quarter, slightly more than its earlier forecast. Revenue for the latest quarter was $620.5 million, up 10% from a year earlier, but up less than 1% from the fourth quarter of 2013. Net orders for Model S sedans in North America grew by 10% from the fourth quarter, the company said. Model S deliveries in the U.S. fell, however, as more cars were shipped overseas.
The company forecast a marginal profit for the second quarter on a non-GAAP basis.
Research and development costs rose to $81.5 million in the latest quarter from $54.9 million a year ago. The company said it expects R&D expenses for the second quarter to grow by 30% from the first quarter. Much of that expense is related to development of the company's Model X sport-utility vehicle, which Tesla said would launch in the second quarter of 2015, a delay from earlier estimates of late this year or early next year.
Tesla raised $2.3 billion through convertible bond offerings in the first quarter, in part, to contribute toward building the battery factory, capable of making hundreds of thousands of battery packs for its vehicles.
Mr. Musk said he is optimistic about the prospects for Tesla in China, the world's largest car market. Tesla is looking into building its vehicles in China within three or four years, he said.
Credit: By Joseph B. White and Mike Ramsey
Subject: Net losses; Financial performance; Company reports; Stock prices
Location: United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry; 3100: Capital & debt management
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2014
Publication date: May 8, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1521903630
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1521903630?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reprod uction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Mercedes B-Class Hits the A-List of Electric Cars; The Mercedes B-Class Electric Drive shines as a completely on-point premium family electric that braids Tesla's and Mercedes' DNA very well
Author: Neil, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 May 2014: n/a.
ProQuest document link
Abstract:
First impression: [...]it couldn't be more familiar and obvious.
Full text: AND OVER HERE in the Appliance Department you'll now find the Mercedes-Benz B-Class Electric Drive, the firm's first proper, volume-production electric car: Five-seats, five doors, front-wheel drive, 85 miles of range, 42 grand or so before tax credits at the state and federal level. In all respects, just another ship in Mercedes' fleet.
First impression: The B-ED reeks of the same high-class domesticity as Mercedes' R-Class and M-Class breeders. Similar seats, same spill-resistant textures, mostly the same instruments and switchgear, including the knobby dealy in the center console to dial in navi, audio and vehicle systems. Love it or hate it, there, too, is Mercedes' 7-inch color display floating above ball vents in the dash center, looking like an abandoned iPad.
In any event, the B-ED is not weird. Actually, it couldn't be more familiar and obvious. The accelerator pedal might as well have "Schnell" written on it.
Got kids? Got a garage? Commute to the train station? Don't want to have to park a big German blimp every time you go out? Believe me, if your first Mercedes had a plug, you wouldn't be missing a thing.
Redesigned in 2011, the B-Class (tall family wagon) has been unavailable in the U.S. (but yes for Mexico and Canada). As part of the platform redesign, different versions of the vehicle floor stampings were created to accommodate batteries or compressed natural-gas storage. The B will be available in the States only as an EV. That fact, it's fair to say, won't supercharge model sales.
Mercedes execs are realistic. When I asked project manager Anton Sonntag how many he thought the company could sell, he shrugged and said: "As many as people will buy."
The B-ED is, realists would note, a "compliance car." The phrase refers to a low- or zero-emission vehicle model, built in whatever numbers necessary to satisfy some portion of California's clean-vehicle quota and typically sold only in California and 10 other clean-air states. The California Air Resources Board obliges major manufacturers to sell an incrementally rising percentage of advanced technology ZEV cars even if, and most assuredly when, they lose money on them.
Compliance cars put something of a strain on auto makers' communications departments, because the unspoken truth is so, um, unspeakable. So let's divide the B-ED's media debut last week in Silicon Valley into text and subtext. The subtext was regulatory compliance, and of a very expedient variety, too: Rather than rely on in-house R&D, Mercedes essentially contracted with Tesla--the Silicon Valley car maker and acknowledged leader in electric automobiles--to provide the EV architecture (motor, transmission, battery, power electronics) for its electron-fired B-Class.
The B-Class ED is the product of a technology-sharing alliance between Tesla and Daimler that goes back to Mercedes' 2009 investment. Tesla will make the B-Class battery pack, power management system and thrashy bits at the factory in Fremont, Calif., and ship them to Germany for final vehicle assembly.
Typically with advanced technology/compliance car projects--oh, the Honda Fit EV, for example--the manufacturer will convert an existing vehicle into an EV or plug-in EV, as cost effectively as possible. Then it will make, lease and sell as many units as it takes, at whatever price, to hit the company's compliance targets. Then, God willing, it will shut up about it, because each unit sold loses money. When these cars come up in conversation, auto executives start looking at their shoes.
But, from my tour of California's electric-car culture two weeks ago, I can tell you that is changing. As a class, these vehicles have fully outgrown whatever technical adolescence made them awkward in the first decade of this century. I've driven a gas-powered B-Class in Europe, and the Tesla-powered version is massively better.
One of these days, one of these compliance cars is going to break out, sales-wise. The B-Class ED, which will sell in all 50 states, could be the one. While it might have emerged out of a crass effort at compliance, the B-ED just shines, a completely on-point premium family electric that braids Tesla's and Mercedes' DNA so convincingly the car might as well be called the Model B.
The drive parts are Tesla's devising, including a 28 kwh lithium battery pack and power-management system. An electric motor rated at 132 kW, or 177 horsepower, and 251 pound-feet of torque, drive the front wheels through a single-ratio transmission. That is enough twist to pull the 3,924-pound vehicle to 60 mph in less than 8 seconds, while top speed is limited to 100 mph. Among its curiosities is the car's four levels of regenerative braking, accessed through the steering wheel-mounted paddles. On the most aggressive setting, the car slows crisply when you lift your foot off the accelerator, but it doesn't have the one-pedal operation of its rival, BMW i3.
The B-ED doesn't have supercharging capacity. With a 220V/40A Level 2 charger, it takes 3.5 hours to fully charge a depleted battery, says Mercedes, and 2 hours to raise levels to 60%.
Throughout my 50-mile test drive in the Bay area, the B-ED had great spirit under the spur. And due to its low center of gravity--the dense battery pack buried in the floor--the B-ED rides well and corners with a lot more confidence than its gas-powered twin, even though the electric weighs 700 pounds more.
Speaking of weight: The steel-bodied B-ED competes directly with BMW's new and radical, carbon-fiber and plastic-bodied BMW i3. Both are next-generation electric family cars priced in the low $40,000s, and both have roughly the same range, power and comparable performance. And yet the two cars are wildly different, reflecting the industrial strategies behind them. The BMW's advanced-materials approach to weight saving netted them a car weighing a mere 2,860 pounds, fully 1,064 pounds lighter than the B-ED.
The Mercedes' approach is more conservative, fiscally and technically. And we'll have to wait to see the comparative results. These are amazing, uncertain times in appliance sales.
Credit: Dan Neil
Subject: Automobile industry; Compliance
Location: California
Company / organization: Name: Air Resources Board-California; NAICS: 924110
Product name: Honda Fit
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: May 9, 2014
Section: Autos
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1522798780
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1522798780?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Toyota's RAV4 EV Supply Pact With Tesla to Expire in 2014; Expiration of Battery Pack Agreement Puts in Question Whether Automaker Will Continue With RAV4 Electric Vehicle
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2014: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc.'s supply agreement with Toyota Motor Corp. for the battery pack in the RAV4 electric vehicle will expire in 2014, putting in question whether Toyota will continue with the lightly-selling utility.
Full text: Tesla Motors Inc.'s supply agreement with Toyota Motor Corp. for the battery pack in the RAV4 electric vehicle will expire in 2014, putting in question whether Toyota will continue with the lightly-selling utility.
Toyota sells the RAV4 primarily in California with a base price of $49,800. The agreement calls for Toyota buying the powertrains and batteries for about 2,500 RAV4 EVs from Tesla. The 41.8 kilowatt-hour battery pack on the RAV4 gives it an EPA rated range of 103 miles, the second-longest all-electric range of any vehicle on the market behind Tesla's own Model S.
Toyota and Tesla struck the agreement not long after Akio Toyoda, the chief executive officer of Toyota, agreed to invest $50 million in Tesla.
Tesla said last week in a regulatory filing that it expects the supply arrangement to end this year.
In a statement, Toyota said: "As was the arrangement, battery-supply to the current model RAV4 will conclude this year when we reach the originally planned number vehicles. We don't have anything to report on future product plans. But we will continue to maintain a good relationship with Tesla and to evaluate the feasibility of working together on future collaborations."
Credit: Mike Ramsey
Subject: Automobile industry; Agreements; Electric vehicles
Location: California
People: Toyoda, Akio
Company / organization: Name: Environmental Protection Agency--EPA; NAICS: 924110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: May 12, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1523707937
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1523707937?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
BMW's Carbon Fiber Could Test Tesla
Author: Schultes, Renée
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2014: n/a.
ProQuest document link
Abstract: None available.
Full text: BMW isn't afraid to take a detour. The German auto maker will next month launch the i8, a plug-in hybrid sports car which could give Tesla Motors' Model S a run for its money.
Besides being a potential new driver for BMW's stock, the i8 represents a broader trend in the old car industry's efforts to refit itself for the modern age. That, more than one individual model, spells trouble for Tesla.
BMW's new car, made out of carbon-fiber-reinforced plastic, is part an effort that has cost [euro]750 million ($1.03 billion) so far to develop lighter, more powerful electric vehicles.
Vehicles such as the i8 and the lower-cost i3 electric compact could be more important to BMW than investors seem to think. First, they can open up new markets: Almost 70% of customers for the new i brand have never owned a BMW, according to ISI Group. The two i-brand models will likely straddle Tesla's Model S in terms of price and spec, suggesting the German auto maker could pick up at least some sales from its U.S. rival, notes Barclays.
Production could become meaningful quickly, thanks in part to the relatively simple manufacturing system that gets new models to market in about two years. BMW could increase production of i cars to 300,000 annually over the next five years, up from 23,200 this year, estimates ISI Group. Assuming an average selling price of [euro]35,000--the i3's starting price--and a 15% margin, these would generate [euro]1.6 billion of operating profit. That is equivalent to roughly one-fifth of forecast operating profit for the company this year.
The potential for using carbon-fiber-reinforced plastic, which is half the weight of steel, on BMW's wider fleet remains tough to gauge. While BMW says it will use the material, the cost, at several times that of steel, looks hard to swallow for now.
Yet BMW's stock doesn't seem to reflect much excitement about these efforts. At just under 10 times 2015 earnings per share, it trades in line with German rival Daimler and not far above Ford Motor. Investors may be pricing the option value on BMW's research spending too cheaply.
The flip side of this concerns Tesla, whose stock trades at more than 55 times estimated 2015 earnings. Tesla has developed highly lauded premium vehicles that are forcing older competitors to raise their game--not only BMW but also, for example, Ford with its new truck incorporating more aluminum.
A Tesla driver probably wouldn't be caught dead in an F-150, using more aluminum or otherwise. The point, though, is that the company's stock is predicated on rapid sales growth, and Tesla is a relative newcomer going up against large, established rivals. And the latter are, more and more, taking up Tesla's challenge--and crowding the road ahead of it.
Credit: Renée Schultes
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: May 12, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1523708076
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1523708076?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Missouri House Speaker Says Anti-Tesla Bill is Parked for Now; Bill To Prevent Tesla From Selling Cars Direct To Consumers Won't See Vote This Year
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 May 2014: n/a.
ProQuest document link
Abstract:
Legislation that would have prevented Tesla Motors Inc. from selling its electric luxury sedans directly to consumers in the state won't make it to the floor this year, Timothy Jones, the Speaker of the Missouri House of Representatives, told The Wall Street Journal.
Full text: Legislation that would have prevented Tesla Motors Inc. from selling its electric luxury sedans directly to consumers in the state won't make it to the floor this year, Timothy Jones, the Speaker of the Missouri House of Representatives, told The Wall Street Journal.
"I don't think it will make it this session," he said in an interview Wednesday. He said the bill would have to be reintroduced next year and would get a full hearing in both houses. Last week, the Missouri Senate attached an amendment to a Missouri House bill that would have outlawed Tesla's direct sales business model, which uses no franchised car dealers. It is the latest in a long string of battles pitting the Palo Alto, Calif., car maker against franchised auto dealers.
Tesla now appears to be at a point where it is holding the line in legislative battles with dealers, and coming up with compromises that allow it to operate a small number of stores in several states.
The state-by-state battles have been an obstacle for Tesla as it tries to expand its retail network across the country. In New Jersey, the Motor Vehicle Commission revoked Tesla's dealer licenses for its two stores in March. Tesla had been granted licenses a year earlier, but the state law required that dealers be franchised by an auto maker.
The forced closure of Tesla's two stores caused an uproar in the state and motivated new legislation to allow Tesla to operate up to four locations in the state. That legislation is now moving forward.
Louis Greenwald, the Vorhees, N.J. Democrat and Majority Leader who cosigned the House bill, said he is cautiously optimistic that the bill will come up for a vote in the next week or two and seems to have support to pass.
"In the conversations that I have had, I think there is a desire to get this done," he said. "I think we struck the right balance in recognizing consumer rights and the role that franchises play and allowing for the growth of an entrepreneurial company like Tesla."
The resolution in New Jersey is similar to compromises Tesla has reached in New York and Ohio in battles with dealers where Tesla is limited to a small number of stores.
Diarmuid O'Connell, the vice president of business development for Tesla, has said that the state-by-state battles have been difficult and a distraction, but have also helped Tesla to build support among consumers around the company.
Credit: Mike Ramsey
Subject: Automobile dealers; Bills; Legislation
Location: Missouri Palo Alto California New Jersey
Company / organization: Name: Vorhees; NAICS: 711130; Name: House of Representatives-Missouri; NAICS: 921120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: May 15, 2014
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1524664441
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1524664441?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Are Tesla's Plans for a Giant Battery Factory Realistic? The Electric-Car Company Hopes the Plant Drives Down Prices. Here's How the Experts View It.
Author: Chernova, Yuliya
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 May 2014: n/a.
ProQuest document link
Abstract:
Tesla's plan follows a largely failed effort by the Obama administration to create a large battery-manufacturing base in the U.S. Several manufacturers that built battery plants as part of that initiative went into bankruptcy after being caught with too much capacity when projected demand for electric cars failed to materialize. A Roll of the Dice Peter Wells is a professor of business and sustainability with a focus on the global automotive industry at Cardiff Business School's Centre for Automotive Industry Research, in Wales.
Full text: Tesla Motors Inc. plans to build one of the world's largest factories of any kind in the U.S. But it wouldn't build its electric cars there--it would make the batteries to power them.
The plant, slated for completion by 2020 at a cost of as much as $5 billion, would be able to turn out more lithium-ion batteries than all the battery factories in the world today. Tesla plans to break ground in June, though the site is still uncertain, and expects to start producing batteries at the plant by 2017. It says the scale will help drive the cost of batteries down, in turn helping to make a mass-market, all-electric car possible.
Tesla's plan follows a largely failed effort by the Obama administration to create a large battery-manufacturing base in the U.S. Several manufacturers that built battery plants as part of that initiative went into bankruptcy after being caught with too much capacity when projected demand for electric cars failed to materialize.
Against this backdrop, how realistic is Tesla's plan? We spoke with several experts in the field to get their takes. Below are edited excerpts of their responses.
We Haven't Invented It Yet
K.M. Abraham is a research professor at the Northeastern University Center for Renewable Energy Technology, has worked for 30 years on lithium battery technology, was one of the first to demonstrate rechargeable lithium batteries and invented next-generation lithium air batteries. He also has a battery consulting company called E-KEM Sciences.
I don't see how they can reduce the cost more than 20%. They are dependent on the whole battery community. We are already reaching the limit on the energy density you can get in the lithium-ion battery. Next-generation chemistries, such as lithium air, are another 25 years away from commercialization.
It won't be as simple as it has been so far. We'll need scientific discoveries in the electrode materials. Usually, from invention of battery materials to production it takes 15 to 20 years, and we haven't invented it yet.
As far as scale manufacturing, it's an already perfected business; just doubling the world production wouldn't get that much improvement per unit. The major producers in Korea, Japan, are using massive amounts of material already. And battery manufacturing is a very, very low-margin business at scale.
And [the major producers] are integrated manufacturers, they can put their battery cells into portable consumer devices, and they can make up the price there.
A Roll of the Dice
Peter Wells is a professor of business and sustainability with a focus on the global automotive industry at Cardiff Business School's Centre for Automotive Industry Research, in Wales.
Tesla is taking advantage of the moment to make an enormous roll of the dice.
You rush into these things at your peril. The reason the car industry has been so conservative is that there are major concerns with safety, reliability, customer confidence. That's the reason the industry has been very slow with adopting technologies.
The danger there is if Tesla cannot make this work, the whole electric-vehicle sector will be set back a lot.
But it could change the way we buy cars, we use cars, the revenue streams, the business models. In an industry that has hitherto been riddled by conservatism, this is a disruptive idea.
There's a lot of cost that can be taken out at larger scales of battery manufacturing. But it's all about the capacity utilization. A battery plant that's not running will cost you a fortune.
Better to Go Slow
Bill Reinert was national manager of Toyota Motor Sales U.S.A. Inc.'s advanced-technology group from 1990 to 2013. He co-led the U.S. product-planning team for the second-generation Prius and worked on several advanced hybrid electric products, direct hydrogen fuel-cell vehicles and plug-in hybrid concepts, among others.
We didn't anticipate Prius would sell like it did. There was at least a year or more where we couldn't increase sales because not just the battery but a whole host of other parts couldn't be ramped up quickly enough.
But the worst thing in the world you can do is plan for a high volume and not reach it. Then you've got all these factories that are idle, and all these workers who are idle, and all these parts that you ordered. It's better to slowly add to production when you are making a profit than to shut down lines when you are losing money.
Toyota can take a suspension they use on hundreds of thousands of cars and put it on a low-volume car. Volkswagen is the king of this. Tesla doesn't have that ability. It has to be bespoke, built from the ground up.
If I were in [Tesla Chief Executive Elon] Musk's shoes, I'd be on a jet tomorrow to go to [battery makers] LG Chem, Panasonic, GS Yuasa, and telling them this is our long-term projection. But if [they couldn't commit to meeting my needs], I wouldn't be discussing this grand design, this mythical plant.
What I would start out with would be bare-bones manufacturing and make sure that we are making as many of the product as we need.
Out in Front of Demand
David Vieau served as chief executive of A123 Systems from 2002 to 2012. The company, which manufactured lithium-ion batteries for electric cars, power tools and utility grid applications, raised more than $1 billion in venture capital, public equity and government funds. In 2012, the company filed for bankruptcy, and its assets were acquired at auction by China-based Wanxiang Group.
It was very clear back in 2008 that there would be in the long term a market for electrified vehicles. The question was, how long would it take to develop? It was also very clear that if left on its own, without some stimulus, it would take quite a long time.
The difficult part is if you get out in front of demand and the industry just doesn't make it. It could be a tremendous success in five years, but if you are caught with a factory at the [wrong] time, that's where the obituary comes in.
What [Tesla] is saying is that they need the capacity. It's unlikely their suppliers are going to take the risk. They are going to have to take it themselves. The risk associated with their growth will be theirs.
Ms. Chernova, a special writer for Dow Jones VentureWire and The Wall Street Journal in New York, can be reached at .
Credit: By Yuliya Chernova
Subject: Manufacturing; Batteries; Automobile industry; Electric vehicles; Manufacturers
Location: United States--US
Company / organization: Name: Cardiff Business School; NAICS: 611410; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: May 18, 2014
Section: Special
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: Ne ws
ProQuest document ID: 1525630336
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1525630336?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Is Tesla's Battery Factory Realistic?: The electric-car company plans to build a giant plant; we asked experts to offer their assessments
Author: Chernova, Yuliya
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]19 May 2014: R.8.
ProQuest document link
Abstract:
Tesla's plan follows a largely failed effort by the Obama administration to create a large battery-manufacturing base in the U.S. Several manufacturers that built battery plants as part of that initiative went into bankruptcy after being caught with too much capacity when projected demand for electric cars failed to materialize. A Roll of the Dice Peter Wells is a professor of business and sustainability with a focus on the global automotive industry at Cardiff Business School's Centre for Automotive Industry Research, in Wales.
Full text: Tesla Motors Inc. plans to build one of the world's largest factories of any kind in the U.S. But it wouldn't build its electric cars there -- it would make the batteries to power them.
The plant, slated for completion by 2020 at a cost of as much as $5 billion, would be able to turn out more lithium-ion batteries than all the battery factories in the world today. Tesla plans to break ground in June, though the site is still uncertain, and expects to start producing batteries at the plant by 2017. It says the scale will help drive the cost of batteries down, in turn helping to make a mass-market, all-electric car possible.
Tesla's plan follows a largely failed effort by the Obama administration to create a large battery-manufacturing base in the U.S. Several manufacturers that built battery plants as part of that initiative went into bankruptcy after being caught with too much capacity when projected demand for electric cars failed to materialize.
Against this backdrop, how realistic is Tesla's plan? We spoke with several experts in the field to get their takes. Below are edited excerpts of their responses.
We Haven't Invented It Yet
K.M. Abraham is a research professor at the Northeastern University Center for Renewable Energy Technology, has worked for 30 years on lithium battery technology, was one of the first to demonstrate rechargeable lithium batteries and invented next-generation lithium air batteries. He also has a battery consulting company called E-KEM Sciences.
I don't see how they can reduce the cost more than 20%. They are dependent on the whole battery community. We are already reaching the limit on the energy density you can get in the lithium-ion battery. Next-generation chemistries, such as lithium air, are another 25 years away from commercialization.
It won't be as simple as it has been so far. We'll need scientific discoveries in the electrode materials. Usually, from invention of battery materials to production it takes 15 to 20 years, and we haven't invented it yet.
As far as scale manufacturing, it's an already perfected business; just doubling the world production wouldn't get that much improvement per unit. The major producers in Korea, Japan, are using massive amounts of material already. And battery manufacturing is a very, very low-margin business at scale.
And [the major producers] are integrated manufacturers, they can put their battery cells into portable consumer devices, and they can make up the price there.
A Roll of the Dice
Peter Wells is a professor of business and sustainability with a focus on the global automotive industry at Cardiff Business School's Centre for Automotive Industry Research, in Wales.
Tesla is taking advantage of the moment to make an enormous roll of the dice.
You rush into these things at your peril. The reason the car industry has been so conservative is that there are major concerns with safety, reliability, customer confidence. That's the reason the industry has been very slow with adopting technologies.
The danger there is if Tesla cannot make this work, the whole electric-vehicle sector will be set back a lot.
But it could change the way we buy cars, we use cars, the revenue streams, the business models. In an industry that has hitherto been riddled by conservatism, this is a disruptive idea.
There's a lot of cost that can be taken out at larger scales of battery manufacturing. But it's all about the capacity utilization. A battery plant that's not running will cost you a fortune.
Better to Go Slow
Bill Reinert was national manager of Toyota Motor Sales U.S.A. Inc.'s advanced-technology group from 1990 to 2013. He co-led the U.S. product-planning team for the second-generation Prius and worked on several advanced hybrid electric products, direct hydrogen fuel-cell vehicles and plug-in hybrid concepts, among others.
We didn't anticipate Prius would sell like it did. There was at least a year or more where we couldn't increase sales because not just the battery but a whole host of other parts couldn't be ramped up quickly enough.
But the worst thing in the world you can do is plan for a high volume and not reach it. Then you've got all these factories that are idle, and all these workers who are idle, and all these parts that you ordered. It's better to slowly add to production when you are making a profit than to shut down lines when you are losing money.
Toyota can take a suspension they use on hundreds of thousands of cars and put it on a low-volume car. Volkswagen is the king of this. Tesla doesn't have that ability. It has to be bespoke, built from the ground up.
If I were in [Tesla Chief Executive Elon] Musk's shoes, I'd be on a jet tomorrow to go to [battery makers] LG Chem, Panasonic, GS Yuasa, and telling them this is our long-term projection. But if [they couldn't commit to meeting my needs], I wouldn't be discussing this grand design, this mythical plant.
What I would start out with would be bare-bones manufacturing and make sure that we are making as many of the product as we need.
Out in Front of Demand
David Vieau served as chief executive of A123 Systems from 2002 to 2012. The company, which manufactured lithium-ion batteries for electric cars, power tools and utility grid applications, raised more than $1 billion in venture capital, public equity and government funds. In 2012, the company filed for bankruptcy, and its assets were acquired at auction by China-based Wanxiang Group.
It was very clear back in 2008 that there would be in the long term a market for electrified vehicles. The question was, how long would it take to develop? It was also very clear that if left on its own, without some stimulus, it would take quite a long time.
The difficult part is if you get out in front of demand and the industry just doesn't make it. It could be a tremendous success in five years, but if you are caught with a factory at the [wrong] time, that's where the obituary comes in.
What [Tesla] is saying is that they need the capacity. It's unlikely their suppliers are going to take the risk. They are going to have to take it themselves. The risk associated with their growth will be theirs.
---
Ms. Chernova, a special writer for Dow Jones VentureWire and The Wall Street Journal in New York, can be reached at yuliya.chernova@wsj.com.
Credit: By Yuliya Chernova
Subject: Manufacturing; Automobile industry; Manufacturers; Facilities planning; Batteries; Electric vehicles
Location: United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 5100: Facilities management; 8640: Chemical industry; 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: R.8
Publication year: 2014
Publication date: May 19, 2014
Section: Energy (A Special Report)
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: Feature
ProQuest document ID: 1525727501
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview /1525727501?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
In a Nordic Power Trip, Bus Drivers In Oslo Mount an Assault on Batteries --- Transit Operators Fume as Incentives Juice Sales of Electric Cars; Tesla Tensions
Author: Jervell, Ellen Emmerentze; Stoll, John D
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]21 May 2014: A.1.
ProQuest document link
Abstract:
The rise of the electric vehicle may be working to chip away at emissions here in oil-rich Norway, but it is creating an unexpected headache for some of the most important people in the nation's big city -- bus drivers. For Tesla, this small Scandinavian nation is the largest market in the world, after the U.S. Other car companies, including Nissan Motor Corp., have for years seen Norway as a key market and Volkswagen AG is now launching an electric version of the popular Golf that is expected to further expand the appetite.
Full text: OSLO -- The rise of the electric vehicle may be working to chip away at emissions here in oil-rich Norway, but it is creating an unexpected headache for some of the most important people in the nation's big city -- bus drivers.
In the capital, Oslo, sales of electric vehicles have ballooned as well-heeled Norwegians take advantage of generous government incentives aimed at juicing sales of cars that run on batteries. Incentives include a number of tax breaks, free car-charging stations in municipal parking lots and exemptions from certain tolls.
But the biggest prize may be the unfettered access electric cars have to bus lanes. Oslo's traffic can be gnarly during rush hour, and people are increasingly turning to the Tesla Model S, Nissan Leaf and Peugeot iOn, vehicles that qualify them to take the faster track without worries about fines.
This is good for the environment, but bad for drivers of buses who are trying to stay on schedule.
"The EVs have to get out of the bus lane," Erik Haugstad said in an interview while driving one of Oslo's red buses on a sunny spring morning. Mr. Haugstad's eyes darted between the road ahead, his rearview mirror and a little screen outlining the day's timetable.
Too often, his bus runs behind. And he knows why.
"I know you're upset because the bus is delayed," Mr. Haugstad said over the intercom. "Again, I'm sorry, but there's not much I can do." He pauses, pointing at all the battery-powered automobiles darting in and out of the lane ahead.
"There are too many electric cars."
Not all the onboard complaints come from professionals on their way to work or parents trying to get their children to school. At one point, an elderly woman confronted the driver because he was several minutes behind and she was in danger of missing her connection. "I'm missing my train now, you know," she scolded.
Under normal circumstances, the bus driver thinks of himself as mild-mannered, and his mood has been cheered by an unseasonably warm spring. He likes to use the onboard microphone greeting passengers as if he is Exhibit A for the many polls and studies that suggest Norway is one of the happiest places on Earth.
As of April, about 27,500 EVs were on the road in this nation of five million and now represent about 10% of vehicle sales. The bulk of those cars are in the greater Oslo region. In March, Tesla's new Model S sedan set a sales record in Norway for most cars sold in a single month.
For Tesla, this small Scandinavian nation is the largest market in the world, after the U.S. Other car companies, including Nissan Motor Corp., have for years seen Norway as a key market and Volkswagen AG is now launching an electric version of the popular Golf that is expected to further expand the appetite.
Norway actually has enjoyed a long love affair with EVs. The "Buddy," a tiny car created in the 1990s that weighs about 900 pounds without the battery, can still be seen plying Oslo streets.
The clutter in the bus lane has tarnished a trend that otherwise has been a point of pride in this oil-rich nation. This turned men like Frederic Hauge, who heads a nongovernmental organization called Bellona known for combating climate change and aggressively advocating EV incentives, into punching bags.
Recently, while driving his Tesla, Mr. Hauge fielded a stream of emailed bus-lane-related complaints from people asking him to intervene. While he understands the debate and believes "buses should continue to have first priority," he insists "not much data has been collected on the issue."
Currently, the city and other organizations are locked in debate over what to do. No decisions have been made, and Mr. Hauge argues that before EVs are excluded from the bus lane, less dramatic approaches should be sought.
Electric-car owners sense a change is coming.
"When something sounds too good to be true, it usually is," Erling Kagge said while driving his Tesla through Oslo the day before Mr. Haugstad criticized drivers like him during his morning route. "On the other hand, as soon as EVs get back into the normal car's lane, that's going to be worse for everyone," Mr. Kagge said.
Even if the special lane closes to him, Mr. Kagge -- a polar explorer and publisher -- hopes that other incentives (such as exemption from Norway's 25% sales tax and punishing emissions-related charges) remain.
In weighing how to proceed, politicians have to make a tough call. Oslo's mayor, Fabian Stang, has bragged that his city is "the capital of electric vehicles," and he sometimes rides through town on an electric bicycle.
"You may call Oslo a pot of traffic and this is a big issue for us," he said at a recent parade in front of the hulking building that houses municipal offices. Ultimately, he said, "we want to avoid pollution" and since people need to drive to work anyway, the city needs to do all it can to get those people into electric vehicles.
If Mr. Kagge, the explorer, is any gauge, the rise of more legitimate electric cars like a lightning-fast Tesla that can go more than 250 miles on a single charge is reducing the need for a variety of perks.
"Let's face it, we don't buy Teslas to be nice," he said. "Once it's this cheap and looks this good, well, of course we want a Tesla."
Credit: By Ellen Emmerentze Jervell and John D. Stoll
Subject: Automobile industry; Automobile sales; Electric vehicles; Buses
Location: Norway
Company / organization: Name: Nissan Motor Co Ltd; NAICS: 336111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2014
Publication date: May 21, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1526110653
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1526110653?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Panasonic Says Tesla Investment Won't Be a Risky Gamble; Investment Decision to be Made 'One Step at a Time'
Author: Inagaki, Kana
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 May 2014: n/a.
ProQuest document link
Abstract: None available.
Full text: TOKYO--Panasonic Corp. executives sought to allay investor concerns about the firm taking part in Tesla Motors Inc.'s $5 billion plant, saying any investment decision will be made one step at a time, in line with market demand.
Earlier this month, the Japanese tech giant said it signed a letter of intent to participate in the construction of what the Silicon Valley electric-car maker calls "gigafactory" for assembling vehicle batteries in the U.S. But Panasonic hasn't disclosed how much it plans to invest in the plant.
During a six-hour investor relations event on Wednesday, analysts questioned company executives on how Panasonic will ensure a return on its investment and whether it has any backup plan if demand for Tesla cars doesn't live up to initial expectations.
With Panasonic already expanding production of batteries at factories based in Japan, one key concern is whether it will face overcapacity if it invests in the U.S. plant.
"We will make sure to carry out investments one step at a time in line with demand," said Yoshio Ito, Panasonic's senior managing executive officer who heads the automotive unit.
"Even if we do invest [in the Tesla plant], one factor would be how we're going to divide up our roles and investments," Mr. Ito said.
Panasonic executives also emphasized its lithium-ion battery business doesn't hinge solely on how many electric vehicles Tesla would sell in the future.
In addition to Tesla, the company has also received interest from other auto makers both in and outside of Japan, while its batteries can also be used for power-storage systems, they said.
"We have no intention of taking on a big adventure all at once," Panasonic Executive Officer Shinji Sakamoto said.
Panasonic aims to double its sales from the automotive business to ¥2 trillion ($20 billion) by the fiscal year ending in March 2019. A third of these sales would come from car batteries and other parts for fuel-efficient vehicles.
The robust performance of its auto and housing businesses helped the company return to profit for the first time in three years for the fiscal year that ended in March 2014.
Tesla Chief Executive Elon Musk earlier said Panasonic would be the only battery company producing cells in the new factory, which will aim to start production in three years. The company has already signed an agreement to provide two billion battery cells to Tesla through 2017.
Credit: Kana Inagaki
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: May 21, 2014
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1526252823
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1526252823?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Panasonic, Pondering Tesla Investment, Unsure on Battery Cost Cut Goals; Electronics maker committed to investing in U.S. plant but amount it will contribute still being debated
Author: Inagaki, Kana
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 May 2014: n/a.
ProQuest document link
Abstract: None available.
Full text: OSAKA, Japan--Panasonic Corp. on Friday said the extent of its role in a proposed battery joint venture with electric car maker Tesla Motors Inc. is still being debated as it expressed uncertainty over the venture's cost-cutting target.
The electronics maker has committed to investing in the U.S. plant, which could cost as much as $5 billion, but the amount it would contribute is still being debated inside the company. Some Panasonic executives are still haunted by earlier failed capital investments in plasma televisions and batteries.
"Is 30% [cost savings] in sight? Not yet. It isn't that easy," said Yoshio Ito, Panasonic's senior managing executive officer who heads the automotive unit, in a round-table discussion with reporters.
Tesla needs to reduce the cost of the existing Model S battery pack by at least 30% to make a proposed car designed to attain 200 miles of all-electric range and start at $35,000 (3.57 million yen).
Mr. Ito said Panasonic has offered to jointly work on electronic controls in addition to battery-cell cost reductions as a means to lower the overall cost of the battery pack, which is a significant portion of the expense of Tesla's current Model S electric car.
Lowering the cost of the existing 1,000-pound battery pack is the primary driver of constructing a 10-million-square-foot factory. Tesla plans to use vertical integration in the giant factory, pulling in partners like Panasonic, as well as makers of component parts, like the metal suppliers for cathode and anode materials, into the plant.
JB Straubel, Tesla's chief technical officer, said he believes the cost reduction effort is on track, based on the company's analysis. Lower costs for battery cells will come from lower logistics cost and cutting out middleman margin expenses, and even tying in base material supplies from mining companies.
"There will be other partners. There are other partners. Panasonic is by far the primary," he said, in an interview with The Wall Street Journal.
Mr. Straubel said Tesla is a few weeks away from breaking ground on the first of two sites for the battery factory, but he isn't concerned that Panasonic hasn't made a firm commitment to the plant.
In order to meet its timeline to start production in 2017, Tesla is starting site work on two different locations to ensure it can complete the project. Tesla is vetting potential sites in Arizona, Nevada, New Mexico, Texas and California.
"There is not any frustration. It is that this whole external world is saying it is taking too long to get a [Panasonic] commitment," Mr. Straubel said. "With the excitement about the Gigafactory, suddenly the whole relationship is pushed into the limelight. It doesn't feel to us that things are taking too long. There is no sense of foot-dragging."
He reiterated that Panasonic will be the lone battery maker working with Tesla. Panasonic helped boost Tesla's cash in 2010 with a $30 million stock purchase when the shares were $21.15. The stock is now trading at $203.
Under Chief Executive Kazuhiro Tsuga, Panasonic officials say they are compiling detailed risk scenarios and multiple backup plans to make sure new investments don't flop and jeopardize the turnaround Mr. Tsuga engineered.
The Japanese technology giant has spent the past two years drastically restructuring its television, mobile phone and semiconductor divisions to stem losses totaling $15 billion. Having brought the company back into profit for the previous fiscal year, Mr. Tsuga has admitted he is eager to resume investments to capture new growth.
One of the main growth drivers for Panasonic will be an expansion of its auto-parts business, which hinges in part on its key client Tesla.
The Japanese firm has already signed a letter of intent with the Silicon Valley electric-car maker to participate in the construction of the "gigafactory," but hasn't disclosed how much it would invest.
"We will make sure to carry out investments one step at a time in line with demand," Mr. Ito said recently.
The caution is warranted. Starting in the early 2000s, Panasonic invested around $5 billion to build production capacity for plasma displays and was saddled with costly investments that went sour after prices slid and a strong yen eroded profitability. After Mr. Tsuga took over as chief executive in 2012, Panasonic pulled out of manufacturing plasma display panels.
In 2008, Panasonic also announced that it would invest around $1 billion to set up a new plant in Japan for lithium ion batteries, but later froze part of the investment as demand plummeted following the global financial crisis.
"Investments are scary considering the bitter experiences we've had," a company official said on condition of anonymity.
Last month, Mr. Tsuga also said the company needs to first recover its credit ratings before it can move onto big investments, although he added that officials internally wanted to resume investments as soon as possible. In 2012, Standard & Poor's Ratings Services cut Panasonic's credit rating by two notches to BBB, the second lowest of the investment grade.
To supply batteries for Tesla's luxury electric cars, Panasonic is already ramping up production at one Japanese plant while resuming operating at an idled plant in western Japan. The company has an agreement to provide 2 billion cells to Tesla through 2017. Analysts have questioned whether an additional plant in the U.S. may lead to overcapacity if Tesla car sales don't grow as strongly as expected in the future.
"Nobody knows how demand will grow in the future, and it is no longer an environment where companies can just say, 'Let's go for it,'" said Renzo Yamamoto, an analyst at research firm Techno Systems Research Co.
While Sony Corp. was first to commercialize lithium ion batteries in the early 1990s, Japanese makers have lost market share to Korean rivals since 2011, hurt by a strong yen and disruptions to supplies following the earthquake that year, according to Techno Systems.
Despite the risks involved, the tightknit partnership with Tesla is critical to Panasonic's plan to double sales in its auto division to ¥2 trillion by the fiscal year ending in March 2019. Nearly a quarter of those sales are expected to come from auto batteries.
In a round table interview Friday, Mr. Ito also said risks in battery investments can be better controlled than flat-panel displays. For example, Tesla and Panasonic exchange information on sales and production levels on a weekly basis and can make adjustments if demand doesn't grow according to initial estimates. If Panasonic buys a stake in the new Tesla plant, Mr. Ito said the investments will be made in phases instead of the huge spendings seen with TV panels.
And while TV panels can basically be made with similar materials by rivals, battery production is unique to each manufacturer. Panasonic's cylindrical lithium ion batteries, for example, are distinct in using more nickel for material and has higher density than other batteries of the same size.
Panasonic and Tesla have set up joint working teams that talk two to three times a week to work out a range of issues from how to control costs to dividing up their investments, Mr. Ito said.
Officials also say the company is compiling risk scenarios with Tesla regarding sales, costs and currency rates. And if Tesla demand doesn't grow as expected, Panasonic also expects sales of their batteries to other auto makers and their potential use in power-storage systems, they added.
For the new U.S. plant, Tesla has said Panasonic would be the only battery cell manufacture involved. But analysts say Korean battery makers will likely try to woo Tesla in the future, while Panasonic is eager to maintain its so-far exclusive relationship.
The two companies have been close partly because a number of employees at Tesla are originally from Panasonic, including its battery technology director Kurt Kelty, who spent more than a decade at Panasonic and speaks Japanese fluently.
"I hired Kurt. Not just because of his connection to Panasonic, but [because] he also knew the Japanese business culture," said Mr. Straubel, Tesla's chief technical officer.
Panasonic officials admit they need to balance their cautious investment stance while keeping up with Tesla's speedy decision-making.
"I'm not sure if we're keeping up with the speed sought by" Tesla, Mr. Ito said.
"But there is no growth without investment," he added, speaking broadly about the company's auto business.
Credit: Kana Inagaki
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: May 23, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1527475700
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1527475700?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Panasonic Stake in Tesla Battery Factory Unclear
Author: Inagaki, Kana; Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 May 2014: B.4.
ProQuest document link
Abstract:
Panasonic Corp. said the extent of its role in a proposed battery joint venture with electric car maker Tesla Motors Inc. is uncertain as it expressed doubt over the venture's ambitious goal of reducing battery-production costs.
Full text: OSAKA, Japan -- Panasonic Corp. said the extent of its role in a proposed battery joint venture with electric car maker Tesla Motors Inc. is uncertain as it expressed doubt over the venture's ambitious goal of reducing battery-production costs.
The electronics maker has committed to investing in the U.S. plant, which could cost as much as $5 billion, but the amount it would contribute still is being debated inside the company. Some Panasonic executives are still haunted by earlier failed capital investments in plasma televisions and batteries.
"Is 30% [cost savings] in sight? Not yet. It isn't that easy," Yoshio Ito, the Panasonic executive in charge of its automotive business, said on Friday.
Palo Alto, Calif.-based Tesla aims to reduce the cost of the existing Model S battery pack by at least 30% to realize a new car that can attain 200 miles of all-electric range and start at $35,000.
Mr. Ito said Panasonic has offered to work together on electronic controls in addition to battery-cell cost reductions as a means to lower the overall cost of the battery pack.
JB Straubel, Tesla's chief technical officer, said the cost reduction effort is on track, based on the company's analysis. Lower costs for battery cells will come from savings in logistics and middleman expenses, and even from buying materials from mining companies.
"There will be other partners. There are other partners. Panasonic is by far the primary," he said, in an interview with The Wall Street Journal.
Mr. Straubel said Tesla is just a few weeks away from breaking ground on the first of two sites for what the company calls its gigafactory. To meet its timeline to start production in 2017, Tesla is starting site work on two different locations to ensure it can complete the project, even though a final site isn't chosen.
"There is not any frustration," Mr. Straubel said. "It doesn't feel to us that things are taking too long. There is no sense of foot-dragging." He reiterated that Panasonic will be the lone battery maker working with Tesla.
Under Chief Executive Kazuhiro Tsuga, Panasonic is compiling detailed risk scenarios and multiple backup plans to make sure new investments don't flop and jeopardize the turnaround Mr. Tsuga engineered.
The Japanese technology giant has spent the past two years drastically restructuring its television, mobile phone and semiconductor divisions to stem losses totaling $15 billion. Having brought the company back into profit for the previous fiscal year, Mr. Tsuga has admitted he is eager to resume investments to capture new growth.
One of Panasonic's goals is the expansion of its auto-parts business, which hinges in part on its key client Tesla.
The Japanese firm has already signed a letter of intent with the Silicon Valley electric-car maker to participate in the construction of the gigafactory but officials have stayed mum on how much they plan to invest.
Panasonic last decade invested around $5 billion in production capacity for plasma displays and was saddled with costly investments that went sour after prices slid and a strong yen eroded profitability. It halted plasma output in 2012.
In 2008, Panasonic announced that it would invest around $1 billion to set up a new plant in Japan for lithium ion batteries, but later froze part of the investment as demand plummeted following the financial crisis.
"Investments are scary considering the bitter experiences we've had," an official said on condition of anonymity.
Credit: By Kana Inagaki and Mike Ramsey
Subject: Automobile industry; Cost control; Cost reduction; Batteries; Production capacity; Joint ventures; Electric vehicles
Location: United States--US Japan
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: Panasonic Corp; NAICS: 333415, 335222, 335224
Classification: 9180: International; 9110: Company specific; 8680: Transportation equipment industry; 5310: Production planning & control
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2014
Publication date: May 24, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And F inance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1528455202
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1528455202?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
S&P Rates Tesla Debt as 'Junk'; Unsolicited B- Rating is Four Rungs Below Investment Grade
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 May 2014: n/a.
ProQuest document link
Abstract:
According to S&P, Tesla has liability for $2.9 billion in convertible bonds.
Full text: Standard & Poor's Ratings Services labeled Tesla Motors Inc. a "vulnerable" investment, giving it a noninvestment-grade corporate debt rating of B-.
The rating, four levels below investment grade, is unsolicited because Palo Alto, Calif.-based Tesla doesn't have a rating agreement with the S&P to rate its debt, but S&P said there was sufficient investor interest to go forward with the rating. According to S&P, Tesla has liability for $2.9 billion in convertible bonds.
"Our 'vulnerable' business risk profile assessment incorporates Tesla's narrow product focus, concentrated production footprint, small scale relative to its larger automotive peers, limited visibility on the long-term demand for its products, and limited track record in handling execution risks that could arise in managing high volume parallel production," the agency said in a statement Tuesday.
The ratings firm estimates that Tesla will burn cash in 2014 and 2015 as large capital expenses connected to building a giant battery factory, Supercharger stations, showrooms and service facilities as well as developing the Model X SUV and another smaller car will use more cash than it will generate through selling new vehicles, said Nishit Madlani, a credit analyst with S&P.
On the positive side, S&P said Tesla's brand recognition and improving operating performance, premium pricing, and growing sales could lead to higher cash generation and a better outlook.
"This is an unsolicited rating from S&P that was developed independently by their analysts without any feedback from Tesla on our growth plans," the company said in an emailed statement.
Credit: Mike Ramsey
Subject: Bond issues
Location: Palo Alto California
Company / organization: Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: May 27, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1528552277
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1528552277?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla's Musk Says He Will Stay as CEO at Least Four to Five More Years; After That, a Reassessment
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 June 2014: n/a.
ProQuest document link
Abstract:
Elon Musk said on Tuesday he plans to remain chief executive of electric-car maker Tesla Motors Inc. for at least another four to five years, and then reassess whether he would continue in the post.
Full text: Elon Musk said on Tuesday he plans to remain chief executive of electric-car maker Tesla Motors Inc. for at least another four to five years, and then reassess whether he would continue in the post.
Mr. Musk, speaking to shareholders at the Palo Alto, Calif., company's annual meeting, said he is committed to staying through the start of high-volume production of Tesla's coming third-generation car, which the company would like to start producing at the end of 2016.
"It is quite difficult to be CEO at two companies," Mr. Musk said, when asked by a shareholder how long he would stay. Mr. Musk also is CEO of Space Exploration Technologies Corp. and the chairman of solar-panel supplier and installer SolarCity Corp. "I will stay four or five years, then it's TBD after that."
Shares in the auto maker were up 24 cents at $204.94 in 4 p.m. trading on Tuesday on the Nasdaq Stock Market.
Dozens of shareholders turned out for the meeting, held at the Computer History Museum in Mountain View, Calif. One shareholder asked for a job as vice chairman, another said he made enough money to buy a Model S by day-trading the stock. The luxury electric vehicles start at about $71,000.
Mr. Musk also said Tesla may start construction on as many as three separate sites for its giant battery factory, after saying earlier that work would begin on two sites. Site work is supposed to start on the first of several sites for the so-called gigafactory this month.
To meet construction deadlines, Tesla plans to start construction at several different locations, despite having not chosen a final spot. Mr. Musk said the final location likely would come at the end of the year. Tesla is scouting sites in California, Nevada, Arizona, New Mexico and Texas.
He also said he was "quite optimistic" that Tesla could achieve a greater than 30% cost reduction compared with today for battery packs through the construction of the gigafactory, and that partner Panasonic Corp. now was in agreement.
"Panasonic at first wasn't sure these cost reductions could be achieved, but I think they are now," he said. Panasonic recently said it hasn't yet decided how much it will invest in the giant battery factory, which would be the world's largest.
When asked about why other auto makers hadn't followed Tesla with longer-range electric cars, he said he was surprised. He also hinted that he was planning a "controversial" announcement dealing with some of Tesla's technology patents.
Looking to the future, Mr. Musk said the company might look at building a truck because of the potential to displace fossil fuel. It is an idea he has mentioned before.
Mr. Musk also related a story about the naming of the company's coming third generation car. Tesla had trademarked the name Model E in part because along with its coming Model X sport utility, the company's models' names could form the word sex. Tesla also considered trademarking "Model Y," he said, which would allow for vehicles using the letters s, e, x and y.
"But Ford called up and threatened to sue us," Mr. Musk said. "It was like, oh my God, Ford is killing sex!"
Credit: Mike Ramsey
Subject: Automobile industry; Construction; Research & development--R & D
Location: California Palo Alto California
Company / organization: Name: SolarCity Corp; NAICS: 238220, 333414; Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Panasonic Corp; NAICS: 335222, 335224, 333415; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Jun 3, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1531717525
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docv iew/1531717525?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Tesla CEO Musk Plans to Run Electric Car Maker Into 2018
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 June 2014: B.3.
ProQuest document link
Abstract:
Elon Musk said on Tuesday he plans to remain chief executive of electric-car maker Tesla Motors Inc. for at least another four to five years, and then reassess whether he would continue in the post.
Full text: Elon Musk said on Tuesday he plans to remain chief executive of electric-car maker Tesla Motors Inc. for at least another four to five years, and then reassess whether he would continue in the post.
Mr. Musk, speaking to shareholders at the Palo Alto, Calif., company's annual meeting, said he is committed to staying through the start of high-volume production of Tesla's coming third-generation car, which the company would like to start producing at the end of 2016.
"It is quite difficult to be CEO at two companies," Mr. Musk said, when asked by a shareholder how long he would stay. Mr. Musk also is CEO of Space Exploration Technologies Corp. "I will stay four or five years, then it's TBD after that."
Shares in the auto maker were up 24 cents at $204.94 in 4 p.m. trading Tuesday on the Nasdaq Stock Market.
Dozens of shareholders turned out for the meeting, held at the Computer History Museum in Mountain View, Calif. One shareholder asked for a job as vice chairman, another said he made enough money to buy a Model S by day-trading the stock. The luxury electric vehicles start at about $71,000.
Mr. Musk also said Tesla may start construction on as many as three separate sites for its giant battery factory, after saying earlier that work would begin on two sites. Site work is supposed to start on the first of several sites for the so-called gigafactory this month.
To meet construction deadlines, Tesla plans to start construction at several different locations, despite having not chosen a final spot. Mr. Musk said the final location likely would come at the end of the year. Tesla is scouting sites in California, Nevada, Arizona, New Mexico and Texas.
He also said he was "quite optimistic" that Tesla could achieve a greater than 30% cost reduction compared with today for battery packs through the construction of the gigafactory, and that partner Panasonic Corp. now was in agreement.
"Panasonic at first wasn't sure these cost reductions could be achieved, but I think they are now," he said. Panasonic recently said it hasn't yet decided how much it will invest in the giant battery factory, which would be the world's largest.
When asked about why other auto makers hadn't followed Tesla with longer-range electric cars, he said he was surprised. He also hinted that he was planning a "controversial" announcement dealing with some of Tesla's technology patents.
Looking to the future, Mr. Musk said the company might look at building a truck because of the potential to displace fossil fuel. It is an idea he has mentioned before.
Mr. Musk also related a story about the naming of the company's coming third generation car. Tesla had trademarked the name Model E in part because along with its coming Model X sport utility, the company's models' names could form the word sex. Tesla also considered trademarking "Model Y" he said, which would allow for vehicles using the letters s, e, x and y.
"But Ford called up and threatened to sue us," Mr. Musk said. "It was like, oh my God, Ford is killing sex!"
Credit: By Mike Ramsey
Subject: Automobile industry; Chief executive officers; Annual meetings; Electric vehicles; Batteries
Location: California
People: Musk, Elon
Company / organization: Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 9190: United States; 2120: Chief executive officers
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2014
Publication date: Jun 4, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1531853326
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1531853326?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Pro-Tesla Bill in Pennsylvania Draws Ire of Other Auto Makers; Bill Would Allow Tesla to Operate Direct-Sales Model, But Disallow Other Car Makers
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 June 2014: n/a.
ProQuest document link
Abstract:
The senator couldn't immediately be reached for comment because he was in a legislative session. [...]the Alliance had been neutral on the battles between dealers and Tesla.
Full text: The trade group that represents most of the big auto makers in the U.S. is for the first time weighing in on the running dispute between Tesla Motors Inc. and franchised auto dealers, urging Pennsylvania lawmakers not to give the Silicon Valley car maker a way to avoid state franchise laws that control retailing operations.
The Alliance of Automobile Manufacturers is opposing legislation, which was introduced Monday, that would allow Tesla to operate its direct-sales model--but disallow other manufacturers from bypassing franchised dealers. The bill was proposed by Republican state Sen. John Rafferty Jr., the chairman of the Transportation Committee. The senator couldn't immediately be reached for comment because he was in a legislative session.
Until now, the Alliance had been neutral on the battles between dealers and Tesla. Tesla isn't a member of the lobbying group, but virtually every other car company with U.S. operations is.
The big auto makers don't have the same gripe as the dealers, as they aren't concerned about Tesla's direct-sales model. They just don't want Tesla to be able to do it if no other company is allowed. Tesla declined to comment on the bill.
"Automakers have not objected to special provisions in various states that allowed Tesla to operate outside the current dealership system because those provisions were very limited," the Alliance said in a statement, referring to bargains struck in Ohio and New York that set a cap of a few dealerships in the state. "This bill is different. The Pennsylvania bill provides a wide open door for a single automaker to escape state franchise laws, even when that automaker is the sales leader in its product segment."
Pennsylvania has one Tesla dealership in King of Prussia and another coming in Devon. The state's laws don't prohibit Tesla from opening dealerships. But the bill proposed would require any company other than a dealership "trading solely in electric vehicles" to have franchised dealers. Right now, the only car company selling only electric vehicles through dealerships is Tesla. The provision to restrict sales only to franchised dealers currently exists in Texas, Arizona and New Jersey.
Tesla and auto dealers have been engaged in a state-by-state battle because Tesla doesn't use franchises to sell its electric cars, which sell for $71,000 and up. Car dealers see the direct-sales method as a threat to their system, where dealers purchase vehicles from car makers and then resell them to consumers.
Credit: Mike Ramsey
Subject: Automobile dealers; Automobile sales; Alliances; Franchises
Location: Pennsylvania United States--US
Company / organization: Name: Alliance of Automobile Manufacturers; NAICS: 813910, 541820; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Jun 9, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1534151651
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1534151651?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Tesla Bill Draws Ire From Other Car Makers
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 June 2014: B.3.
ProQuest document link
Abstract:
The senator couldn't immediately be reached for comment because he was in a legislative session. [...]the Alliance had been neutral on the battles between dealers and Tesla.
Full text: The trade group that represents most of the big auto makers in the U.S. is for the first time weighing in on the running dispute between Tesla Motors Inc. and franchised auto dealers, urging Pennsylvania lawmakers not to give the Silicon Valley car maker a way to avoid state franchise laws that control retailing operations.
The Alliance of Automobile Manufacturers is opposing legislation, which was introduced Monday, that would allow Tesla to operate its direct-sales model -- but disallow other manufacturers from bypassing franchised dealers. The bill was proposed by Republican state Sen. John Rafferty Jr.., the chairman of the Transportation Committee. The senator couldn't immediately be reached for comment because he was in a legislative session.
Until now, the Alliance had been neutral on the battles between dealers and Tesla. Tesla isn't a member of the lobbying group, but virtually every other car company with U.S. operations is.
The big auto makers don't have the same gripe as the dealers, as they aren't concerned about Tesla's direct-sales model. They just don't want Tesla to be able to do it if no other company is allowed. Tesla declined to comment on the bill.
"The Pennsylvania bill provides a wide open door for a single automaker to escape state franchise laws, even when that automaker is the sales leader in its product segment," the Alliance said in a statement.
Pennsylvania has one Tesla dealership in King of Prussia and another coming in Devon. The state's laws don't prohibit Tesla from opening dealerships. But the bill proposed would require any company other than a dealership "trading solely in electric vehicles" to have franchised dealers. Right now, the only car company selling only electric vehicles through dealerships is Tesla.
Credit: By Mike Ramsey
Subject: Automobile dealers; State laws; Direct selling; Automobile sales; Legislation -- Pennsylvania
Location: Pennsylvania
Company / organization: Name: Alliance of Automobile Manufacturers; NAICS: 813910, 541820; Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 4320: Legislation; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2014
Publication date: Jun 10, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1534220796
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1534220796?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Motors Offers Open Licenses to Its Patents; CEO Musk Says Approach Will Expand The Market for Electric Cars
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 June 2014: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. is offering the proprietary technology at the heart of its Model S electric car to any company that wants to build vehicles, and its chief suggested BMW AG already is interested in sharing certain patents.
Full text: Tesla Motors Inc. is offering the proprietary technology at the heart of its Model S electric car to any company that wants to build vehicles, and its chief suggested BMW AG already is interested in sharing certain patents.
Chief Executive Elon Musk said during a conference call on Thursday the offer is intended to help spur wider development of electric vehicles. Mr. Musk said one topic discussed with BMW executives was sharing Tesla's technology for rapidly recharging batteries, part of the company's "supercharger" stations.
The Palo Alto, Calif., maker of $71,000 and up luxury electric cars decided to offer open access to Tesla patents out of frustration that electric vehicles remain less than 1% of new cars and light trucks sold each year.
A BMW spokesman confirmed the meeting. "Both companies are strongly committed to the success of electro-mobility and discussed how to further strengthen the development of electro mobility on an international level," spokesman Kenn Sparks said in an e-mail.
Mr. Musk also hinted at another reason for the offer: achieving greater economies of scale. For example, Tesla's patents for its vehicle Supercharging stations could be shared with other auto makers, which could help Tesla spread costs and more quickly open more stations.
More manufacturers should use small battery cells, as Tesla does, Mr. Musk said. "That would be one thing I would recommend." He has outlined plans to build a large battery factory, which he calls the gigafactory, to produce more battery packs in the U.S.
Tesla has "several hundred" patents related to all areas of its electric vehicles, Mr. Musk said, including batteries and electric control systems. Tesla isn't worried a competitor could use its patents to undercut the company, he said.
"We wouldn't want someone to mimic our car to...trick people into thinking it's our car when it's not," Mr. Musk said. The company expects to continue to file patent applications, but won't enforcing its patents.
"If a company is truly relying on patents it means they aren't innovating, or not innovating fast enough," he said. "But this can be of some modest help to others."
Mr. Musk said he initially received some "wide-eyed looks" from members of his board of directors and other managers. He said open sourcing its technology can help attract top engineers who want to see their inventions spread and not just be bottled up into one company.
"This is actually good for Tesla and the electric vehicle industry. I really do believe that," he said.
Mr. Musk teased Thursday's announcement as a controversial move. But after promoting his decision, he described it on Thursday as "a modest thing." Patents, he said, shouldn't be so important. "You want to be innovating so fast [that] you invalidate your prior patents."
The auto industry has had its share of epic intellectual property fights, including a battle in the industry's earliest years over who held patent rights to the idea of the automobile. During the 1970s, General Motors Co. shared its breakthrough in developing the catalytic converter, which scrubs smog-forming pollutants out of exhaust.
Credit: Mike Ramsey
Subject: Electric vehicles; Automobile industry
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Jun 12, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1535074347
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1535074347?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Tesla Releases Its Patents to Rivals --- Electric-Car Maker Aims to Spur Wider Shift by Offering Free Access To Battery, Control Technologies
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]13 June 2014: B.3.
ProQuest document link
Abstract:
Tesla Motors Inc. is offering the proprietary technology at the heart of its Model S electric car to any company that wants to build vehicles, and its chief suggested BMW AG already is interested in certain patents.
Full text: Tesla Motors Inc. is offering the proprietary technology at the heart of its Model S electric car to any company that wants to build vehicles, and its chief suggested BMW AG already is interested in certain patents.
Chief Executive Elon Musk said during a conference call on Thursday the offer is intended to help spur wider development of electric vehicles. Mr. Musk said one topic discussed with BMW executives was sharing Tesla's technology for rapidly recharging batteries, part of the company's "supercharger" stations.
The Palo Alto, Calif., maker of $71,000 and up luxury electric cars decided to offer open access to Tesla patents out of frustration that electric vehicles remain less than 1% of new cars and light trucks sold each year.
A BMW spokesman confirmed the meeting. "Both companies are strongly committed to the success of electro-mobility and discussed how to further strengthen the development of electro mobility on an international level," spokesman Kenn Sparks said in an e-mail.
Mr. Musk also hinted at another reason for the offer: achieving greater economies of scale. For example, Tesla's patents for its vehicle Supercharging stations could be shared with other auto makers, which could help Tesla spread costs and more quickly open more stations.
More manufacturers should use small battery cells, as Tesla does, Mr. Musk said. "That would be one thing I would recommend." He has outlined plans to build a large battery factory, which he calls the gigafactory, to produce more battery packs in the U.S.
Tesla has "several hundred" patents related to all areas of its electric vehicles, Mr. Musk said, including batteries and electric control systems. Tesla isn't worried a competitor could use its patents to undercut the company, he said.
"We wouldn't want someone to mimic our car to . . . trick people into thinking it's our car when it's not," Mr. Musk said. The company expects to continue to file patent applications, but won't enforcing its patents.
"If a company is truly relying on patents it means they aren't innovating, or not innovating fast enough," he said. "But this can be of some modest help to others."
Mr. Musk said he initially received some "wide-eyed looks" from members of his board of directors and other managers. He said open sourcing its technology can help attract top engineers who want to see their inventions spread and not just be bottled up into one company.
"This is actually good for Tesla and the electric vehicle industry. I really do believe that," he said.
Mr. Musk teased Thursday's announcement as a controversial move. But after promoting his decision, he described it on Thursday as "a modest thing." Patents, he said, shouldn't be so important. "You want to be innovating so fast [that] you invalidate your prior patents."
The auto industry has had its share of epic intellectual property fights, including a battle in the industry's earliest years over who held patent rights to the idea of the automobile. During the 1970s, General Motors Co. shared its breakthrough in developing the catalytic converter, which scrubs smog-forming pollutants out of exhaust.
(See related letter: "Letters to the Editor: Patents Are Fair and Protect Innovators" -- WSJ June 26, 2014)
Credit: By Mike Ramsey
Subject: Electric vehicles; Automobile industry; Patents
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 7500: Product planning & development; 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2014
Publication date: Jun 13, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1535173765
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1535173765?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Needs More Mothers of Invention; A Move to Share Tesla's Technology Is a Savvy Play at Boosting the Sector
Author: Lahart, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 June 2014: n/a.
ProQuest document link
Abstract:
Tesla may be worth $25 billion in the stock market, but over in the real world, it is still just a tiny car maker operating in a segment so small it barely qualifies as niche.
Full text: Tesla Motors is synonymous with sleek, highly priced technology. But in opening access to its patents this week, it has realized it needs to be more of a Microsoft than an Apple.
Tesla may be worth $25 billion in the stock market, but over in the real world, it is still just a tiny car maker operating in a segment so small it barely qualifies as niche. While it is growing fast, the company delivered in the first quarter 6,457 cars--all of 0.03% of the global light-vehicle market.
The electric-car market remains so small that Tesla's pricey vehicles account for a large portion of it. Indeed, established auto makers' enthusiasm for electric vehicles, never high, has waned relative to stepped-up efforts to build more efficient versions of vehicles burning gasoline.
One aim of Tesla's patent plan is to alter that equation. Through it, established car companies might not have to sink as much into research and development to produce electric vehicles. And having a common technology platform could accelerate innovation and reduce production costs for everyone.
Rather than hurt Tesla, this could help it. If established players were selling cheaper, mass-market electric cars, more drivers might eventually upgrade to a pricier, higher-performance Tesla. A larger electric-car market would also bring beneficial network effects for Tesla--most importantly, the establishment of more charging stations--that would broaden its vehicles' appeal.
As Apple found to its cost in its earlier incarnation in the 1980s, occupying a rarified position in technology wins plaudits from fans--but can mean ceding the market to a rival like Microsoft that has a more mass-market approach. By opening its patents, Tesla appears to be embracing the latter model more forcefully.
This supposes that car companies will take Tesla up on its offer. At a time when they are pushing to reduce car weights, improve fuel-injection systems and implement software and other technologies aimed at increasing efficiency, they may not. After all, if they can offer gasoline-powered vehicles that cost customers only pennies per mile to drive, the extra upfront cost and range limitations of electric vehicles become harder for many customers to justify.
Tactically, Tesla's move makes sense. Competition in electric vehicles is hardly hot, so those patents weren't really protecting Tesla from anything. The hoped-for sales growth underpinning its lofty market valuation won't happen without a large and varied market for electric cars from multiple manufacturers. Investors who focus on the boldness of Tesla's move risk missing the insidious competitive context that spurred it.
Credit: Justin Lahart
Subject: Electric vehicles; Research & development--R & D; Automobile industry
Company / organization: Name: Microsoft Corp; NAICS: 511210, 334614; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Jun 13, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1535285464
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1535285464?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
1Open-Source: Tesla Motors Chief Executive Elon Musk is frustrated that fewer...
Author: Anonymous
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 June 2014: WSJ.1.
ProQuest document link
Abstract:
Consumer groups have encouraged Pom to press its case, hoping it will make the food-and-beverage industry more careful about claims on product labels. 3Stricter Rules: The Federal Reserve will limit banks' ability to distribute dividends or buy back shares if they don't meet their stated goals for bolstering capital.
Full text: 1Open-Source: Tesla Motors Chief Executive Elon Musk is frustrated that fewer than 1% of vehicles sold run on batteries only, so he's offering open access to his company's patents in hopes that rival car makers will follow his lead.
2Juiced: The Supreme Court allowed juice maker Pom Wonderful to proceed with a false-advertising suit against rival Coca-Cola. Consumer groups have encouraged Pom to press its case, hoping it will make the food-and-beverage industry more careful about claims on product labels.
3Stricter Rules: The Federal Reserve will limit banks' ability to distribute dividends or buy back shares if they don't meet their stated goals for bolstering capital. The Fed said some banks have failed to follow through on planned capital increases.
4Table for Two: Entering a new field, Priceline Group agreed to buy restaurant-booking service OpenTable for $2.6 billion in cash.
5Game On: The NCAA agreed to pay $20 million to settle a suit over the use of college players' likenesses in videogames made by Electronic Arts. The settlement is historic in that the NCAA will pay college players for on-field performance. The NCAA maintains it can bar college athletes from earning money from their play while in school.
6Chance of Cloud: Google is buying satellite firm Skybox for $500 million, its latest move to provide aerial data.
Subject: Athletes
People: Musk, Elon
Company / organization: Name: Google Inc; NAICS: 519130; Name: National Collegiate Athletic Association--NCAA; NAICS: 813990; Name: Electronic Arts; NAICS: 511210; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Source details: Sunday Edition
Pages: WSJ.1
Publication year: 2014
Publication date: Jun 15, 2014
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1535414503
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1535414503?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
New Jersey Assembly Passes Bill Allowing Tesla Sales; Legislation Still Needs Approval by Senate and Governor
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 June 2014: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. may soon be able to sell vehicles through its company-owned stores in New Jersey after the state's General Assembly passed a bill to allow up to four stores for the auto maker.
Full text: Tesla Motors Inc. may soon be able to sell vehicles through its company-owned stores in New Jersey after the state's General Assembly passed a bill to allow up to four stores for the auto maker.
The electric car maker was forced to turn its two New Jersey stores into galleries in April--where a car can be shown to customers but no other selling activity is allowed. That happened when the Motor Vehicle Commissionrevoked its dealer license. State law currently requires that retailers be independent from the manufacturer. The bill now must be passed by the state Senate and signed by Gov. Chris Christie.
"As an electric car driver, I'm honored to be part of this effort to find solutions to keep a state-of-the-art product and the future of the auto manufacturing industry right here in New Jersey," said Rep. Tim Eustace (D-Bergen/Passaic) in a statement. "This legislation will incentivize entrepreneurship, create jobs, promote environmental protection and address the important concerns of consumers in our state."
Tesla has galleries in Paramus and Short Hills and a repair facility in Springfield Township.
"Tesla is pleased that the New Jersey State Assembly has sent an overwhelming message of support for consumer freedom of choice and passed a bill that would once again allow the company to sell cars directly to consumers in the state," Tesla said in a statement. "We look forward to working with state Senators to pass the bill through their chamber and send it to the Governor for his signature."
Pennsylvania legislators have also proposed a bill to allow Tesla an unlimited number of stores, but exclude other manufacturers from selling direct to consumers. That legislation hasn't come to a vote.
Credit: Mike Ramsey
Subject: Automobile industry; Bills
Location: New Jersey
People: Christie, Christopher J
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Jun 17, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1536219094
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1536219094?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Toyota Moves Up Fuel-Cell Car Debut --- Auto Maker Cuts Starting Price of Its Hydrogen-Powered Vehicle to Match Tesla
Author: Pfanner, Eric
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]26 June 2014: B.6.
ProQuest document link
Abstract:
At $70,000, the FCV would cost significantly more than some battery-powered electric cars or hybrid electric-gasoline fueled vehicles, though it would start at about the $71,000 price of an entry-level battery-powered Tesla Model S. On Tuesday, the government of Prime Minister Shinzo Abe announced plans to promote fuel-cell technology as part of its strategy for economic growth, saying it would provide subsidies for the sale of the cars and for the development of hydrogen fueling stations.
Full text: TOKYO -- Toyota Motor Corp. on Wednesday accelerated plans to introduce its first hydrogen-powered car, saying it now would begin selling a sedan in less than a year at a price of about $70,000.
Toyota had previously said it would roll out the car "around 2015" at a price of up to $100,000. On Wednesday, the auto maker said it would begin sales in Japan by March 2015 as the Japanese government seeks to boost the economy through the development of hydrogen fuel-cell technology.
While a number of auto makers are developing fuel-cell cars, Toyota has been one of the foremost champions of the technology as a way to reduce harmful greenhouse-gas emissions. Unlike battery-powered electric vehicles, which can require a lengthy recharge, fuel-cell cars can be refueled in minutes -- assuming drivers can find one of the handful of hydrogen stations that are currently in operation.
Honda Motor Co. plans to begin selling a fuel-cell car next year. Hyundai Motor Co. this month began limited sales of a hydrogen-powered sport-utility vehicle in California.
Toyota admits significant hurdles need to be cleared before fuel-cell vehicles become a viable option for the mass-market.
For now, there are only a handful of refueling stations, in places like Japan and California. But Toyota hopes that by making a strong statement of support for the fledgling technology it can help stimulate development.
Toyota and rival makers of gasoline-powered vehicles also are under pressure to meet regulatory demands in California and other markets to sell zero-emission cars, and their battery-electric cars have had minimal sales. Fuel-cell vehicles will help Toyota earn credits under California and U.S. regulations that will allow the company to sell fuel-hungry sport-utility vehicles and large cars without penalties.
"We want to demonstrate how serious we are," said Mitsuhisa Kato, a Toyota executive vice president, at a news conference here on Wednesday.
The company showed what it described as the finished exterior design on Wednesday. The bright blue car sported two large front grilles, which let in air that reacts with the hydrogen in the fuel cell to produce water and energy to power the car.
At $70,000, the FCV would cost significantly more than some battery-powered electric cars or hybrid electric-gasoline fueled vehicles, though it would start at about the $71,000 price of an entry-level battery-powered Tesla Model S.
On Tuesday, the government of Prime Minister Shinzo Abe announced plans to promote fuel-cell technology as part of its strategy for economic growth, saying it would provide subsidies for the sale of the cars and for the development of hydrogen fueling stations.
The government hasn't announced the size of the subsidies, and Mr. Kato said he doesn't know yet either. Japan currently provides about $300 million a year in subsidies for vehicles powered by alternative fuels, which can shave around $10,000 off the price of a $30,000 electric vehicle.
Such subsidies can shift pricing "from an extremely expensive vehicle to one that somewhat resembles a mass-production vehicle," said Kurt Sanger, an analyst at Deutsche Bank. "But even at that price range, the user of a new engine technology with limited refueling infrastructure is not your next-door neighbor."
To try to speed up the introduction of fuel-cell cars, the Japanese government has pledged about $70 million in subsidies for the installation of 100 hydrogen refueling stations across Japan by the end of next year. California has a similar subsidy program to build the stations.
Without easier access to hydrogen, consumers are unlikely to buy such vehicles, officials acknowledge. But knowing that the cars are coming could create support for building the refueling stations, they add.
"It's not a question of the chicken or the egg first," said Chihiro Tobe, director of the hydrogen and fuel-cell promotion office of the Ministry of Economy, Trade and Industry. "They both have to move in tandem."
Credit: By Eric Pfanner
Subject: Automobile sales; Automobile industry; Fuel cell vehicles; Product introduction; Electric vehicles
Location: Japan
Company / organization: Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110
Classification: 8680: Transportation equipment industry; 9179: Asia & the Pacific
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.6
Publication year: 2014
Publication date: Jun 26, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1540043698
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1540043698?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Pennsylvania House Passes Bill Capping Number of Tesla Retail Stores at Five; The Compromise Legislation Allows Tesla to Avoid a Battle With Dealer Groups
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 July 2014: n/a.
ProQuest document link
Abstract:
The Pennsylvania House of Representatives passed legislation to cap at five the number of Tesla Motors Inc. retail stores in the state, a compromise that allowed the electric car seller to avoid a battle with dealer groups.
Full text: The Pennsylvania House of Representatives passed legislation to cap at five the number of Tesla Motors Inc. retail stores in the state, a compromise that allowed the electric car seller to avoid a battle with dealer groups.
The state Senate passed the legislation last week, and the bill is expected to be signed into law by the governor. Ohio and New York adopted similar legislation, and a similar bill is pending in New Jersey.
Dealers don't like Tesla's manufacturer-owned stores and fear other auto companies may try to avoid using independent dealers to sell vehicles. They have been trying to get legislation passed in various states to halt Tesla's distribution model. Prohibitions have failed, and the dealers began reaching compromises where they would allow a small number of Tesla stores but not other manufacturers.
"We'd like to thank the Pennsylvania Automotive Association for working with us to get this legislation passed by a vote count of 197-2," Tesla said in a statement. "We hope the process in Pennsylvania serves as an example for how productive cooperation can lead to a win for all parties involved, dealers and legislators included."
Credit: By Mike Ramsey
Subject: Legislation; Automobile dealers; Bills
Location: Ohio Pennsylvania New Jersey New York
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: House of Representatives-Pennsylvania; NAICS: 921120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Jul 2, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1542133139
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1542133139?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Shares Down After Stolen Vehicle Crash in California; Seven Injuries but No Deaths Reported; Lithium-Ion Batteries Burn After Impact
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 July 2014: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Motors Inc.'s shares declined 2.9% to $222.66 on Monday following the violent crash Friday of a Model S that burst into flames after it hit a pole in Southern California.
Tesla is awaiting a police report and access to the remains of the vehicle.
There were seven injuries but no deaths reported after a man stole a vehicle from a Tesla store in Los Angeles and led police on a wild chase through the city, hitting speeds of 100 mph, before crashing into several cars and then a pole in West Hollywood, according to a report on television station KTLA-TV. A report from the Los Angeles County Sheriff's Department, which is investigating the crash, wasn't immediately available. A Los Angeles Police Department spokeswoman said the car was stolen around midnight, and police officers pursued the car but were involved in a crash during the pursuit.
Following the crash, the lithium-ion batteries from the car--spread around in clumps on the street--began to burn, some popping like fireworks and shooting into the air. Bystanders recorded the wreckage and burning batteries in mobile phone video shown by the television station.
The Model S split in half, with the front landing on another car and the back wedging between two walls at a synagogue.
This is the second report of a Tesla being crashed at high-speeds and burning after impact. The other was in Mexico. In both cases, the drivers weren't killed. The driver of the stolen Model S was thrown from the vehicle and was in critical condition, according to the television report.
Tesla CEO Elon Musk has said he is proud that there has been no fatal injuries in any accidents with Model S vehicles. Still, of the roughly 30,000 vehicles sold globally, at least four have ended up burning following a collision. Two other Model S vehicles burned after hitting road debris, which led Tesla to install shielding to the underbody.
Car fires are relatively common in the U.S. A study by the U.S. Fire Administration said there were about 65,000 car fires a year from 2008-2010, leading to 300 deaths. Collisions were attributed as a factor in 4% of these fires, or roughly 2,600 fires a year out of the U.S. vehicle fleet of about 250 million. Most vehicle fires occur from electrical wiring, engine or tire malfunctions.
Credit: By Mike Ramsey
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Jul 7, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1543335187
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1543335187?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Motor City West Revs Up Demand for Space; Tesla Motors Has Driven Much of the Growth in the Bay Area
Author: Taves, Max
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 July 2014: n/a.
ProQuest document link
Abstract:
BMW AG, Nissan-Renault, Ford Motor Co. and Toyota have opened large technology-centered research-and-development offices there since 2012, adding to a cluster of R&D facilities occupied by General Motors Co., Honda Motor Co. and Volkswagen AG, among others. [...]the luxury auto maker also is working with Google to integrate Glass, its wearable head technology, with its in-car navigation systems.
Full text: Demand for industrial and office space in parts of Northern California has been on the rise, due mainly to the rapid growth of the technology sector. Now another business group is jockeying for space: the automotive industry.
The production of Tesla Motors Inc.'s electric battery-powered luxury cars has driven much of the automotive-industry growth in the East Bay, not just from Tesla but also from suppliers that have followed the company to the region. In May, Futuris Automotive Inc., a Tesla supplier, made a deal with Prologis for 160,000 square feet of mostly industrial space in Newark, an East Bay city adjacent to Fremont. And in June, another supplier, Toyota Tsusho America Inc., or TAI, signed a five-year-lease for 64,000 square feet in Fremont near Tesla's factory.
But while the growth of auto manufacturing has been mostly confined to Tesla and its supply chain, the growth of auto research and design investment in Silicon Valley has been spread widely throughout the industry. BMW AG, Nissan-Renault, Ford Motor Co. and Toyota have opened large technology-centered research-and-development offices there since 2012, adding to a cluster of R&D facilities occupied by General Motors Co., Honda Motor Co. and Volkswagen AG, among others.
"The future of the car is in Silicon Valley," said Tracey Grose, vice president of the Bay Area Council Economic Institute. "We're getting this entirely new ecosystem around automotive parts."
For real-estate investors, the trend means opportunity. "I think the continued growth in the automotive industry will result in positive net absorption [of space] in Silicon Valley and the East Bay," said Greg Matter, a senior vice president at broker JLL. "We're starting to see speculative developments on the way."
Citing factors including the growth of automotive-focused manufacturing and demands from e-commerce companies for warehouse space, Mr. Matter says he is seeing investors building industrial projects in parts of the region like the East Bay where construction had ground to a halt during the economic downturn.
The vacancy rate at warehouses, distribution centers and factories greater than 50,000 square feet was 9.8% in the second quarter, down from 13.5% at its peak in 2010, according to broker JLL. Asking rents now surpass their prerecession highs in the East Bay. Rents have risen more slowly but are up 9% in the 12 months through March in the Central Valley, where Tesla recently acquired 431,000 square feet of manufacturing space and International Auto Logistics acquired a 500,000-square-foot former Heinz factory, that area's largest new lease.
Auto companies' investments in R&D in the Valley has waxed and waned with the tech industry's cycles of boom and bust since the mid-1990s, according to Sven Beiker, executive director of Stanford University's Center for Automotive Research.
Tech companies' investment in cars has grown considerably. With CarPlay, Apple has integrated the iPhone and its voice-recognition system, Siri, into the dashboard computers of five companies' 2014 models and plans to include them in future models of many other car makers. Meanwhile, Google wants to replace drivers with robots.
Among those cars with the Apple system already in place is Mercedes-Benz. Last November, the Daimler AG subsidiary opened a 71,715-square-foot R&D center in Sunnyvale within blocks of Apple offices. And the luxury auto maker also is working with Google to integrate Glass, its wearable head technology, with its in-car navigation systems.
But because of high labor costs and the persistence of gas and diesel-powered engines, Mr. Beiker doesn't expect Northern California to ever replace Detroit or Yokohama as either centers for manufacturing or even traditional R&D.
"I don't see crash-testing coming here," Mr. Beiker says. "I don't see chassis-testing here. But everything else is up for grabs. If that's entertainment systems, online systems or self-driving systems--[for] everything that really drives innovation in cars today, Silicon Valley might be the powerhouse."
Credit: By Max Taves
Subject: Manufacturing; Research & development--R & D; Automobile industry; Factories
Location: East Bay California Northern California
Company / organization: Name: Google Inc; NAICS: 519130; Name: Toyota Tsusho America Inc; NAICS: 423510; Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Daimler AG; NAICS: 336111; Name: Honda Motor Co Ltd; NAICS: 336111, 336991, 336390; Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Jul 8, 2014
Section: Real Estate
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1543516230
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1543516230?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Looking at California as Site for Battery Factory; State Lawmakers Propose Tax Breaks, Regulation Changes That May Speed Construction, Lower Costs
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 July 2014: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. is taking a closer look at California to build a giant electric-car battery factory after state lawmakers proposed new tax breaks and regulatory changes that could speed its construction and lower costs. On Thursday, Gov. Jerry Brown signed a bill authorizing a $420 million tax credit for Lockheed Martin Corp. that included language also allowing local governments to offer property tax breaks to battery manufacturers, essentially creating a pathway for Tesla's gigafactory.
Full text: Tesla Motors Inc. is taking a closer look at California to build a giant electric-car battery factory after state lawmakers proposed new tax breaks and regulatory changes that could speed its construction and lower costs.
California is already the auto maker's corporate headquarters and where it builds its $71,000 and up electric cars. But the company in February had omitted the state from a list of potential sites for a new plant, which would build advanced batteries for its electric vehicles.
Winning the Tesla battery factory would come at a critical time for California. In April, Toyota Motor Corp. decided to move its headquarters to Plano, Texas, after spending decades in suburban Los Angeles.
Tesla's proposed 10-million-square-foot plant could employ up to 6,500 people when finished and cost up to $5 billion. Landing that whale would help reverse the perception that California isn't a competitive market for manufacturers.
"California has set into play various legislative proposals and actions that have enabled it to come back into consideration," a Tesla spokesman said. "Discussions have taken place between us and various representatives of the state and the overtures they are making and conditions they are proposing place them in a better position for consideration."
The state last week authorized local property tax breaks for battery plants. On Thursday, Gov. Jerry Brown signed a bill authorizing a $420 million tax credit for Lockheed Martin Corp. that included language also allowing local governments to offer property tax breaks to battery manufacturers, essentially creating a pathway for Tesla's gigafactory.
Separately, State Senators Ted Gaines, R-Roseville, and Darrell Steinberg, D-Sacramento, proposed a bill with placeholder language that refers to an economic development project involving a battery factory. The legislators are working the state's economic development department and Tesla to come up with a list of requirements to try to get the bill through the legislature when the session restarts in August.
Tesla initially named Arizona, Nevada, New Mexico and Texas as the states under consideration. But site selection has been ongoing for six months, allowing California to nudge in.
"I will do everything in my power to have California land this factory," Sen. Gaines said. "It's very important for California and sends a message across the country that we are open for business."
Tesla now employs 6,000 people in the state, spread among its Palo Alto headquarters, Fremont assembly plant and other retail and small manufacturing sites.
The company has said it would begin construction at more than one locations before picking a final spot. At its annual meeting, Chief Executive Officer Elon Musk said that the company may wait until the end of the year for a final decision.
It is important that the company start soon in order to complete the factory by 2017, when it plans to roll out its third vehicle, an electric car called the Model III that it aims to start selling at $35,000 with a 200-mile range.
The range would be about double what existing EVs at that price can achieve and most of that improvement is based on the cost savings coming from building the gigafactory.
Tesla has said it needs between 500 and 1,000 acres for its battery factory. Some of that land would be used for solar and wind-powered electricity generation. Tesla now owns 300 acres adjacent to the Fremont assembly plant. Some politicians have suggested using a portion of Mather Field, a former Air Force base in Rancho Cordova near Sacramento.
New Mexico's Cabinet Secretary for Economic Development, Jon Barela, said recently the state is still in the running. There have been media reports in Dallas that Tesla has scouted a site in Dallas County. There have been similar reports out of San Antonio.
Tesla hasn't gotten a firm financial commitment from battery supplier Panasonic Corp. to invest in what it calls its gigafactory. The Japanese battery maker signed a memorandum of understanding on investing in the new plant, but hasn't publicly committed to the scope. Tesla has said it would spend $2 billion and expect that the remaining $2 billion to $3 billion needed for the plant would come from partners like Panasonic and materials suppliers.
John Boyd, the principal of The Boyd Company, a New Jersey-based site selection firm, who has followed the Tesla battery factory site selection closely, expects that Reno, Nev., is the front-runner for the plant, but that a site in Texas may be retained for future projects. Nevada has a favorable tax system and proximity to Tesla's Freemont, Calif., plant as well as lithium deposits, which are a component of its batteries.
Tesla needs the plant to make a mass-market vehicle that it now calls its Model III. Its second vehicle, the all-wheel-drive Model X, a sport utility with falcon-wing doors, is out to be released in early 2015.
Tesla originally had planned to call the vehicle the Model E, but Musk said Ford Motor Co. sued to halt Tesla's use of the name, claiming it had rights to the moniker that harked back to Henry Ford's days of naming cars with a single letter.
The naming of the vehicle was first reported by Auto Express, a British automotive magazine.
Credit: By Mike Ramsey
Subject: Factories; Automobile industry; Economic development; Manufacturing; Cost control; Electricity generation; Manufacturers; Tax cuts
Location: California Texas
People: Steinberg, Darrell
Company / organization: Name: Lockheed Martin Corp; NAICS: 336411, 336413, 336414, 212319, 334290; Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Jul 16, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1545292721
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1545292721?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is proh ibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla's Expansion in China Gets a Local Assist; Electric-Car Enthusiast Built His Own Charging Network Between Beijing and Guangzhou
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 July 2014: n/a.
ProQuest document link
Abstract:
China's government wants 500,000 gasoline-electric hybrid and all-electric vehicles on its roads by next year and five million by 2020 as part of its effort to improve air quality and reduce oil dependence. Earlier this year, a joint venture between China's BYD Co. and Germany's Daimler AG that makes the Denza electric car agreed to tap Switzerland's ABB Ltd. to supply home chargers in the China market.
Full text: SHANGHAI--Zong Yi, a Chinese businessman with asthma and worries about his country's pollution problems, happily took delivery of his new electric Tesla Model S sedan in May.
His problem: How to get it home.
Mr. Zong lives in the southern Chinese boomtown of Guangzhou, where he founded a business that makes energy-efficient equipment like water heaters for swimming pools. In April, Tesla Motors Inc. delivered its first cars to customers in China in Beijing, about 1,300 miles to the north. Tesla doesn't operate enough charging facilities between the cities to allow him to drive his car home.
Undaunted, Mr. Zong decided to build his own charging network. With the help of partners found online, he bought 20 charging pillars from Tesla for 5,000 yuan (about $800) each and put them in 16 cities along the way.
"I thought it would be cool if I could build China's first electric-car-charging road," said Mr. Zong, who completed the installations last month. A Tesla spokeswoman said the company is aware of, and approves of, Mr. Zong's ambitions.
Mr. Zong's do-it-yourself approach illustrates a major challenge faced by Tesla and other electric-car makers targeting China.
China's government wants 500,000 gasoline-electric hybrid and all-electric vehicles on its roads by next year and five million by 2020 as part of its effort to improve air quality and reduce oil dependence. But only about 17,600 such vehicles were purchased in China last year, according to the China Association of Automobile Manufacturers, including 14,604 electric vehicles. About 18 million passenger cars were sold in the country last year.
Lack of infrastructure is one major reason. China had hoped to have 400,000 charging pillars for electric vehicles in place by next year, but work is behind schedule. State Grid Corp. of China, China's largest power generator by sales, had finished completion of 400 charging stations as of the end of 2013, according to data from the company.
Cost is another issue, said Bill Russo, president of automotive consulting firm Synergistics Ltd., who says many electric cars in China are unaffordable there. In China, Tesla sells its Model S for $121,000. "People who buy Teslas are just showing off," he said.
Tesla has worked hard to keep its rollout smooth. As of Wednesday it had 72 charging stations in 17 different cities, according to spokeswoman Peggy Yang. The company is working with property developers to install chargers for residents.
Still, the lack of infrastructure has caused hitches. In April Tesla said it would delay deliveries to some customers because it worried that they didn't have access to charging stations or to technical support. The frustration led one customer to publicly smash his Tesla's windshield when it was delivered. A video of the incident circulated online.Chief Executive Elon Musk has apologized to customers and said Tesla is working to provide services in more areas.
Others are rolling out charging stations and other support facilities including BMW AG, which plans to set up 50 charging stations in Shanghai with local partners as part of a broader future rollout. Earlier this year, a joint venture between China's BYD Co. and Germany's Daimler AG that makes the Denza electric car agreed to tap Switzerland's ABB Ltd. to supply home chargers in the China market.
Mr. Zong, 44 years old, is a car aficionado who attributes his environmental consciousness partly to concern for his own health. "When I travel abroad, my asthma subsides. But when I return to China, the coughing and sneezing return," he said.
But he's also eager to build his green credentials to boost his business. "My company produces environmentally friendly products. Activities such as donating chargers will help" its image. In addition to Tesla, he also owns a Qin, a plug-in hybrid made by BYD Co.
To start his network, he posted notices on popular social-networking services seeking partners. "I hope to tell people that it might take a much shorter time to build a charging network across China as long as there are more and more participants," said Mr. Zong.
To make the charging pillars accessible to more consumers, Mr. Zong didn't choose a direct route between Beijing and Guangzhou. He stretched the journey out to nearly 5,750 kilometers, or about 3,600 miles (from Beijing to Guangzhou), and modified the charging facilities to accommodate other electric cars such as those built by BYD. His trip ran from May 28 to June 18.
The charging posts are scattered every 300 kilometers, and more than half of them are placed at or close to four-star hotels. "These hotels have spacious parking lots, sufficient electricity power and can offer 24/7 services. That's attractive to electric car drivers," said Mr. Zong. Tesla now lists some of the sites on its website.
The business is attractive to hotel operators because drivers need meals and places to rest, he said, adding a full charge for a Tesla Model S at one of the stations takes seven to eight hours.
In addition to building the charging spots, Mr. Zong also ordered another 20 Tesla Model S vehicles as an incentive for his senior management. "If I give them one million yuan, some might take the money and buy cars with great horsepower. That's not in line with the environmentally friendly image I'm building for my company," he said.
Rose Yu and Colum Murphy
Subject: Electric vehicles; Automobile industry; Asthma
Location: China Beijing China
Company / organization: Name: China Association of Automobile Manufacturers; NAICS: 813910; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Jul 16, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1545314190
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1545314190?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: California Jostles to Win a Tesla Factory
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 July 2014: B.3.
ProQuest document link
Abstract:
Tesla Motors Inc. is taking a closer look at California to build a giant electric-car battery factory after state lawmakers proposed new tax breaks and regulatory changes that could speed its construction and lower costs.
Full text: Tesla Motors Inc. is taking a closer look at California to build a giant electric-car battery factory after state lawmakers proposed new tax breaks and regulatory changes that could speed its construction and lower costs.
California is already the auto maker's corporate headquarters and where it builds its $71,000 and up electric cars.
Winning the Tesla battery factory would come at a critical time for California. In April, Toyota Motor Corp. decided to move its headquarters to Plano, Texas, after spending decades in suburban Los Angeles.
Tesla's proposed 10-million-square-foot plant could employ up to 6,500 people when finished and cost up to $5 billion.
"California has set into play various legislative proposals and actions that have enabled it to come back into consideration," a Tesla spokesman said. "Discussions have taken place between us and various representatives of the state and the overtures they are making and conditions they are proposing place them in a better position."
The state last week authorized local property tax breaks for battery plants.
Separately, State Senators Ted Gaines, R-Roseville, and Darrell Steinberg, D-Sacramento, proposed a bill with placeholder language that refers to an economic development project involving a battery factory.
Tesla initially named Arizona, Nevada, New Mexico and Texas as the states under consideration. But site selection has been ongoing for six months, allowing California to nudge in.
"I will do everything in my power to have California land this factory," Sen. Gaines said.
The company has said it would begin construction at more than one locations before picking a final spot.
New Mexico's Cabinet Secretary for Economic Development, Jon Barela, said recently the state is still in the running.
Tesla hasn't gotten a firm financial commitment from battery supplier Panasonic Corp. to invest in what it calls its gigafactory. The Japanese battery maker signed a memorandum of understanding on investing in the new plant, but hasn't publicly committed to the scope.
John Boyd, the principal of The Boyd Company, a New Jersey-based site selection firm, who has followed the Tesla battery factory site selection closely, expects that Reno, Nev., is the front-runner for the plant, but that a site in Texas may be retained for future projects. Nevada has a favorable tax system and proximity to Tesla's Freemont, Calif., plant as well as lithium deposits, which are a component of its batteries.
Tesla needs the plant to make a mass-market vehicle that it now calls its Model III. Its second vehicle, the all-wheel-drive Model X, a sport utility with falcon-wing doors, is out to be released in early 2015.
Credit: By Mike Ramsey
Subject: Electric vehicles; Automobile industry; Site selection; Factories; Building construction
Location: California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2014
Publication date: Jul 17, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1545387553
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1545387553?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Theater Director Robert Wilson on Nikola Tesla's Elegance; The impresario of futuristic theater marvels at Lady Gaga's perfect diction and Stanley Kubrick's mastery of image and sound
Author: Wolfe, Alexandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 July 2014: n/a.
ProQuest document link
Abstract: None available.
Full text: FEW THEATER DIRECTORS have pushed the boundaries of avant-garde performance art as far as Robert Wilson has. Though best known for often shocking experimental theater, Mr. Wilson, 72, has delighted and confounded audiences by leveraging the technology of the day to great effect across a range of art forms, from opera (such as his daringly lighted production of Philip Glass's 1976 work "Einstein on the Beach") to video art (most recently, hi-def video "portraits" of Lady Gaga) to chair designs (like his series of transparent polycarbonate seats illuminated from within by white neon tubes).
Perhaps nothing captures Mr. Wilson's controversial creativity, however, like the annual gala he hosts at the Watermill Center in Water Mill, N.Y., a "laboratory for performance" (per its tagline) that gives young artists of all stripes free rein. Tonight, the roughly 100 who were selected for summer residencies will take over the campus to show off their work using elaborate sets, inventive lighting and newfangled props. (Think: a man running on an outdoor treadmill beneath a flashing neon sign--an installation by Alejandro Moreno Jashés from a few years ago.)
We spoke to Mr. Wilson over lunch at the Watermill Center earlier this month, as preparations for this evening's event were already in full swing.
A technology I can't live without is: programmable lighting controls. Originally all of the light cues were called by a stage manager; now many are executed by a computer. This lets me work much faster. In a split second, the lights can be programmed so they change their direction and color, or focus on the detail of a hand.
An artist I've been dazzled by recently is: Lady Gaga. She is highly disciplined and a perfectionist, and she has an inner concentration and beauty. She also speaks text brilliantly; her diction is perfect. I had her read text of the Marquis de Sade. She asked me how to do it, and I said, "fast, with 20 repeats of this line, five repeats of that." Her ability to count and speak rapidly is astonishing.
I'm currently obsessed with: [Serbian American inventor and engineer] Nikola Tesla. I'm making an opera about his work with [filmmaker] Jim Jarmusch and [composer] Phil Kline. I have been fascinated by Tesla since I was a student--his ideas about electricity and light and the elegance in his dress.
I'm currently reading: Carl Schusterand Edmund Carpenter's "Patterns That Connect." It traces symbols and patterns that appear in all cultures through all periods of time. I am also reading the "Les Mille et Une Nuits" exhibition catalog from the Institut du Monde Arabe [museum in Paris]. I am planning a new opera with Philip Glass based on "The Arabian Nights." These are stories for all ages.
The lighting innovation I'm most excited by is: that they've been able to make HMI lights--which are essentially cold--warm.
My favorite films are: "What Ever Happened to Baby Jane?" for its dark humor and Stanley Kubrick's "2001: A Space Odyssey" for its structure of image and sound. I also like David Lynch's "Blue Velvet." The opening sequence is incredible.
I find inspiration by: living. The world is a library. My first play was written with a 13-year-old deaf boy who had never been to school and knew no words. I met him by accident, walking down the street in Summit, N.J. When designing a chair, I'm most inspired by looking. Gertrude Stein, when asked what she thought about modern art, said that she liked to look at it. I like to look at chairs.
My ideal vacation spot is: Bali, a small cottage by the sea. I go to one that's managed by a hotel that knows nothing about me or who I am. Nor does their clientele. I have complete privacy. Cellphones don't work there due to a very poor satellite connection.
The world's most beautiful hotel is: the Regent in Berlin. It is quiet, discreet, not overly friendly. The beds are very firm and the rooms can be made very dark. It has a first-class kitchen.
My favorite restaurants are: Fischers Fritz at the Regent. The Watermill Kitchen. Bill Campbell's restaurant Topping Rose House, in Bridgehampton, New York. I enjoy the fish and great selection of wines there. And Mustang Sally's on 28th and Seventh, in New York City. I love their corned beef and coleslaw.
My preferred mode of transportation is: train, because I can enter a train in the middle of a city and get off in the middle of another city. I like the bullet trains in Japan.
My relationship to social media is: vicarious. My assistant handles my Facebook and Twitter.
The best form of communication is: body movement and silence. The gesture says it all. My work has universal appeal because it is all staged quietly at first and is not solely dependent on words.
The best strategy for online art auctions is: Let the work speak to you. Don't go to it; let it come to you. Usually, your first impression is the most important.
The best toy for a child is: a long white rabbit with pink eyes and very long floppy ears.
Edited from an interview by Alexandra Wolfe
Credit: By Alexandra Wolfe
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Jul 25, 2014
Section: Life and Style
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1548308703
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1548308703?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Panasonic to Help Build Tesla Battery Plant; Financing Terms Remain Unclear in Pact Between Japanese Electronics Firm, U.S. Electric-Car Maker
Author: Inagaki, Kana; Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 July 2014: n/a.
ProQuest document link
Abstract: None available.
Full text: Panasonic Corp. committed to help electric-car maker Tesla Motors Inc. build a U.S. battery plant, but part of the deal remains missing: the financing plan.
Panasonic said it would invest in equipment, machinery and other tools for the plant, which Tesla has said could cost as much as $5 billion. Panasonic's statement on Thursday gave few details beyond what it said in May when the companies signed a letter of intent to join in construction of the plant.
"We haven't decided yet on the specifics of when, or how much investment we will be making," Panasonic Chief Financial Officer Hideaki Kawai said at a news conference in Tokyo. A person familiar with the matter said earlier that the company initially was planning to invest ¥20 billion to ¥30 billion, or roughly $200 million to $300 million, in the Tesla plant.
The Japanese electronics maker would occupy about half of the plant to make battery cells. U.S.-based Tesla has said the plant could total 10 million square feet and be capable of producing 35 gigawatt hours of battery cells annually, or more than all the combined lithium-ion battery production in the world today. Battery-industry competitors have been critical of the plan, questioning whether the plant's large size would lower costs significantly because much of the cost for batteries is commodity-based.
"The dollar commitment is somewhat underwhelming," said Carter Driscoll, a clean-technology analyst with investment-banking firm MLV & Co. "But I think they are playing a little bit of cat and mouse about who is going to pay for what," he added. "That's clearly not all Panasonic is going to commit to the facility."
In a joint statement, the companies said cost savings would come from "manufacturing cells that have been optimized for electric vehicle design." The plant would reduce transportation, duty and inventory-carrying costs to lower expenses, Tesla and Panasonic said.
Tesla said in February that it expected to invest about $2 billion of its own funds and wanted partners to pay for the rest of the plant, tapping Panasonic as well as raw-material suppliers for battery components.
Yet at the end of the first quarter, Tesla only had $2.4 billion in cash. Panasonic's expected modest initial investment could indicate that Tesla will need to scale back its plans or raise more capital to take on the project.
Colin Langan, a UBS analyst who covers Tesla, said he expects the auto maker to raise more money to complete the project, though it should be able to fund some of the construction from profit the company generates in coming years. Mr. Driscoll also said Tesla will likely need to raise more money, either through convertible-debt or share sales. Earlier this year, Tesla raised $2 billion from a convertible-debt offering.
Tesla Chief Executive Elon Musk has said he is confident that building the plant will lead to a 30% reduction in battery-pack costs, while also providing his company with as many as 500,000 battery packs a year. The electric-car company has been constrained in its ability to produce vehicles by a limited number of cells coming from Panasonic, its only battery supplier.
Panasonic already has an agreement to provide two billion battery cells to Tesla through 2017, the same year that the car maker plans to open the new battery factory. The Japanese company aims to double sales at its auto division in four years, making an expanded alliance with Tesla an attractive prospect.
Still, Panasonic executives, troubled by past investments on plasma displays that later went sour, remain cautious about ramping up spending too aggressively. Panasonic says it has compiled detailed risk scenarios and multiple backup plans in case demand for Tesla cars doesn't increase as expected.
The extended negotiations over the battery plant suggest the difficulty of matching Mr. Musk's ambitions for a factory that would be the largest under one roof in the U.S.--outstripping aircraft and auto plants--with Panasonic's more cautious approach. Tesla has so far declined to use batteries from other big manufacturers, even though the company has faced capacity obstacles for more than a year.
Panasonic has spent the past two years drastically restructuring its television, mobile-phone and semiconductor divisions to stem losses totaling $15 billion. In the latest measure to focus on growth, Panasonic said it would sell its mobile-phone base-station business to Nokia Corp. of Finland. Panasonic and Sony Corp. also said they would form a joint venture with a government-backed fund and an Apple Inc. supplier to develop next-generation panel technology for tablet computers.
In a sign that its turnaround is taking hold, Panasonic said Thursday that operating profit rose 28% to ¥82 billion in its April-June quarter. Sales increased 1.5%, helped by strong performance in the company's housing and automotive businesses. Net profit fell 65% amid a one-time gain in the year-earlier period from a change in Panasonic's pension plan.
Mr. Kawai said Panasonic and Tesla were compiling a plan that would ensure profitability, while Panasonic would make its investments in phases that were in line with demand for Tesla vehicles. Tesla is scouting sites in Arizona, California, Nevada, New Mexico and Texas, and economic-development officials in each state are readying incentive offers that include items such as expedited building permits and cheap electricity.
Like Panasonic, other Japanese electronics companies posted solid quarterly results Thursday, benefiting from years of restructuring to reduce their exposure to consumer electronics. That shift has also helped them cope better with a fall in domestic demand from a sales-tax increase that took effect in Japan in April, raising the tax to 8% from 5%.
Hitachi Ltd. said its first-quarter net profit more than doubled from a year earlier to ¥29 billion thanks to cost-cutting and robust demand for industrial electronics and machinery. In the latest measure to stem costs,Hitachi Chemical Co., a publicly traded subsidiary controlled by Hitachi, said last week it would cut 1,000 jobs in Japan.
Toshiba Corp., the world's No. 2 supplier of flash-memory chips after Samsung Electronics Co., posted a 69% increase in first-quarter net profit. Strength in Toshiba's energy and infrastructure-related businesses helped offset a decline in sales of flash-memory chips used in smartphones and tablets.
Toshiba on Thursday announced new cuts in its business that makes TV sets and other visual products. It plans to halve the number of global sales sites to 12 by the first half of the fiscal year starting in April. The move will reduce the company's global workforce in that business by about 25% and is expected to cut fixed costs by ¥10 billion versus the current fiscal year, Toshiba said.
Fujitsu Ltd. returned to profit for the April-June quarter, helped by steps it took to improve profitability of its mobile-phone business.
Panasonic, Fujitsu and Toshiba all kept their full-year forecasts unchanged. Hitachi raised its net-profit outlook for the April-September period by 9% from three months ago, citing improving macroeconomic conditions in Japan.
"I think the structural environment in Japan is getting close to the U.S. and Europe, and we are finally out of deflation," said Toyoaki Nakamura, Hitachi's chief financial officer.
Megumi Fujikawa, Eric Pfanner and Mayumi Negishi
Credit: By Kana Inagaki And Mike Ramsey
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Jul 31, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1549612202
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1549612202?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Motors' Loss Widens on Higher Spending; Auto Maker Ramps Up Effort to Develop Second Electric Vehicle
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 July 2014: n/a.
ProQuest document link
Abstract:
Earlier in the day, Tesla and Panasonic Corp. said they had reached an agreement for the battery maker to participate in the construction and operation of the world's largest battery factory in the U.S. The so-called Gigafactory would be an investment of as much as $5 billion and employ 6,500 people, giving Tesla capacity for up to 500,000 vehicles a year.
Full text: Tesla Motors Inc said its second-quarter loss increased to $62 million, or 50 cents a share, from a $31 million loss a year ago as the company ramped up spending to develop its second electric vehicle, added workers and expanded into China.
Tesla said it delivered 7,579 Model S vehicles in the quarter, a bit above the 7,500 it had forecast. But Tesla lowered its forecast for revenue and deliveries for the third quarter to 7,800 vehicles from 9,500 because it had to shut down its factory in Fremont, Calif., to install equipment in July. Tesla said it should be able to ramp up production in the final three months of 2014 to reach its sales goal of 35,000.
Earlier Thursday, Tesla and Panasonic Corp. said they had reached an agreement for the battery maker to participate in the construction and operation of the world's largest battery factory in the U.S. The so-called Gigafactory would be an investment of as much as $5 billion and employ 6,500 people, giving Tesla battery capacity for up to 500,000 vehicles a year.
Panasonic, earlier Thursday, reported that operating profit rose 28% to ¥82 billion ($798 million) in the April-June quarter. Sales increased 1.5%, helped by strong performance in its housing and automotive businesses. Net profit dropped 65% owing to a one-time gain in the year-ago period from a change in its pension scheme.
Tesla said it expects its annualized pace of deliveries will hit 100,000 vehicles by the end of next year, as it ramps up production of its Model X sport utility vehicle. In addition to that forecast, Chief Executive Officer Elon Musk boldly predicted that within 10 years, Tesla's electric cars are "heading to a place of no contest when it comes to gasoline," meaning electric cars will be lower cost.
Tesla said in its shareholder letter that it began site work near Reno, Nev., in June but continues to evaluate other locations in Arizona, California, Texas and New Mexico. Mr. Elon Musk, in a call with analysts, said the company would begin site work at one or more other sites and that the company was trying to work with local governments, which he expected would pay for up to 10% of the total project costs.
Revenue for Tesla rose 89% from a year earlier to $769 million. The average automotive revenue per electric car was about $101,000 during the quarter. The company said in a statement that demand for the Model S continues to rise in North America and Europe.
"We believe these markets remain underpenetrated," the auto maker said, addressing concerns expressed by some analysts that sales growth in the U.S. and Europe was cooling off.
Tesla addressed another concern, saying that increased battery cell production by Panasonic in Japan should allow for higher production.
Tesla's earnings were reduced by a noncash interest expense related to raising $2.3 billion in convertible notes earlier this year and stock-based compensation for executives. Tesla's loss from operations rose to $28.7 million as research-and-development costs and overhead jumped 20% combined from the first quarter.
Earnings excluding stock-based executive compensation and the noncash interest expense were $16 million, or 11 cents a share, better than the 4-cent a share consensus forecast of analysts polled by Thomson Reuters.
Tesla adjusted revenue, which takes into account deferred leasing revenue, was $858 million for the quarter. The leases help overall deliveries, but put a lid on top-line GAAP revenue.
Similar to the second quarter, Tesla said its costs would jump in the third quarter to fuel research and development and new employment, with R&D spending rising 20% and overhead increasing 15%. The company said it would be "marginally profitable" on a basis that adjusts for the lease accounting, stock-based compensation and noncash interest expense.
Tesla also said its spending on capital expenses for 2014 could be as high as $950 million, up from an earlier forecast of $850 million.
"We are not currently showing all our cards," he said. "Our cap-ex and R&D numbers are better than they appear because there are things you don't know about."
Credit: By Mike Ramsey
Subject: Research & development--R & D; Research & development expenditures; Executive compensation
Location: United States--US
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Jul 31, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1549970961
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1549970961?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Tesla Loss Widens on Costs
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]01 Aug 2014: B.3.
ProQuest document link
Abstract:
In addition to that forecast, Chief Executive Officer Elon Musk boldly predicted that within 10 years, Tesla's electric cars are "heading to a place of no contest when it comes to gasoline," meaning electric cars will be lower cost.
Full text: Tesla Motors Inc said its second-quarter loss increased to $62 million, or 50 cents a share, from a $31 million loss a year ago as the company ramped up spending to develop its second electric vehicle, added workers and expanded into China.
Tesla said it delivered 7,579 Model S vehicles in the quarter, a bit above the 7,500 it had forecast. But Tesla lowered its forecast for revenue and deliveries for the third quarter to 7,800 vehicles from 9,500 because it had to shut down its factory in Fremont, Calif., to install equipment in July. Tesla said it should be able to ramp up production in the final three months of 2014 to reach its sales goal of 35,000.
Earlier Thursday, Tesla and Panasonic Corp. said they had reached an agreement for the battery maker to participate in the construction and operation of the world's largest battery factory in the U.S. The so-called Gigafactory would be an investment of as much as $5 billion and employ 6,500 people, giving Tesla battery capacity for up to 500,000 vehicles a year.
Panasonic, earlier Thursday, reported that operating profit rose 28% to 82 billion yen ($798 million) in the April-June quarter. Sales increased 1.5%, helped by strong performance in its housing and automotive businesses. Net profit dropped 65% owing to a one-time gain in the year-ago period from a change in its pension scheme.
Tesla said it expects its annualized pace of deliveries will hit 100,000 vehicles by the end of next year, as it ramps up production of its Model X sport utility vehicle. In addition to that forecast, Chief Executive Officer Elon Musk boldly predicted that within 10 years, Tesla's electric cars are "heading to a place of no contest when it comes to gasoline," meaning electric cars will be lower cost.
Tesla said in its shareholder letter that it began site work near Reno, Nev., in June but continues to evaluate other locations in Arizona, California, Texas and New Mexico. Mr. Elon Musk, in a call with analysts, said the company would begin site work at one or more other sites and that the company was trying to work with local governments, which he expected would pay for up to 10% of the total project costs.
Revenue for Tesla rose 89% from a year earlier to $769 million. The average automotive revenue per electric car was about $101,000 during the quarter. The company said in a statement that demand for the Model S continues to rise in North America and Europe.
"We believe these markets remain underpenetrated," the auto maker said, addressing concerns expressed by some analysts that sales growth in the U.S. and Europe was cooling off.
Credit: By Mike Ramsey
Subject: Electric vehicles; Automobile industry; Automobile sales; Company reports; Financial performance; Earnings per share; Capital expenditures; Product development
Location: United States--US California China
People: Musk, Elon
Company / organization: Name: Panasonic Corp; NAICS: 333415, 335222, 335224; Name: Tesla Motors Inc; NAICS: 336999
Classification: 3100: Capital & debt management; 7500: Product planning & development; 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2014
Publication date: Aug 1, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1550071664
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1550071664?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Names Robyn Denholm to Board; Juniper Networks Corporate Officer to Also Helm Tesla's Audit Committee
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Aug 2014: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Motors Inc. named Robyn Denholm, the chief financial officer and chief operations officer of Juniper Networks Inc., to its board of directors.
The appointment is effective August 11.
Ms. Denholm has also been appointed as chairwoman of the company's Audit Committee, and as a member of the Compensation, Nominating and Corporate Governance committees.
Tesla said her committee roles were previously held by Brad Buss, who is vacating his committee positions upon joining SolarCity Corp. as its chief financial officer. Elon Musk, the chief executive officer of Tesla, is chairman of SolarCity. Buss will remain a member of Tesla's board.
Credit: By Mike Ramsey
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Aug 6, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1551473834
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1551473834?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Battery Battle: Electric Cars Glide to 200-Mile Range; As Tesla Preps Cheaper Model 3, LG Chem Is Developing Its Own Battery
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Aug 2014: n/a.
ProQuest document link
Abstract:
In addition to Tesla Motors Inc.'s forthcoming Model 3, a leading battery maker says it is preparing a pack for an electric car that extends the range of most vehicles on the road today, but at a similar price.
Full text: The electric-car era may hit in 2017 when at least two battery-powered cars that can attain 200 miles of driving range and cost less than $40,000 enter the market.
In addition to Tesla Motors Inc.'s forthcoming Model 3, a leading battery maker says it is preparing a pack for an electric car that extends the range of most vehicles on the road today, but at a similar price.
"We are definitely working on making a 200-mile-range battery electric vehicle at around the $30,000 to $35,000 price target," said Prabhakar Patil, chief executive of LG Chem Power Inc., a U.S.-based research arm of the South Korean battery company.
"It's more than a possibility. We feel we will be able to support such a vehicle around the 2017 time frame." He said more than one auto maker is interested in the technology, although he declined to say which ones.
General Motors Co. is almost certainly one of them.
GM, which contracts with LG Chem to supply the Chevrolet Volt plug-in hybrid, has said it plans to introduce a 200-mile-range electric vehicle starting as low as $30,000.
A GM official said the project is on track, although he declined to offer details on the timing. Former CEO Dan Akerson first mentioned the vehicle last year.
The two electric cars GM currently offers--the Volt and Spark--get fewer than 85 miles in range on a single charge. The all-electric Spark gets 82 miles on a charge, while the Volt hybrid gets 38 miles. GM said last week that it will introduce a fully redesigned Volt in 2015. It first introduced the model in late 2010.
The effort to produce a long-range electric vehicle shows the outsize impact that Tesla has had on the global automotive industry. When it announced that it was making a third-generation vehicle to come out in 2017 with a 200-mile range and a starting price of $35,000, many experts were skeptical it was possible because there appeared to be a lack of breakthroughs on this technology to improve range or lower costs.
Tesla alone has offered long-range electric vehicles and has been able to command a premium for them. Deutsche Bank upgraded Tesla's shares Monday on its capability to produce more vehicles, sending the stock to near record highs.
Other electric-vehicle makers, including Nissan Motor Co., the world's largest seller of EVs, have focused on lower prices rather than extending the range. The Nissan Leaf has a range of about 75 miles. That range is enough for most drivers' daily needs.
Still, a longer range and lower price tag could make electric cars more appealing to buyers who worry that today's vehicles won't hold enough charge to service their everyday needs.
Today, electric vehicles make up less than 1% of the new cars sold in the U.S., but the number has been rising.
Nissan, as the leader in EV sales, sold 15,755 Leafs through July in the U.S., up 35% over last year. Although most car makers sell an electric vehicle, most are symbolic offerings to meet California's air-quality regulations and nearly all have a range under 100 miles.
Today, the only electric vehicle with a 200-mile range is the Tesla Model S, a car that starts at $71,000, underpinned by a massive, 1,000-pound battery pack that experts believe costs at least $15,000. Tesla is working to reduce the cost of the pack by 30% by building a giant battery plant with Panasonic Corp. and put out a car in 2017 that costs as little as $35,000 and still hits 200 miles--a range the company thinks is long, to entice people to ditch gasoline-fueled vehicles.
Mr. Patil, of LG Chem, said the batteries it is using are lithium-ion pouch cells, different from the small AA-size batteries Tesla uses in its car. The flexibility of pouches allows car makers to squeeze them into different compartments.
A combination of chemistry improvements that increase the amount of energy storage as well as cost-reduction efforts and better management of the electrical system, should allow LG Chem to lower the production price to make way for an affordable, long-range EV, he said.
Late last month, Tesla Chief Executive Elon Musk confidently proclaimed that electric vehicles are "heading to a place of no contest when it comes to gasoline," meaning electric cars will be lower cost.
Credit: By Mike Ramsey
Subject: Electric vehicles; Automobile industry
Location: California United States--US
Company / organization: Name: LG Chem Power Inc; NAICS: 335912; Name: Deutsche Bank AG; NAICS: 522110, 551111; Name: Nissan Motor Co Ltd; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999
Product name: Chevrolet Volt
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Aug 11, 2014
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1552459406
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1552459406?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Consumer Reports Still Loves Tesla but Finds a Few Problems; Ratings Magazine Says Long-Term Use of Car Still Mostly Positive Despite Some Issues
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Aug 2014: n/a.
ProQuest document link
Abstract:
Consumer Reports, the influential ratings magazine that takes no advertising, said its long-term ownership of the Tesla Model S electric car has been mostly positive, but the magazine had several reliability problems with the car, echoing a similar result from Edmunds.com.
Full text: Consumer Reports, the influential ratings magazine that takes no advertising, said its long-term ownership of the Tesla Model S electric car has been mostly positive, but the magazine had several reliability problems with the car, echoing a similar result from Edmunds.com.
"We've been letting a bunch of staff members drive it. It has been to Washington, D.C., twice. We've been using SuperChargers...everybody unanimously loves the car," said Gabe Shenhar, program manager and senior auto testing engineer for the Yonkers, N.Y., magazine in an interview. "But there have been some issues you don't expect from a $90,000 car."
Among the issues were a creak from the vehicle's passenger-side A-pillar, the beam that holds the windshield and roof in place. The car's 17-inch display screen also stopped functioning, the car's charger adapter broke and there were problems with the retractable door handle and the front trunk, or "fronk."
"If you were a customer and the screen died, it would be a major pain in the butt," Mr. Shenhar said. Consumer Reports purchases all of its test vehicles, unlike many other magazines that get loaners from the companies. Edmunds.com also purchased a Model S and experienced a long list of problems, including a video screen that stopped functioning, as well as drive module issues, and three instances of the car dying roadside as well as a number of other small problems.
In a blog post, Mr. Shenhar complimented Tesla's repair services as going the extra mile and replacing items that weren't even broken and making the experience as good as it could be.
Consumer Reports helped to launch the vehicle's success. Its road test yielded a 99 out of 100, the highest score the magazine has ever given a car. That rating is on first impressions, not longer-term use. The company's annual reliability survey, which comes out late in the year, gave a rank of "average" for the small number of users who rated the car in its first year on the market.
The long-term review won't affect Consumer Reports' earlier road test rating or purchase recommendation, he said. However, if the survey of customers finds a below-average reliability, the magazine will be forced to pull its recommendation, he said.
Tesla Chief Executive Officer Elon Musk late last month acknowledged that the company had reliability issues with some of its earlier production models. The company has been making improvements to the Model S, which starts at $71,000, as it continues to ramp up production to meet strong demand for the vehicle.
"We definitely had some quality issues in the beginning, because we're just basically figuring out how to make the Model S. And I think we've addressed almost all of those," he said.
Tesla shares closed about flat in regular trading, but were up 4.5% after hours.
Credit: By Mike Ramsey
Subject: Automobile industry; Magazines
Location: Washington DC
People: Musk, Elon
Company / organization: Name: Edmunds.com; NAICS: 511140; Name: Consumer Reports; NAICS: 511120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Aug 11, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: New s
ProQuest document ID: 1552481831
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1552481831?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Motors Extends Model S Warranty Retroactively; Warranty Extended to Eight Years, With No Limits on Miles
Author: Armental, Maria
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Aug 2014: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. has extended the warranty of the Model S electric car to eight years, with no limit on miles, Chief Executive Officer Elon Musk wrote on the company's blog on Friday.
Full text: Tesla Motors Inc. has extended the warranty of the Model S electric car to eight years, with no limit on miles, Chief Executive Officer Elon Musk wrote on the company's blog on Friday.
The warranty extension--which matches the company's battery pack warranty--will be retroactive and will have no limit on the number of owners during the warranty period, Mr. Musk wrote.
"In hindsight, this should have been our policy from the beginning of the Model S program," Mr. Musk wrote. "If we truly believe that electric motors are fundamentally more reliable than gasoline engines, with far fewer moving parts and no oily residue or combustion byproducts to gum up the works, then our warranty policy should reflect that."
The change, Mr. Musk said, will "have a moderately negative effect" on the company's earnings in the short term, Mr. Musk said.
Consumer Reports and Edmunds.com have said they had several reliability problems with the electric car.
Among the issues Consumer Reports found were a creak from the vehicle's passenger-side A-pillar, the beam that holds the windshield and roof in place. The car's 17-inch display screen also stopped functioning, the car's charger adapter broke and there were problems with the retractable door handle and the front trunk, or "fronk," the ratings magazine said.
Late last month, Mr. Musk has acknowledged reliability issues with some of the company's earlier production models and said the company had been making improvements to the Model S, which starts at $71,000, as it continues to ramp up production to meet strong demand for the vehicle.
Michael Ramsey contributed to this article.
Credit: By Maria Armental
Subject: Warranties; Automobile industry
Company / organization: Name: Edmunds.com; NAICS: 511140; Name: Consumer Reports; NAICS: 511120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Aug 15, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1553440149
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1553440149?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Expanding China Power Network; Car Maker to Build 400 Charging Outlets at China Unicom Retail Stores in 120 Cities
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Aug 2014: n/a.
ProQuest document link
Abstract:
According to Tesla's website, the company has 13 existing Superchargers in Asia.
Full text: Tesla Motors Inc. struck a deal to expand its network of charging stations in China with China United Network Communications Corp.--or China Unicom--a telecommunications company.
The move sent Tesla's shares to a record high on Friday. The stock rose as high as $272 during the day before finishing up 2% at $269.70 in 4 p.m. trading.
As part of the agreement, Tesla will build 400 charging outlets at China Unicom retail stores in 120 Chinese cities, Tesla confirmed in a statement. These chargers would be similar to the company's level 2 chargers installed at U.S. parking lots and garages, but would use a faster charging rate. In the U.S., Tesla has rolling out similar charging equipment at hotels, resorts and restaurants since the spring.
In addition, Tesla will build 20 of its high-speed Superchargers at China Unicom retail outlets in 20 cities. Superchargers allows Tesla owners to charge half a car's battery in about 20 minutes, providing a quicker method of recharging for drivers taking longer trips between cities.
Tesla already has more than 200 charging points nationally across China. According to Tesla's website, the company has 13 existing Superchargers in Asia.
The lack of public infrastructure in China has been an impediment to its adoption of electric vehicles. However, the central government has recently begun to add incentives for the purchase of electric cars and is considering a $16 billion (100 million yuan) investment in charging infrastructure, according to Bloomberg News.
Credit: By Mike Ramsey
Subject: Electric vehicles
Location: United States--US China
Company / organization: Name: Bloomberg News; NAICS: 519110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Aug 29, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1558126738
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1558126738?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla to Choose Nevada for Battery Factory; State Likely Offered Large Incentives to Lure $5 Billion Plant
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Sep 2014: n/a.
ProQuest document link
Abstract:
[...]the proximity of Nevada, in addition to the site work already completed were factors that tipped the scales in Nevada's favor.
Full text: Tesla Motors Inc. is expected to choose a site in Nevada for its proposed up to $5 billion battery factory and could disclose the move on Thursday, according to a person familiar with the electric auto maker's plans.
State officials scheduled a news conference at 4 p.m. Thursday in Carson City to announce the plant. Nevada likely offered Tesla one of the largest incentive packages in the history of the U.S. auto industry to lure the factory to a state with relatively little presence in automotive manufacturing.
A spokesperson for Nevada's state economic development office declined to immediately comment on Tesla's decision. Gov. Brian Sandoval hinted at the announcement on Twitter: "Stay tuned for a major announcement tomorrow at 4PM related to economic development in #NV."
By choosing Nevada, Tesla would get a site close to its Fremont, Calif., assembly plant and ready access to lithium, a key raw material for the batteries. The maker of a $71,000 and up electric sedan has said it plans to employ up to 6,500 workers and to produce 35 gigawatt hours of battery cells annually in its so-called gigafactory. The plant eventually is expected to produce more than all of the current lithium-ion battery production in the world today.
"I think the single most important factor is the [site's] low-cost green power," said John Boyd, principal of The Boyd Company, a site selection firm that had forecast Nevada as the likely winner. Reno offers Tesla choices among solar, wind and geothermal energy for the plant. He also said Nevada's lack of corporate and personal income taxes aided its selection.
The company needs to start construction soon to complete the factory by 2017, when it plans to roll out its third vehicle, an electric car called the Model III with a 200-mile range that it aims to sell starting at $35,000.
Tesla earlier this year began developing a site near Reno, Nev., though the company had said it was possible other states could still compete for the project. Lawmakers in California had rushed to put together an incentive package before the end of its 2014 legislative session, but couldn't get a commitment from Tesla before the end of its session last month.
Texas also mounted a strong effort to land the plant. Texas Gov. Rick Perry made at least one visit to California to court Tesla. In the end, the proximity of Nevada, in addition to the site work already completed were factors that tipped the scales in Nevada's favor.
Tesla Chief Executive Officer Elon Musk aims to reduce battery costs by 30% through the scale of the plant and by bringing in production partners who would provide the base anode, cathode and electrolyte material processing into the giant facility. The plant could be up to 10 million square feet in size, the company has said, bigger than any single factory in the U.S.
Tesla has a commitment from Panasonic Corp., which now supplies batteries for the company's Model S, to help run the battery cell making operations and underwrite some of the costs. In a July call with investors, Mr. Musk said he expected Panasonic to contribute between 30% and 40% of the up to $5 billion total cost of the factory.
However, battery industry researchers and executives have been skeptical of Tesla's plan for the factory. On Wednesday, Lux Research, issued a report estimating that the gigafactory would have 57% overcapacity in 2020 as sales of Tesla vehicles will be less than half of what the company is forecasting.
Tesla has said it would need a location with between 500 acres and 1,000 acres for its complex. Some of that land would be used for solar and wind-powered electricity generation.
Since early this year, Tesla has been scouting sites in Arizona, California, Nevada, New Mexico and Texas, and had set off a competition between the states to come up with incentive packages that could total 10% of the project cost--or about $500 million.
Credit: By Mike Ramsey
Subject: Automobile industry; Economic development; Factories
Location: United States--US California Nevada
People: Perry, Rick Musk, Elon Sandoval, Brian
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Sep 3, 2014
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1559142194
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1559142194?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Tesla Picks Reno Site For Battery Gigafactory
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Sep 2014: B.6.
ProQuest document link
Abstract:
[...]the proximity of Nevada, in addition to the site work already completed were factors that tipped the scales in Nevada's favor.
Full text: Tesla Motors Inc. is expected to choose a site in Nevada for its proposed battery factory, costing up to $5 billion, and could disclose the move on Thursday, according to a person familiar with the electric auto maker's plans.
State officials scheduled a news conference at 4 p.m. Thursday in Carson City to announce the plant. Nevada likely offered Tesla one of the largest incentive packages in the history of the U.S. auto industry.
A spokesperson for Nevada's state economic development office declined to comment on Tesla's decision. Gov. Brian Sandoval hinted at the announcement on Twitter: "Stay tuned for a major announcement tomorrow at 4PM related to economic development in #NV."
By choosing Nevada, Tesla would get a site close to its Fremont, Calif., assembly plant and ready access to lithium, a key raw material for the batteries. The maker of a $71,000 and up electric sedan has said it plans to employ up to 6,500 workers and to produce 35 gigawatt hours of battery cells annually in its so-called gigafactory.
The plant eventually is expected to produce more than all of the current lithium-ion battery production in the world today.
"I think the single most important factor is the [site's] low-cost green power," said John Boyd, principal of Boyd Co., a site selection firm that had forecast Nevada as the likely winner. Reno offers Tesla choices among solar, wind and geothermal energy for the plant. He also said Nevada's lack of corporate and personal income taxes aided its selection.
The company needs to start construction soon to complete the factory by 2017, when it plans to roll out its third vehicle, an electric car called the Model III with a 200-mile range that it aims to sell starting at $35,000.
Tesla earlier this year began developing a site near Reno, Nev., though the company had said it was possible other states could still compete for the project. Lawmakers in California had rushed to put together an incentive package before the end of its 2014 legislative session, but couldn't get a commitment from Tesla before the end of its session last month.
Texas also mounted a strong effort to land the plant. Texas Gov. Rick Perry made at least one visit to California to court Tesla. In the end, the proximity of Nevada, in addition to the site work already completed were factors that tipped the scales in Nevada's favor.
Tesla Chief Executive Officer Elon Musk aims to reduce battery costs by 30% through the scale of the plant and by bringing in production partners who would provide the base anode, cathode and electrolyte material processing into the giant facility. The plant could be up to 10 million square feet in size, the company has said, bigger than any single factory in the U.S.
Tesla has a commitment from Panasonic Corp., which now supplies batteries for the company's Model S, to help run the battery cell making operations and underwrite some of the costs. In a July call with investors, Mr. Musk said he expected Panasonic to contribute between 30% and 40% of the up to $5 billion total cost of the factory.
However, battery industry researchers and executives have been skeptical of Tesla's plan for the factory. On Wednesday, Lux Research, issued a report estimating that the gigafactory would have 57% overcapacity in 2020 as sales of Tesla vehicles will be less than half of what the company is forecasting.
Tesla has said it would need a location with between 500 acres and 1,000 acres for its complex. Some of that land would be used for solar and wind-powered electricity generation.
Earlier this year, Tesla scouted sites in Arizona, California, Nevada, New Mexico and Texas, setting off a competition between the states to offer incentive packages that could total 10% of the project cost -- or about $500 million.
Credit: By Mike Ramsey
Subject: Automobile industry; Economic development; Factories; Site selection; Electric vehicles; Batteries
Location: United States--US California Nevada
People: Perry, Rick Musk, Elon Sandoval, Brian
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 5100: Facilities management; 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.6
Publication year: 2014
Publication date: Sep 4, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1559521907
DocumentURL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1559521907?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Confirms Nevada to Get Battery Factory; State Officials Estimate $100 Million Economic Boost Over 20 Years
Author: Ramsey, Mike; Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Sep 2014: n/a.
ProQuest document link
Abstract:
Tesla Chief Executive Elon Musk said the proposed battery factory is "an important step in advancing the cause of sustainable transportation and will enable the mass production of compelling electric vehicles for decades to come." Since early this year, Tesla has been scouting sites in Arizona, California, Nevada, New Mexico and Texas, and had set off a competition between the states to come up with incentive packages that could total 10% of the project cost--or about $500 million.
Full text: CARSON CITY, Nevada--Tesla Motors Inc. confirmed on Thursday it would build a $5 billion advanced battery factory in Nevada, a move that Gov. Brian Sandoval estimates would have a $100 billion economic impact over the next 20 years for a state that today has relatively little manufacturing.
For Nevada, the plant represents a opportunity to expand its manufacturing employment base and diversity an economy largely built on tourism. Manufacturing represents about 4% of the workforce in the state, compared to the dominant leisure and hospitality industry, which is more than 25%, according to the Bureau of Labor Statistics.
"Tesla coming here is going to have a big impact," said Marc Johnson, an economist and the president of the University of Nevada. "We have been a relatively high unemployment rate through the downturn. It will be a technical push ahead for a community that has been a gaming or tourism community."
The decision came after months of discussions between Tesla, a Palo Alto, Calif., maker of $71,000 and up luxury electric cars, and Nevada officials. It wasn't immediately clear how much of a financial subsidy Nevada offered the Silicon Valley electric vehicle maker to locate its so-called gigafactory in the state.
Tesla Chief Executive Elon Musk said the proposed battery factory is "an important step in advancing the cause of sustainable transportation and will enable the mass production of compelling electric vehicles for decades to come."
Since early this year, Tesla has been scouting sites in Arizona, California, Nevada, New Mexico and Texas, and had set off a competition between the states to come up with incentive packages that could total 10% of the project cost--or about $500 million.
Gov. Sandoval said Tesla's decision allows his state to help Tesla change the world. "Nevada is ready to lead." Legislators also applauded the move, with Nevada Assembly Speaker Marilyn Kirkpatrick saying she has given the plan initial support and looks forward to receiving more information so the legislature can meet and take necessary action.
"This is a significant opportunity to make a major stride to improve our statewide economy."
In choosing Nevada, Tesla is locating in a state that was hit disproportionately hard by the recession and in the years that immediately followed. Consumer spending went bust and the housing market sagged, leading to high unemployment.
Nevada is close to Tesla's Fremont, Calif., assembly plant and ready access to lithium, a key raw material for batteries that power electric cars. The auto maker has said it plans to employ up to 6,500 workers and to produce 35 gigawatt hours of battery cells annually in its gigafactory.
The plant eventually is expected to produce more than all of the current lithium-ion battery production in the world today. Tesla has a commitment from Panasonic Corp., which now supplies batteries for the company's Model S, to help run the battery cell making operations and underwrite some of the costs. In a July call with investors, Mr. Musk said he expected Panasonic to contribute between 30% and 40% of the up to $5 billion total cost of the factory.
Nevada currently has a relatively low reliance on manufacturing, with output totaling $5.5 billion in 2012, according to the National Association of Manufacturers, and 40,500 people--or just 3.4% of its workforce--employed in the field. Manufacturing's share of gross domestic product is 4.1% in Nevada, or lower than Texas, New Mexico, California and Arizona that were in competition for the factory.
Kent Symons, who has lived in the Lake Tahoe area for 32 years and works in real estate, said the project, "is huge for the state of Nevada but even bigger for this area."
By contrast, 10.6% of California's GDP and 15.9 of Texas' GDP is from manufacturing. In Arizona, the share of the state's workforce in manufacturing job is nearly double the share in Nevada.
In selecting Nevada, Tesla is picking a state with relatively low manufacturing pay. NAM estimates Nevada's manufacturing employees make $61,896 annually, slightly higher than New Mexico but about 31% less than the pay in California. Most states in the traditional Rust Belt pay at least $10,000 more annually for manufacturing jobs than Nevada's average rate.
According to Good Jobs First, a Washington think tank looking into state and local subsidies, Nevada has dished out $205.1 million in corporate subsidies since 1997. The biggest before Tesla, according to the organization, was a $89 million deal in 2012 with Apple Inc. to establish a data center in Reno.
Good Jobs First said in a recent report that it estimates there have been 240 so-called megadeals of $75 million in subsidies or more, and 11 deals that exceed 1 billion. Michigan, the home of three U.S. auto makers, has the most megadeals, and New York is spending the most with megadeals totaling $11.4 billion, the organization said.
Credit: By Mike Ramsey And John D. Stoll
Subject: Manufacturing; Electric vehicles; Factories; Tourism; Recessions; Unemployment; Economic growth; Gross Domestic Product--GDP; Workforce
Location: Texas California Nevada Arizona New Mexico
People: Musk, Elon Sandoval, Brian
Company / organization: Name: Bureau of Labor Statistics; NAICS: 921110, 923110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Sep 4, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1559967115
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1559967115?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Nevada Lands Tesla Facility --- State Hopes $5 Billion Battery Plant Will Help Create a Manufacturing Sector
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Sep 2014: B.5.
ProQuest document link
Abstract:
Tesla Chief Executive Elon Musk said the proposed battery factory "is critical to our efforts to deliver our mass-market car," the forthcoming Model 3, which would start at $35,000 and travel 200 miles on an electric charge. Since early this year, Tesla has been scouting sites in Arizona, California, Nevada, New Mexico and Texas, and had set off a competition between the states to come up with incentive packages that could total 10% of the project cost -- or about $500 million.
Full text: CARSON CITY, Nevada -- Tesla Motors Inc. confirmed on Thursday it would build a $5 billion advanced battery factory in Nevada, a move that Gov. Brian Sandoval estimates would have a $100 billion economic impact over the next 20 years for a state that today has relatively little manufacturing.
To get it, the state offered incentives that could total $1.2 billion.
For Nevada, the plant represents an opportunity to expand its manufacturing employment base and diversify an economy largely built on tourism. Manufacturing represents less than 4% of the workforce in the state, compared with the dominant leisure and hospitality industry, which is more than 25%, according to the Bureau of Labor Statistics.
"Tesla coming here is going to have a big impact," said Marc Johnson, an economist and the president of the University of Nevada. "We have had a relatively high unemployment rate through the downturn. It will be a technical push ahead for a community that has been a gaming or tourism community."
The decision came after months of discussions between Tesla, a Palo Alto, Calif., maker of $71,000-and-up luxury electric cars, and Nevada officials.
Tesla Chief Executive Elon Musk said the proposed battery factory "is critical to our efforts to deliver our mass-market car," the forthcoming Model 3, which would start at $35,000 and travel 200 miles on an electric charge.
Mr. Musk said the decision between Nevada and other states was "tight," but in the end its ability to move quickly to allow Tesla to set up the factory in under three years was critical. He said the plant would be energy self-sufficient, using geothermal, wind and sun to provide electricity.
Since early this year, Tesla has been scouting sites in Arizona, California, Nevada, New Mexico and Texas, and had set off a competition between the states to come up with incentive packages that could total 10% of the project cost -- or about $500 million.
Nevada's Legislature will seek to approve a bill that will allow Tesla to receive between $750 million and $1 billion in tax abatements and $195 million in tax credits. The state expects, however, that over 20 years the plant still will generate $1.9 billion in tax revenue.
Gov. Sandoval said Tesla's decision allows his state to help Tesla change the world. "Nevada is ready to lead." Legislators also applauded the move, with Nevada Assembly Speaker Marilyn Kirkpatrick saying she has given the plan initial support and looks forward to receiving more information so the Legislature can meet and take necessary action. The governor said the average wage at the plant would be $25 per hour.
"This is a significant opportunity to make a major stride to improve our statewide economy."
In choosing Nevada, Tesla is locating in a state that was hit disproportionately hard by the recession and in the years that immediately followed. Consumer spending went bust and the housing market sagged, leading to high unemployment.
Nevada is close to Tesla's Fremont, Calif., assembly plant and ready access to lithium, a key raw material for batteries that power electric cars. The auto maker has said it plans to employ up to 6,500 workers and to produce 35 gigawatt hours of battery cells annually in its so-called gigafactory.
The plant eventually is expected to produce more than all of the current lithium-ion battery production in the world today. Tesla has a commitment from Panasonic Corp., which now supplies batteries for the company's Model S, to help run the battery cell making operations and underwrite some of the costs. In a July call with investors, Mr. Musk said he expected Panasonic to contribute between 30% and 40% of the up to $5 billion total cost of the factory.
JB Straubel, the chief technical officer for Tesla, also attended the announcement and said that the development of the company's Model 3 sedan is on track.
Nevada currently has a relatively small manufacturing sector with annual output totaling $5.5 billion in 2012, according to the National Association of Manufacturers, and employs 40,500 people -- or just 3.4% of its workforce -- in the field.
Manufacturing's share of gross domestic product is 4.1% in Nevada, lower than in Texas, New Mexico, California and Arizona, the states that were in competition for the factory.
By contrast, 10.6% of California's GDP and 15.9% of Texas' GDP is from manufacturing. In Arizona, the share of the state's workforce in manufacturing jobs is nearly double the share in Nevada.
In selecting Nevada, Tesla is picking a state with relatively low manufacturing pay. NAM estimates Nevada's manufacturing employees make $61,896 annually, slightly higher than New Mexico but about 31% less than the pay in California. Most states in the traditional Rust Belt pay at least $10,000 more annually for manufacturing jobs than Nevada's average rate.
---
John D. Stoll contributed to this article.
Credit: By Mike Ramsey
Subject: Recessions; Unemployment; Gross Domestic Product--GDP; Site selection; Factories; Economic growth
Location: Nevada
People: Sandoval, Brian
Company / organization: Name: Bureau of Labor Statistics; NAICS: 921110, 923110; Name: Tesla Motors Inc; NAICS: 336999
Classification: 9180: International; 9110: Company specific; 8680: Transportation equipment industry; 5310: Production planning & control
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2014
Publication date: Sep 5, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Financ e
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1560018300
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1560018300?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Little Opposition Seen in Nevada for Tesla Tax Breaks; Electric-Car Maker Hopes to Bring $5 Billion Battery Factory to State
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Sep 2014: n/a.
ProQuest document link
Abstract:
Republican Gov. Brian Sandoval urged legislators in the two Democratic-controlled houses to seize an "extraordinary opportunity" to land the electric car maker's "gigafactory" and the tens of thousands of jobs he said would help pull Nevada from the worst economic crisis in state history.
Full text: UPDATE: Nevada Approves Tesla Incentives Package Valued at Up to $1.3 Billion
Critics say Nevada lawmakers are gambling with taxpayers' money, but they clearly were in the minority as legislators moved forward with an unprecedented package of up to $1.3 billion in incentives they hope to approve in the days ahead to bring Tesla Motors' $5 billion battery factory to the state.
Republican Gov. Brian Sandoval urged legislators in the two Democratic-controlled houses to seize an "extraordinary opportunity" to land the electric car maker's "gigafactory" and the tens of thousands of jobs he said would help pull Nevada from the worst economic crisis in state history.
Legislative leaders, who convened in a special session, expected to approve the package of tax breaks and other incentives by Thursday night or Friday. The leader of the Assembly's Republicans, Pat Hickey of Reno, was among those predicting it would pass by an "overwhelming" margin.
Even opponents conceded it was unlikely they would stop the huge corporate giveaway, which they say won't benefit typical middle-class Nevadans.
"All the lobbyists for various interests say that unless you have a hand in the Tesla deal, it's not good for you," said Bob Fulkerson, state director for the Progressive Leadership Alliance of Nevada.
"But everybody then also says that it's a done deal," he told the Associated Press Wednesday night.
State senators spent nearly 10 hours in negotiations behind closed doors Wednesday before following the Assembly's lead and adjourning about 10 p.m.
The Senate bill requires Tesla to spend $3.5 billion within 10 years. It mandates half the jobs go to Nevada residents, at both the factory expected to employ 6,000-plus and among the 3,000 projected construction jobs.
The Senate planned to return Thursday to begin debate on the biggest part of the incentive package for the electric-car maker: up to $1.1 billion to finance the abatement of Tesla's various property, sales and use taxes, in some cases for up to 20 years.
Before it adjourned at around 9 p.m., the Assembly completed public hearings on two smaller pieces of the incentive package. One would extend electricity discounts for Tesla and other large, qualifying companies that move into the state. The other clarifies that Tesla would be able to sell the cars it manufactures at Tesla-owned dealerships in Nevada.
The latter was one of the hurdles Tesla had identified in Texas before announcing last week it had picked Nevada for the battery factory in a competition that also included California, Arizona and New Mexico.
The Assembly also completed a hearing on a key part of the plan to offset nearly $200 million in tax credits for Tesla by ending a tax credit that has been provided for 43 years to insurance companies that locate their home offices in Nevada.
Chris Nielsen, secretary of the Nevada Board of Equalization, said only 1% of the approximately 1,200 insurance companies doing business in the state qualify for the credit and that eliminating it would save $125 million over five years.
Nevada Assembly Speaker Marilyn Kirkpatrick said she long has favored ending the credit that initially was enacted on a temporary basis in 1971, and Mr. Sandoval's administration agreed that economic-development incentives should be temporary ways to bring business to the state.
"Something that lasts for 43 years or longer is not an incentive. In our view it is a subsidy," said Steve Hill, director of the Governor's Office for Economic Development.
Mr. Fulkerson's alliance was part of a coalition of unions, teachers, environmentalists and minority activists who urged lawmakers to slow the rush to approve the package they said was 14 times bigger than any previous subsidies the Legislature has approved.
"We're betting the house, and my grandfather said, `Never bet more than you can afford to lose,'" Mr. Fulkerson said in testimony before the Assembly. He questioned the governor's claims that every $1 Nevadans invest in the package will bring a return of $80. "If that's not true, then this house of cards could fall down."
The package also drew criticism from some conservatives, including Lee Hoffman, a retired miner and chairman of the Elko County Republican Party, who said the Legislature was in effect picking "winners and losers" by extending the tax breaks exclusively to Tesla Motors Inc.
"They will benefit one specific company, one specific industry at the expense of other businesses, other taxpayers, other consumers," Hoffman testified from Elko.
Outside the Capitol, backers of a Nevada film tax credit that would be gutted to help pay for the Tesla tax breaks protested with signs that read, "Keep Nevada Film Alive" and "Movie Industry Jobs Are Now."
Gov. Sandoval, who ordered the special session, said the lithium battery factory and its 6,500 workers would generate more than 20,000 construction and other related jobs and up to $100 billion for Nevada's economy over the next 20 years.
Still, little legislative opposition has emerged since Tesla chief executive Elon Musk announced alongside Sandoval on the Capitol steps last week that Nevada was his pick for the factory expected to open in 2017. The venture is critical to cutting costs for Musk's next line of more affordable electric cars.
Subject: Automobile industry; Incentives; Alliances; Bills
Location: California Nevada
People: Sandoval, Brian
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: Associated Press; NAICS: 519110; Name: Progressive Leadership Alliance of Nevada; NAICS: 813940
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Sep 11, 2014
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1561255772
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1561255772?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Receives Nevada Tax Breaks; Company Gets Incentives and Subsidies in Deal for $5 Billion Battery Factory
Author: Lazo, Alejandro
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Sep 2014: n/a.
ProQuest document link
Abstract:
Nevada Gov. Brian Sandoval signed an incentives package for Tesla Motors Inc. late Thursday night, two days after the Republican governor called a special session of the state's legislature to approve a series of tax breaks and other economic aid for the electric-car maker to build a $5 billion advanced battery factory in the state.
Full text: Nevada Gov. Brian Sandoval signed an incentives package for Tesla Motors Inc. late Thursday night, two days after the Republican governor called a special session of the state's legislature to approve a series of tax breaks and other economic aid for the electric-car maker to build a $5 billion advanced battery factory in the state.
The governor signed four bills in a ceremony in Carson City, including Senate Bill 1, which exempts the Palo Alto, Calif.-based company from paying property taxes for up 10 years, and sales and local sales and employer excise taxes for 25 years. The bill also approves up to $195 million in transferable tax credits, those that allow a company to sell the credit to another.
In return, the legislation requires Tesla to spend at least $3.5 billion during the first 10 years of the project and insure that 50% of those hired to build the project and work at the plant are Nevada residents.
"The Legislature has confirmed that this package is indeed in the best interest of our citizens and is good for Nevada," Mr. Sandoval said in a statement.
He also signed three other bills that made up the package, one discounting electricity for Tesla and another ending a $25 million annual subsidy--$125 million over five years--for insurance companies to help pay for Tesla's tax credits, according to the Associated Press.
The plant will bring much-desired manufacturing jobs to the state, whose economy is largely built around the tourism industry centered in Las Vegas. The factory is expected to bring more than 20,000 jobs and $100 billion to Nevada's economy over the next 20 years, the AP said. The car company had been searching for locations in Arizona, California, Nevada, New Mexico and Texas, with all of those states competing to put together packages to lure the company.
Corrections & Amplifications
The price tag for Tesla's battery factory is $5 billion. A story published earlier on WSJ.com incorrectly said it was $5 million. (Sept. 12, 2014)
Credit: By Alejandro Lazo
Subject: Bills
Location: California Nevada Palo Alto California
People: Sandoval, Brian
Company / organization: Name: Associated Press; NAICS: 519110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Sep 12, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1561519060
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1561519060?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Wins Direct-Sales Court Battle in Massachusetts; Luxury Electric Car Company Faces Another Fight in Georgia, Where Dealers Are Trying to Revoke Its Dealer License
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Sep 2014: n/a.
ProQuest document link
Abstract:
The Massachusetts Supreme Judicial Court decision comes two years after the Massachusetts State Automobile Dealers Association sued the Palo Alto, Calif.-based company, saying its method of using company-owned stores to sell direct to consumers, bypassing independent dealers, violated state laws.
Full text: Tesla Motors Inc. won a court battle in Massachusetts that clears the way for its direct-sales methodology, but faces another fight in Georgia, where dealers are trying to revoke its dealer license.
The Massachusetts Supreme Judicial Court decision comes two years after the Massachusetts State Automobile Dealers Association sued the Palo Alto, Calif.-based company, saying its method of using company-owned stores to sell direct to consumers, bypassing independent dealers, violated state laws.
The court ruled the state law only prevented competition between independent dealers and company-owned stores of the same manufacturer, and since Tesla had no independent dealers, it could continue operating its stores.
Tesla, a maker of luxury electric cars, has fought dealer groups state by state to continue its direct-sales methodology. In most states, Tesla has won outright, or reached a compromise that allows the company to operate a handful of stores.
The decision also could be important in influencing other court decisions and legislation in other regions. As it stands, Tesla has filed a lawsuit in New Jersey, which has a law similar to the one in Massachusetts, arguing that it should be allowed to operate there under the current system. Early this year, the New Jersey Motor Vehicle Commission revoked Tesla's license for its two stores saying it hadn't met the conditions of the law.
The Massachusetts decision "does have broader significance because the statute is similar to the way other statutes are structured," said Todd Maron, deputy general counsel for Tesla in an interview.
Dealers are trying to prevent contagion of the direct sales methodology to other auto makers. Today, every new car in the U.S.--other than Tesla--is sold through an independent dealer. Most states have a thicket of laws preventing manufacturers from terminating dealer franchise agreements and barring manufacturers from competing with the dealers.
In Georgia, the state limits sales from manufacturer-owned stores to 150 a year, a tight cap in a state that has among the highest sales of electric vehicles in the U.S. The state dealer association is petitioning to have Tesla's license to sell vehicles revoked, claiming the company sold more than its 150 limit in less than a year, in violation of state law, according to the Atlanta Business Chronicle.
Mr. Maron said "we're under the 150 limit and we don't think (the law) applies, regardless."
Diarmuid O'Connell, Tesla business development director, said the company hopes to have new legislation introduced in Georgia next year that will seek to clarify its ability to sell there. There was an effort last year, but the legislation never moved forward.
"Georgia represents an enormous opportunity," he said. "Our intention is to have this clarified in the legislature."
Credit: By Mike Ramsey
Subject: Automobile dealers; State court decisions; Vehicles; Legislation; Automobile sales
Location: Massachusetts Georgia Palo Alto California
Company / organization: Name: Atlanta Business Chronicle; NAICS: 511110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Sep 15, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1562010374
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1562010374?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Nevada Gets Musked; Tesla's billionaire extracts $1.3 billion in taxpayer subsidies.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Sep 2014: n/a.
ProQuest document link
Abstract:
Tesla will also get $195 million in transferable tax credits that it can sell to other businesses. Since Nevada has no personal or corporate income tax, Tesla will effectively operate tax-free in the state.
Full text: Charles Munger, vice chairman of Berkshire Hathaway, the other day described Silicon Valley billionaire Elon Musk as a "genius." Maybe he was alluding to the Tesla CEO's cunning ploy to mine subsidies from Nevada taxpayers.
Last week the Silver State's legislature unanimously approved $1.3 billion in tax breaks for Tesla to build a $5 billion lithium battery factory in Reno that will supply its electric-car plant in Fremont, California. "We have changed the trajectory of this state, perhaps forever," declared Republican Gov. Brian Sandoval, who wagers that the "Gigafactory" will grow the state's economy by $100 billion, or about 80%, over 20 years. Will he take that bet to Vegas?
Politicians bribing businesses to locate in their state is an old if unfortunate story. Tennessee this year offered Volkswagen $274 million to expand its Chattanooga plant. Last year Washington awarded long-time employer Boeing $8.7 billion over 16 years to build its new 777X jetliner in Puget Sound.
But the Tesla giveaway is in a category of its own, coming in an unproven market for a company that has never recorded an annual profit (based on generally accepted accounting principles), notwithstanding various subsidies. Nevada's gift is 15 times larger than any incentive package the state has awarded and among the richest nationwide.
Mr. Musk handled it like a private Sotheby's auction, launching a secret bidding war among southwestern states with a price floor of $500 million. Tesla also wanted to be exempt from states' dealer laws that prevent car companies from selling directly to consumers. Such dealer laws are bad policy, but it must be nice to carve out an exemption that doesn't apply to Ford and GM.
In June Tesla broke ground at the Tahoe Reno Industrial Center, yet Mr. Musk denied that he had made a decision. "We'll be doing something similar in one or two other states," he cautioned, because "it makes sense to have multiple things going in parallel." Message: Better not under bid.
Earlier this month Mr. Musk declared Nevada the winner. "It wasn't all about the incentives," he noted. Nevada is "a get-things-done state." Gov. Sandoval surely appreciated that in-kind contribution to his re-election campaign. Mr. Musk also intimated that Nevada made the most logistical sense. Reno is easily accessible by rail and highway to Fremont, and Nevada hosts the only active lithium mines in the U.S.
But if those were the attractions, then why should Nevada have to pay such a steep subsidy price? Tesla will be exempt from property taxes for 10 years and sales taxes for 20 years at a cost of $1.1 billion to taxpayers. Tesla will also get $195 million in transferable tax credits that it can sell to other businesses. Since Nevada has no personal or corporate income tax, Tesla will effectively operate tax-free in the state.
Tesla will also receive a 10% to 30% electricity discount over eight years. The NV Energy public utility will pay for this discount by charging other customers $1.84 more on average per year. Mr. Musk claims the factory will generate all the renewable energy it needs, but the utility discount will pay for back-up power from the grid because renewables provide intermittent energy.
By being connected to the grid, Tesla will also be able to exploit Nevada's "net-metering" regulations to sell its excess renewable power back to the utility at the retail price, which can be up to 50% higher than wholesale. So Tesla can buy electricity at a discount, and then sell it for a premium.
Tesla will also get a 30% federal tax credit for building its own renewable generation, which will help wipe out its future federal tax liability, assuming it has any. Tax credits and carry-forward losses have already absolved the company from paying federal income tax since at least 2008. Last year Tesla paid a mere $2.5 million in corporate income taxes--zip to Uncle Sam, $178,000 to the states and $2.35 million to foreign governments.
California Gov. Jerry Brown shrewdly observed on Friday that "Nevada's tax breaks are California's benefit" because they will help Tesla cut the cost of its cars by half to $35,000. Mr. Brown understands that California's target of getting one million "zero-emission vehicles" on the road by 2020 will require much larger price discounts than the state's $2,500 rebates.
So maybe Mr. Musk really is a genius, of the political kind at least. He's figured out that as long as you pick a politically favored industry you can be one of the world's richest men and still get taxpayers to finance your operations and become even richer. Not so smart are the Nevada politicians who seem to have no idea how thoroughly they've been fleeced.
Subject: Subsidies; Alternative energy sources; Corporate income tax
Location: California Nevada
People: Sandoval, Brian
Company / organization: Name: Sothebys; NAICS: 453998; Name: Berkshire Hathaway Inc; NAICS: 442210, 445292, 511110, 511130, 524126, 335210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Sep 15, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1562018051
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1562018051?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Nevada Gets Musked; Tesla's billionaire extracts $1.3 billion in taxpayer subsidies.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Sep 2014: n/a.
ProQuest document link
Abstract:
Tesla will also get $195 million in transferable tax credits that it can sell to other businesses. Since Nevada has no personal or corporate income tax, Tesla will effectively operate tax-free in the state.
Full text: Charles Munger, vice chairman of Berkshire Hathaway, the other day described Silicon Valley billionaire Elon Musk as a "genius." Maybe he was alluding to the Tesla CEO's cunning ploy to mine subsidies from Nevada taxpayers.
Last week the Silver State's legislature unanimously approved $1.3 billion in tax breaks for Tesla to build a $5 billion lithium battery factory in Reno that will supply its electric-car plant in Fremont, California. "We have changed the trajectory of this state, perhaps forever," declared Republican Gov. Brian Sandoval, who wagers that the "Gigafactory" will grow the state's economy by $100 billion, or about 80%, over 20 years. Will he take that bet to Vegas?
Politicians bribing businesses to locate in their state is an old if unfortunate story. Tennessee this year offered Volkswagen $274 million to expand its Chattanooga plant. Last year Washington awarded long-time employer Boeing $8.7 billion over 16 years to build its new 777X jetliner in Puget Sound.
But the Tesla giveaway is in a category of its own, coming in an unproven market for a company that has never recorded an annual profit (based on generally accepted accounting principles), notwithstanding various subsidies. Nevada's gift is 15 times larger than any incentive package the state has awarded and among the richest nationwide.
Mr. Musk handled it like a private Sotheby's auction, launching a secret bidding war among southwestern states with a price floor of $500 million. Tesla also wanted to be exempt from states' dealer laws that prevent car companies from selling directly to consumers. Such dealer laws are bad policy, but it must be nice to carve out an exemption that doesn't apply to Ford and GM.
In June Tesla broke ground at the Tahoe Reno Industrial Center, yet Mr. Musk denied that he had made a decision. "We'll be doing something similar in one or two other states," he cautioned, because "it makes sense to have multiple things going in parallel." Message: Better not under bid.
Earlier this month Mr. Musk declared Nevada the winner. "It wasn't all about the incentives," he noted. Nevada is "a get-things-done state." Gov. Sandoval surely appreciated that in-kind contribution to his re-election campaign. Mr. Musk also intimated that Nevada made the most logistical sense. Reno is easily accessible by rail and highway to Fremont, and Nevada hosts the only active lithium mines in the U.S.
But if those were the attractions, then why should Nevada have to pay such a steep subsidy price? Tesla will be exempt from property taxes for 10 years and sales taxes for 20 years at a cost of $1.1 billion to taxpayers. Tesla will also get $195 million in transferable tax credits that it can sell to other businesses. Since Nevada has no personal or corporate income tax, Tesla will effectively operate tax-free in the state.
Tesla will also receive a 10% to 30% electricity discount over eight years. The NV Energy public utility will pay for this discount by charging other customers $1.84 more on average per year. Mr. Musk claims the factory will generate all the renewable energy it needs, but the utility discount will pay for back-up power from the grid because renewables provide intermittent energy.
By being connected to the grid, Tesla will also be able to exploit Nevada's "net-metering" regulations to sell its excess renewable power back to the utility at the retail price, which can be up to 50% higher than wholesale. So Tesla can buy electricity at a discount, and then sell it for a premium.
Tesla will also get a 30% federal tax credit for building its own renewable generation, which will help wipe out its future federal tax liability, assuming it has any. Tax credits and carry-forward losses have already absolved the company from paying federal income tax since at least 2008. Last year Tesla paid a mere $2.5 million in corporate income taxes--zip to Uncle Sam, $178,000 to the states and $2.35 million to foreign governments.
California Gov. Jerry Brown shrewdly observed on Friday that "Nevada's tax breaks are California's benefit" because they will help Tesla cut the cost of its cars by half to $35,000. Mr. Brown understands that California's target of getting one million "zero-emission vehicles" on the road by 2020 will require much larger price discounts than the state's $2,500 rebates.
So maybe Mr. Musk really is a genius, of the political kind at least. He's figured out that as long as you pick a politically favored industry you can be one of the world's richest men and still get taxpayers to finance your operations and become even richer. Not so smart are the Nevada politicians who seem to have no idea how thoroughly they've been fleeced.
Subject: Subsidies; Alternative energy sources; Corporate income tax
Location: California Nevada
People: Sandoval, Brian
Company / organization: Name: Sothebys; NAICS: 453998; Name: Berkshire Hathaway Inc; NAICS: 442210, 445292, 511110, 511130, 524126, 335210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Sep 16, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1562252171
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1562252171?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Breaks the Auto Dealer Cartel; Nevada lets the electric car maker sell directly to consumers. Too bad everyone else still can't.
Author: Kerr, John
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Sep 2014: n/a.
ProQuest document link
Abstract:
[...]last week, it was illegal for a Nevada resident to purchase a Tesla directly from the manufacturer.
Full text: It was not entirely surprising that Nevada last week ponied up $1.3 billion in tax breaks to win the business of Tesla Motors. State officials for decades have struggled to diversify an economy based on gambling and tourism, and the prestige of attracting the high-end electric-car company's massive new lithium battery factory was too great to resist.
But who could have guessed that the Silver State's auto dealers would help usher Tesla into the state?
As Nevada lawmakers celebrated luring billionaire Telsa CEO Elon Musk's factory to the Reno area, critics and supporters of the deal debated the long-term benefits of businesses playing states against each other to secure tax breaks in return for promises of job creation and development. It is also worth noting, though, how the compact exposes the hypocrisy of state laws that ban consumers from buying a new car from anybody but a licensed dealer.
Until last week, it was illegal for a Nevada resident to purchase a Tesla directly from the manufacturer.
All across the country, including in Nevada, Tesla has clashed with dealership groups that vehemently oppose the company's efforts to cut out the middleman and sell its cars straight to buyers. Dealers argue that Tesla's sales model runs afoul of state "franchising" laws banning direct automaker-to-buyer transactions. These statutes go back decades and intricately dictate the relationship between auto manufacturers and sellers while effectively protecting the investments of new-car dealers, an influential political constituency thanks in large part to their high sales-tax collections.
Yet in addition to rubber-stamping the agreement that waived Tesla's property, sales and business taxes for a decade or more--while throwing in discount power rates--the Nevada legislature also approved a bill last week that would exempt the auto maker from franchising regulations outlawing the company's retail approach. The state's auto dealers, who only weeks ago threatened to sue over the matter, shifted gears and endorsed the legislation.
"My car dealers want to assist in any way they can," John Sande of the Nevada Franchise Auto Dealers Association told the Reno Gazette Journal. "Nevada law does not allow Tesla to come in and sell directly to the consumer, so we are going to have to come in and change it so they can sell directly to the consumer."
No doubt the dealers balanced the pros and cons of agitating for their own self-interest against overwhelming political support for the deal and the spending potential of thousands of new, well-paid workers who may prefer a Ford or Chevy pickup over a $70,000 Tesla Model S. But the fact that Nevada legislators so quickly jettisoned a key provision of the state's dealership-franchise provisions speaks volumes about how essential these statutes really are to the well-being of their constituents.
There is no rational reason Tesla--or any other automobile manufacturer--should be restricted from selling new cars directly to those who seek to buy them. Arguments that franchise arrangements benefit consumers ignore not only the higher costs inherent in regulations that limit choice, but the benefits of a vibrant and responsive market in which new-car buyers are free to avail themselves of multiple purchasing options.
Franchisees in many other sectors of the economy, particularly the restaurant industry, prosper while creating jobs and generating state and local tax revenues--all absent the regulatory protection enjoyed by auto dealers. Relaxing laws shielding new-car lots would provide room for entrepreneurs to experiment and innovate while leaving existing interests free to do the same.
Tesla's habit of panhandling for taxpayer support--it also gains millions yearly through a politically imposed system of emission credits in California--makes it a lousy poster child for free markets and regulatory restraint. And Nevada's revised statute should be broader rather than just singling out the electric-car manufacturer for special treatment. But the state's decision to alter its franchise laws represents a modest step forward.
Mr. Kerr is a communications fellow with the Institute for Justice, a nonprofit, public-interest law firm in Arlington, Va., and is the former editorial page editor at the Las Vegas Review Journal.
Credit: By John Kerr
Subject: Automobile dealers; Franchises; Tax cuts
Location: Nevada
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Sep 16, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1562261343
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1562261343?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Nevada Gets Musked; Tesla's billionaire extracts $1.3 billion in taxpayer subsidies.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Sep 2014: n/a.
ProQuest document link
Abstract:
Tesla will also get $195 million in transferable tax credits that it can sell to other businesses. Since Nevada has no personal or corporate income tax, Tesla will effectively operate tax-free in the state.
Full text: Charles Munger, vice chairman of Berkshire Hathaway, the other day described Silicon Valley billionaire Elon Musk as a "genius." Maybe he was alluding to the Tesla CEO's cunning ploy to mine subsidies from Nevada taxpayers.
Last week the Silver State's legislature unanimously approved $1.3 billion in tax breaks for Tesla to build a $5 billion lithium battery factory in Reno that will supply its electric-car plant in Fremont, California. "We have changed the trajectory of this state, perhaps forever," declared Republican Gov. Brian Sandoval, who wagers that the "Gigafactory" will grow the state's economy by $100 billion, or about 80%, over 20 years. Will he take that bet to Vegas?
Politicians bribing businesses to locate in their state is an old if unfortunate story. Tennessee this year offered Volkswagen $274 million to expand its Chattanooga plant. Last year Washington awarded long-time employer Boeing $8.7 billion over 16 years to build its new 777X jetliner in Puget Sound.
But the Tesla giveaway is in a category of its own, coming in an unproven market for a company that has never recorded an annual profit (based on generally accepted accounting principles), notwithstanding various subsidies. Nevada's gift is 15 times larger than any incentive package the state has awarded and among the richest nationwide.
Mr. Musk handled it like a private Sotheby's auction, launching a secret bidding war among southwestern states with a price floor of $500 million. Tesla also wanted to be exempt from states' dealer laws that prevent car companies from selling directly to consumers. Such dealer laws are bad policy, but it must be nice to carve out an exemption that doesn't apply to Ford and GM.
In June Tesla broke ground at the Tahoe Reno Industrial Center, yet Mr. Musk denied that he had made a decision. "We'll be doing something similar in one or two other states," he cautioned, because "it makes sense to have multiple things going in parallel." Message: Better not under bid.
Earlier this month Mr. Musk declared Nevada the winner. "It wasn't all about the incentives," he noted. Nevada is "a get-things-done state." Gov. Sandoval surely appreciated that in-kind contribution to his re-election campaign. Mr. Musk also intimated that Nevada made the most logistical sense. Reno is easily accessible by rail and highway to Fremont, and Nevada hosts the only active lithium mines in the U.S.
But if those were the attractions, then why should Nevada have to pay such a steep subsidy price? Tesla will be exempt from property taxes for 10 years and sales taxes for 20 years at a cost of $1.1 billion to taxpayers. Tesla will also get $195 million in transferable tax credits that it can sell to other businesses. Since Nevada has no personal or corporate income tax, Tesla will effectively operate tax-free in the state.
Tesla will also receive a 10% to 30% electricity discount over eight years. The NV Energy public utility will pay for this discount by charging other customers $1.84 more on average per year. Mr. Musk claims the factory will generate all the renewable energy it needs, but the utility discount will pay for back-up power from the grid because renewables provide intermittent energy.
By being connected to the grid, Tesla will also be able to exploit Nevada's "net-metering" regulations to sell its excess renewable power back to the utility at the retail price, which can be up to 50% higher than wholesale. So Tesla can buy electricity at a discount, and then sell it for a premium.
Tesla will also get a 30% federal tax credit for building its own renewable generation, which will help wipe out its future federal tax liability, assuming it has any. Tax credits and carry-forward losses have already absolved the company from paying federal income tax since at least 2008. Last year Tesla paid a mere $2.5 million in corporate income taxes--zip to Uncle Sam, $178,000 to the states and $2.35 million to foreign governments.
California Gov. Jerry Brown shrewdly observed on Friday that "Nevada's tax breaks are California's benefit" because they will help Tesla cut the cost of its cars by half to $35,000. Mr. Brown understands that California's target of getting one million "zero-emission vehicles" on the road by 2020 will require much larger price discounts than the state's $2,500 rebates.
So maybe Mr. Musk really is a genius, of the political kind at least. He's figured out that as long as you pick a politically favored industry you can be one of the world's richest men and still get taxpayers to finance your operations and become even richer. Not so smart are the Nevada politicians who seem to have no idea how thoroughly they've been fleeced.
Subject: Subsidies; Alternative energy sources; Corporate income tax
Location: California Nevada
People: Sandoval, Brian
Company / organization: Name: Sothebys; NAICS: 453998; Name: Berkshire Hathaway Inc; NAICS: 442210, 445292, 511110, 511130, 524126, 335210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Sep 17, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1562293406
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1562293406?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla CEO Musk Sees Fully Autonomous Car Ready in Five or Six Years; Self-Driving Vehicles Will Be 'a Factor of 10' Safer Than a Person at the Wheel
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Sep 2014: n/a.
ProQuest document link
Abstract:
In addition to his forecast about autonomous vehicles, he said his company expects to start generating strong "free cash flow beginning in the third quarter of 2015" and could pay for the construction of its planned battery factory without additional borrowing.
Full text: Tesla Motors Inc. Chief Executive Officer Elon Musk said the technology to make a fully autonomous car will be ready in five or six years, and the result will be vehicles far less likely to harm occupants and others on the road.
"They will be a factor of 10 safer than a person [at the wheel] in a six-year time frame," Mr. Musk said in an interview with The Wall Street Journal. Once the technology is available, it likely would take several more years, however, to work out the regulatory impediments, he said.
Palo Alto, Calif.-based Tesla is working on its own autonomous driving technology for its electric vehicles in addition to talking with auto suppliers. He said he expects more suppliers of autonomous vehicle parts to emerge in coming years.
"Tesla is going to do quite a bit of development itself," he said. He didn't mention any development partners by name.
Mr. Musk said "machine vision," or the ability for a computer to quickly recognize objects, is the biggest technological impediment to fully implementing the technology.
Determining what an entire object might be when only a piece of it is visible by camera or radar is a key issue for the technology to determine the correct course of action for a vehicle. "It's kind of scary: what's going to become of us humans," he joked.
In addition to his forecast about autonomous vehicles, he said his company expects to start generating strong "free cash flow beginning in the third quarter of 2015" and could pay for the construction of its planned battery factory without additional borrowing. Tesla raised $2.3 billion earlier this year through a convertible bond offering.
Tesla plans to build advanced batteries at a so-called gigafactory that could cost up to $5 billion, along with partner Panasonic Corp., in an industrial park 15 miles east of Reno, Nev.
Much of the free cash flow should come next year as Tesla ramps up production of its Model X sport utility vehicle, which is expected to begin deliveries early next year. Mr. Musk has told Fox Business that he expected to sell 15,000 next year or 20,000 if "things go especially well."
Mr. Musk also said demand for the company's current, $71,000 and up Model S isn't a problem. "We have a waiting list, but not intentionally."
He also said the company needed to build more service centers before it ramps up sales further.
Tesla isn't working on vehicles beyond the Model X and a planned lower-cost sedan called the Model 3, but he said that "significant" product news is in the works.
When asked how the broader auto industry is progressing on developing a market for electric vehicles, he said "we're behind."
"The big car companies have been a lot slower than I thought," he said.
Credit: By Mike Ramsey
Subject: Automobile industry; Electric vehicles; Cash flow; Research & development--R & D
Location: Palo Alto California
Company / organization: Name: Panasonic Corp; NAICS: 335222, 335224, 333415; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Sep 17, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: Engl ish
Document type: News
ProQuest document ID: 1562520195
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1562520195?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Tesla: Safer Cars Just Ahead
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 Sep 2014: B.2.
ProQuest document link
Abstract:
In addition to his forecast about autonomous vehicles, he said his company expects to start generating strong "free cash flow beginning in the third quarter of 2015" and could pay for the construction of its planned battery factory without additional borrowing.
Full text: Tesla Motors Inc. Chief Executive Officer Elon Musk said the technology to make a fully autonomous car will be ready in five or six years, and the result will be vehicles far less likely to harm occupants and others on the road.
"They will be a factor of 10 safer than a person [at the wheel] in a six-year time frame," Mr. Musk said in an interview with The Wall Street Journal. Once the technology is available, it likely would take several more years, however, to work out the regulatory impediments, he said.
Palo Alto, Calif.-based Tesla is working on its own autonomous driving technology for its electric vehicles in addition to talking with auto suppliers. He said he expects more suppliers of autonomous vehicle parts to emerge in coming years.
"Tesla is going to do quite a bit of development itself," he said. He didn't mention any development partners by name.
Mr. Musk said "machine vision," or the ability for a computer to quickly recognize objects, is the biggest technological impediment to fully implementing the technology.
Determining what an entire object might be when only a piece of it is visible by camera or radar is a key issue for the technology to determine the correct course of action for a vehicle. "It's kind of scary: what's going to become of us humans," he joked.
In addition to his forecast about autonomous vehicles, he said his company expects to start generating strong "free cash flow beginning in the third quarter of 2015" and could pay for the construction of its planned battery factory without additional borrowing. Tesla raised $2.3 billion earlier this year through a convertible bond offering.
Tesla plans to build advanced batteries at a so-called gigafactory that could cost up to $5 billion, along with partner Panasonic Corp., in an industrial park 15 miles east of Reno, Nev.
Much of the free cash flow should come next year as Tesla ramps up production of its Model X sport utility vehicle, which is expected to begin deliveries early next year. Mr. Musk has told Fox Business that he expected to sell 15,000 next year or 20,000 if "things go especially well."
Mr. Musk also said demand for the company's current, $71,000 and up Model S isn't a problem. "We have a waiting list, but not intentionally."
He also said the company needed to build more service centers before it ramps up sales further.
Tesla isn't working on vehicles beyond the Model X and a planned lower-cost sedan called the Model 3, but he said that "significant" product news is in the works.
When asked how the broader auto industry is progressing on developing a market for electric vehicles, he said "we're behind."
"The big car companies have been a lot slower than I thought," he said.
Credit: By Mike Ramsey
Subject: Automobile industry; Cash flow; Research & development--R & D; Automobile safety; Design; Electric vehicles
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry; 5400: Research & development
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2014
Publication date: Sep 18, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1562595780
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1562595780?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distri bution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
The Musk Family Plan for Transforming the World's Energy; As Cousins and Business Partners, Tesla's Elon Musk and SolarCity's Lyndon Rive Have a Grand Plan for Power Storage
Author: Mims, Christopher
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Sep 2014: n/a.
ProQuest document link
Abstract:
Thanks to the economies of scale that will come from Tesla's gigafactory, within 10 years every solar system that SolarCity sells will come with a battery-storage system, says Mr. Rive, and it will still produce energy cheaper than what is available from the local utility company.
Full text: Elon Musk and his cousin, Lyndon Rive, have always been close. Their mothers are twins, and Messrs. Musk and Rive grew up together.
"We've known each other for as long as we've been conscious," said Mr. Musk, speaking at a panel this week at a private conference in New York.
There is an obvious, almost brotherly affection between the two men. Mr. Musk says Mr. Rive "is an awesome guy and really hardworking and driven, and you can trust him with anything." Mr. Rive recounts the drive to Burning Man in 2004 when Mr. Musk told him his next venture should be in solar power--and Mr. Rive says that when Mr. Musk tells you what area to get into next, you get into it.
Their closeness continues, and if Messrs. Musk and Rive can achieve their shared vision, the result will be a transformation of the world's, or at least America's, energy infrastructure. The companies the two men run--Tesla Motors Inc. and solar energy system provider SolarCity Corp.--are uniquely compatible.
It isn't just a product of the affiliation of their founders, but is also a consequence of Mr. Musk sitting on the board of SolarCity and being its largest individual shareholder.
Mr. Musk's Tesla makes cars, but it also--in the not too distant future--will make batteries. Lots of them. Tesla is building a $5 billion "gigafactory" in Nevada for batteries. A factory so large that it will, says Mr. Musk, be larger than the whole of Earth's current capacity for manufacturing lithium-ion batteries. Most such batteries currently go into phones, tablets, laptops and other mobile devices.
At the conference Wednesday, Mr. Musk disclosed that a portion of the gigafactory's capacity will be set aside for building "grid-scale storage."
In other words, Tesla is going to continue its tradition of manufacturing battery packs for SolarCity, only on a much grander scale.
Up to now, SolarCity has sold Tesla-built battery packs to a handful of corporate and residential customers. The rationale is simple: The sun doesn't always shine, so the best way to manage solar power on-site is to save it up for cloudy days and overnight.
SolarCity's revenue has been growing 100% a year since its founding in 2006, and Mr. Rive, the company's CEO, says his goal is to maintain that pace for as long as possible. To that end, SolarCity announced in June the acquisition of Silevo, a Silicon Valley-based maker of solar panels that Mr. Rive insists is capable of producing at scale the most efficient solar panels on the market.
Mr. Musk said that while his gigafactory won't exclusively sell grid-storage batteries to SolarCity, conversations with the company are "our best feedback as to deciding what the product would look like."
Mr. Musk went even further, describing "the product" as a bank of batteries that "looks good," is about 4-inches thick and can be mounted on the wall of the garage in a home.
Thanks to the economies of scale that will come from Tesla's gigafactory, within 10 years every solar system that SolarCity sells will come with a battery-storage system, says Mr. Rive, and it will still produce energy cheaper than what is available from the local utility company.
Mr. Musk also noted that in any future in which a country switches fully to electric cars, its electricity consumption will roughly double. That could either mean more utilities, and more transmission lines, or a rollout of solar--exactly the sort that SolarCity hopes for.
America's solar energy generating capacity has grown at around 40% a year, says Mr. Rive. "So if you just do the math, at 40% growth in 10 years time that's 170 gigawatts a year," says Mr. Rive. That's equivalent to the electricity consumption of about 5 million homes, which is still "not that much," he says, when compared with overall demand for electricity. "It's almost an infinite market in our lifetimes."
There are almost innumerable barriers to the realization of Messrs. Musk and Rive's plan. For Tesla, there is the possibility that a superior battery technology could come to market soon after Tesla and its partner, Panasonic Corp., build their gigafactory, rendering their $5 billion investment obsolete.
And SolarCity has almost the exact same problem with its ambition to build its own solar panels. While Mr. Rive says that Silevo's technology is "next generation" and can compete with the cheap panels that China has been exporting to the rest of the world, the oughts are littered with the carcasses of U.S. solar panel manufacturers who claimed they could do the same, including Solyndra Inc.
And while this is a threat to shareholders rather than his aims, there is also the risk that Mr. Musk will find other, more efficient routes to reaching his stated goals, which include moving the world onto electric transport and solar power generation as quickly as possible.
For example, when asked whether or not the U.S. should erect trade barriers designed to protect American solar-panel manufacturers, Mr. Musk said: "If the Chinese government wants to subsidize the rollout of solar power in America, OK, it is kind of like 'thank you' is what we should be saying." And in a subsequent interview at The Wall Street Journal's offices in New York, Mr. Musk emphasized that "the reason I created Tesla was to accelerate the transition to sustainable transport. And I made that clear to investors."
Despite the dumping of solar panels by China representing a substantial threat to SolarCity's $750 million bet on Silevo--which includes a $350 million acquisition cost and an estimated $400 million to build a solar panel manufacturing plant in Buffalo, N.Y.--Mr. Rive agrees with Mr. Musk that there should be no barriers to trade in solar panels.
"Any extra tax on solar is just bad," says Mr. Rive. "We have a big problem to solve--let's solve that problem." That "big problem" is climate change. And Mr. Rive has been no less public than Mr. Musk about the purpose of his company being more than turning a profit.
It's one more thing their companies--and the two men--have in common.
Follow Christopher Mims on Twitter
Credit: By Christopher Mims
Subject: Solar energy; Electric utilities
Location: United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Sep 18, 2014
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1562691104
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1562691104?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Motors Releases New Software Suite for Model S; Midcycle Upgrade, Nearly Unique Among Car Makers, to Help Drivers Better Navigate Traffic, Nickname Car
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Sep 2014: n/a.
ProQuest document link
Abstract:
Other car makers, such as Ford Motor Co., have introduced upgrades to their computer systems to improve performance or redesign the user interface, but the level of changes and added features is unique to Tesla and shows how the Silicon Valley-based company looks at the ownership experience differently.
Full text: Tesla Motors Inc. released a suite of software changes Friday to its electric Model S designed to help the driver dodge traffic, extend range and give the car a nickname.
The changes include the capability to turn on the car with a mobile phone, a key feature as the car has no on or off switch and operates by detecting the key fob only.
Tesla's upgrades are nearly unique among car makers, which generally add new options and features on new models.
The Model S traffic-navigation system, featured on Tesla's 17-inch display, also gets several upgrades, including a traffic-based alert system. Already, the car uses traffic data that can show congestion from Google Inc.'s Google Maps, but the new system will provide more up-to-date traffic and show alternate routes. The system also will now sync to a person's mobile phone calendar to automatically route people to appointments.
The car, which can adjust its ride height to accommodate changes in terrain that could cause scraping, will automatically adjust its suspension when it detects a route where the driver has adjusted the suspension previously.
The upgrade also will put the car into its special power-saving mode overnight to prevent idle energy loss.
All the upgrades will be made over the air through the car's embedded Wi-Fi system that comes in every Model S.
The features themselves are rare in other vehicles, but, beyond that, Tesla's decision to push them out in the middle of a product cycle shows how it views its products more as an upgradeable computer than a standard car.
Other car makers, such as Ford Motor Co., have introduced upgrades to their computer systems to improve performance or redesign the user interface, but the level of changes and added features is unique to Tesla and shows how the Silicon Valley-based company looks at the ownership experience differently.
Credit: By Mike Ramsey
Subject: Automobile industry; Cellular telephones; Traffic congestion
Company / organization: Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Google Inc; NAICS: 519130; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Sep 19, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1563277416
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1563277416?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla's China Challenge: Getting Chargers Installed; Tesla Has Big China Ambitions but First Must Win Over Charger Skeptics
Author: Murphy, Colum
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Sep 2014: n/a.
ProQuest document link
Abstract:
Part technician and part diplomat, he deals with anxious garage workers, puzzled security guards and dubious building managers while laying the groundwork for the luxury car maker in China. Nissan Motor Co. this month released its first electric car here.
Full text: BEIJING--Tesla Motors Inc. has big ambitions for selling its electric cars in China. But first, it has to get its chargers accepted by skeptics, such as the property manager at the Tonghui Riverside residential complex.
That delicate task falls to Huang Weiguo, who leads a team of Tesla contractors who install charging stations at the homes of new Tesla owners in Beijing. Part technician and part diplomat, he deals with anxious garage workers, puzzled security guards and dubious building managers while laying the groundwork for the luxury car maker in China.
On a recent summer day, his charm was failing him. The mission was to install a charger for a new customer outside a teahouse at the white-facade commercial and residential complex. But three hours into the process the property manager showed up, and he proved to be bullheaded. "Remove it," he said.
Mr. Huang explained the tea shop's owner had just bought a Tesla and had authorized installation of the six-foot-tall charging station and its tangle of cables. He offered the sweating manager a cold bottle of water.
The manager wasn't persuaded. "It's our call to decide what gets installed around here," he said.
Mr. Huang was philosophical. "We have to be patient and calm down," he said, preparing to leave the job unfinished while pondering his next steps.
China presents unique challenges for Tesla and other electric-car makers. Its people tend to live in apartment buildings rather than the single-family homes commonly found in the U.S. Low-rise multifamily housing makes up 74% of all urban housing in China, according to a 2007 estimate by consulting firm Chreod Ltd.
That means the family garage is a rarity in China. People instead tend to park in shared garage complexes or on the street. That complicates setting up the home charger that is essential to keeping a Tesla running. Occasionally, it also makes wary neighbors and property managers hurdles to ownership.
The process in China is "really very hard," said Shawn Gao, who is responsible for overseeing installations for Tesla across the country. "The technical part is not the big issue. Getting approval from property-management companies is."
Jacky Tan, a Shanghai engineer, took delivery of his new Tesla Model S in June. But it spends little time in the parking spot he bought for it at his apartment complex. The complex's property-management company objected first; then residents expressed worry that the chargers would cause power surges or affect their power bills.
"No matter how hard Tesla and I explained to the neighbors that it won't affect their life, the committee refused to give us the green light," Mr. Tan said. Tesla later installed the charging station at Mr. Tan's workplace instead, an arrangement that he says is unsatisfactory.
Chargers are a chicken-and-egg problem for electric-car makers. Without one, there can't be the other. And sales of electric vehicles so far in China have been disappointing, totaling 70,000, including buses, well short of Tesla's goal of half a million by 2015, according to Stephen Dyer, a partner in the Shanghai office of consultancy A.T. Kearney. "China is still way off target," he said.
Electric car makers are only now trying to address the problem here.
BMW AG recently launched its pure electric BMW i3 and plug-in hybrid BMW i8 in China, and it has teamed up with local partners to install 50 charging stations in Shanghai. BYD Co. and Daimler AG will work with Switzerland-based ABB Ltd. to supply wall-mounted chargers to buyers of their jointly made Denza electric cars. Nissan Motor Co. this month released its first electric car here.
Tesla has tried to forestall the problem of buyers ending up with cars with no power. It said earlier this year it wouldn't deliver cars unless local charging stations were available, frustrating some early buyers. One owner, irate at the delay, smashed the windshield of his Tesla when it was delivered and posted a picture online. In June, another wealthy Tesla enthusiast built his own network of charging stations so that he could drive to Guangzhou, some 1,300 miles from Beijing.
In August, the Palo Alto, Calif., company signed a deal with telecommunications provider China Unicom to build together 20 superchargers and 400 charging posts in 120 cities to speed up the process. It also has tie-ups with property developers such as Soho China Ltd. to install charging stations in developments. Other partnerships are in the works.
A widespread network of public chargers is important because Tesla sees China as its biggest international market within three years, eventually overtaking even the U.S., said Veronica Wu, its China chief.
It hopes to install a network in China of 100 superchargers, which charge cars faster than regular chargers, and to have 20 sales outlets by the end of next year.
An August survey of 200 potential car buyers throughout China by consultant A.T. Kearney found that concern over the lack of charging stations was the biggest reason stopping people from buying electric cars.
Tesla's Mr. Gao said his installation teams are successful nine out of 10 times. But each faces challenges they might not see in the U.S. Building management and residents' associations often worry that charging a Tesla could put too much strain on a building's power supply, which can sometimes be unstable in China. In addition, installation can often involve getting approval from one of China's state-controlled electricity providers, a process that had little precedent until this year.
Tesla points to progress on several issues. Recent regulations in Beijing now require that about 20% of parking lots attached to new buildings be capable of housing charging units. A recent policy paper from China's State Council was dedicated to infrastructure issues.
"It's definitely getting better," said Ms. Wu, Tesla's China chief.
Mr. Huang, the Tesla contractor, said the troubles at Tonghui were unprecedented in his experience. "This is the first time we were shut down in the middle of the process," he said, adding that breakdowns in communication between his team and the property managers are frequent. "Sometimes they refuse to talk to us and they don't give a reason," he said.
But Mr. Huang said he is used to such a reaction, adding that typical Beijing property managers can't be swayed by flattery or dining invitations. "It's our job to come up with counterproposals," he said. "I serve people, serve our clients."
As of mid-September the dispute over the charging installation at Tonghui Riverside hadn't been resolved. A manager at the property who gave his surname as Song said that the installation needed approval from local officials and "if only one or two cars need this charger, we don't really see the need."
Rose Yu in Shanghai and Lilian Lin in Beijing contributed to this article.
Credit: By Colum Murphy
Subject: Electric vehicles; Automobile industry
Location: China
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Sep 28, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1566046914
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1566046914?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Lack of Juice Hurts Tesla in China --- Electric-Car Maker Struggles to Get Property Managers to Allow Installation of Charging Stations
Author: Murphy, Colum
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Sep 2014: B.3.
ProQuest document link
Abstract:
Part technician and part diplomat, he deals with anxious garage workers, puzzled security guards and dubious building managers while laying the groundwork for the luxury car maker in China. Nissan Motor Co. this month released its first electric car here.
Full text: BEIJING -- Tesla Motors Inc. has big ambitions for selling its electric cars in China. But first, it has to get its chargers accepted by skeptics, such as the property manager at the Tonghui Riverside residential complex.
That delicate task falls to Huang Weiguo, who leads a team of Tesla contractors who install charging stations at the homes of new Tesla owners in Beijing. Part technician and part diplomat, he deals with anxious garage workers, puzzled security guards and dubious building managers while laying the groundwork for the luxury car maker in China.
On a recent summer day, his charm was failing him. The mission was to install a charger for a new customer outside a teahouse at the white-facade commercial and residential complex. But three hours into the process the property manager showed up, and he proved to be bullheaded. "Remove it," he said.
Mr. Huang explained the tea shop's owner had just bought a Tesla and had authorized installation of the six-foot-tall charging station and its tangle of cables. He offered the sweating manager a cold bottle of water.
The manager wasn't persuaded. "It's our call to decide what gets installed around here," he said.
Mr. Huang was philosophical. "We have to be patient and calm down," he said, preparing to leave the job unfinished while pondering his next steps.
China presents unique challenges for Tesla and other electric-car makers. Its people tend to live in apartment buildings rather than the single-family homes commonly found in the U.S. Low-rise multifamily housing makes up 74% of all urban housing in China, according to a 2007 estimate by consulting firm Chreod Ltd.
That means the family garage is a rarity in China. People instead tend to park in shared garage complexes or on the street. That complicates setting up the home charger that is essential to keeping a Tesla running. Occasionally, it also makes wary neighbors and property managers hurdles to ownership.
The process in China is "really very hard," said Shawn Gao, who is responsible for overseeing installations for Tesla across the country. "The technical part is not the big issue. Getting approval from property-management companies is."
Jacky Tan, a Shanghai engineer, took delivery of his new Tesla Model S in June. But it spends little time in the parking spot he bought for it at his apartment complex. The complex's property-management company objected first; then residents expressed worry that the chargers would cause power surges or affect their power bills.
"No matter how hard Tesla and I explained to the neighbors that it won't affect their life, the committee refused to give us the green light," Mr. Tan said. Tesla later installed the charging station at Mr. Tan's workplace instead, an arrangement that he says is unsatisfactory.
Chargers are a chicken-and-egg problem for electric-car makers. Without one, there can't be the other. And sales of electric vehicles so far in China have been disappointing, totaling 70,000, including buses, well short of Tesla's goal of half a million by 2015, according to Stephen Dyer, a partner in the Shanghai office of consultancy A.T. Kearney. "China is still way off target," he said.
Electric car makers are only now trying to address the problem here.
BMW AG recently launched its pure electric BMW i3 and plug-in hybrid BMW i8 in China, and it has teamed up with local partners to install 50 charging stations in Shanghai. BYD Co. and Daimler AG will work with Switzerland-based ABB Ltd. to supply wall-mounted chargers to buyers of their jointly made Denza electric cars. Nissan Motor Co. this month released its first electric car here.
Tesla has tried to forestall the problem of buyers ending up with cars with no power. It said earlier this year it wouldn't deliver cars unless local charging stations were available, frustrating some early buyers. One owner, irate at the delay, smashed the windshield of his Tesla when it was delivered and posted a picture online. In June, another wealthy Tesla enthusiast built his own network of charging stations so that he could drive to Guangzhou, some 1,300 miles from Beijing.
In August, the Palo Alto, Calif., company signed a deal with telecommunications provider China Unicom to build together 20 superchargers and 400 charging posts in 120 cities to speed up the process. It also has tie-ups with property developers such as Soho China Ltd. to install charging stations in developments. Other partnerships are in the works.
A widespread network of public chargers is important because Tesla sees China as its biggest international market within three years, eventually overtaking even the U.S., said Veronica Wu, its China chief.
It hopes to install a network in China of 100 superchargers, which charge cars faster than regular chargers, and to have 20 sales outlets by the end of next year.
An August survey of 200 potential car buyers throughout China by consultant A.T. Kearney found that concern over the lack of charging stations was the biggest reason stopping people from buying electric cars.
Tesla's Mr. Gao said his installation teams are successful nine out of 10 times. But installation can often involve getting approval from one of China's state-controlled electricity providers, a process that had little precedent until this year.
Tesla points to progress on several issues. Recent regulations in Beijing now require that about 20% of parking lots attached to new buildings be capable of housing charging units. A recent policy paper from China's State Council was dedicated to infrastructure issues.
"It's definitely getting better," said Ms. Wu, Tesla's China chief.
As of mid-September the dispute over the charging installation at Tonghui Riverside hadn't been resolved. A manager at the property who gave his surname as Song said that the installation needed approval from local officials and "if only one or two cars need this charger, we don't really see the need."
---
Rose Yu in Shanghai and Lilian Lin in Beijing contributed to this article.
Credit: By Colum Murphy
Subject: Electric vehicles; Automobile industry; Foreign operations of US corporations
Location: China
People: Huang Weiguo Gao, Shawn
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 1300: International trade & foreign investment; 8340: Electric, water & gas utilities; 8680: Transportation equipment industry; 9179: Asia & the Pacific; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2014
Publication date: Sep 29, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1566074176
Document URL: https: //login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1566074176?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla's Musk Tweets About Mysterious 'D'; Hints of New Model S Version Send Shares Higher
Author: Ramsey, Mike; Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Oct 2014: n/a.
ProQuest document link
Abstract:
On Wednesday, Chief Executive Elon Musk posted a pair of tweets suggesting the auto maker soon would hold a product announcement.
Full text: Tesla Motors Inc. is holding a product event next week that likely would involve an announcement of an all-wheel-drive version of its Model S luxury electric sedan.
The Palo Alto, Calif., electric car maker confirmed it would hold an event in Hawthorne, Calif., on Thursday, but declined to reveal other details. In the past, it has said it would provide an all-wheel-drive version of the $71,000 and up sedan.
Tesla shares were up nearly 4% in recent trading to $249.40.
On Wednesday, Chief Executive Elon Musk posted a pair of tweets suggesting the auto maker soon would hold a product announcement. In the first of two tweets, sent from a Twitter account known to belong to Mr. Musk, the entrepreneur said "about time to unveil the D and something else." He attached a picture of a garage door opened just enough to see the front grille of a Model S with the date Oct. 9, 2014.
Hours later, responding to a stream of speculation on what "the D" might be, Mr. Musk said he loves the Internet, the comments made him laugh and he is "glad I didn't mention the other letter."
In an interview with The Wall Street Journal last month, Mr. Musk said the company soon would make "significant" product news that didn't involve a new vehicle.
All-wheel drive is an important feature for cold-weather climates. Luxury car brand Jaguar didn't offer it on its models until a few years ago and executives felt it limited sales in snowy regions.
In the past, Mr. Musk has referred all-wheel-drive technology as a "dual motor" system. A single electric motor powers the current version of the Model S. The other letter not mentioned in Mr. Musk's tweet could be "m."
Tesla has used letters to differentiate its vehicle names. The Model S electric sedan is currently for sale, and the Model X is set for launch in the near future. A cheaper entry-level car, the Model 3, is also in the pipeline.
Mr. Musk has made it a practice to make announcements via Twitter. This particular set of comments come during the Paris auto show media days, when many auto executives are making commitments on future technology, including electrification.
Credit: By Mike Ramsey And John D. Stoll
Subject: Automobile industry; Product introduction
Location: Palo Alto California
Company / organization: Name: Twitter Inc; NAICS: 519130; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Oct 2, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1566801431
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1566801431?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Panasonic Sets Up Company to Make Batteries for Tesla Cars; Japanese Company's U.S. Affiliate Will Be Based at Tesla's Planned Nevada 'Gigafactory'
Author: Mochizuki, Takashi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Oct 2014: n/a.
ProQuest document link
Abstract:
The factory would allow the companies to reduce the costs of the battery packs used in Tesla's electric cars and "enable Tesla to meet its goal of advancing mass market electric vehicles," Panasonic said in a statement.
Full text: TOKYO--Panasonic Corp. said on Friday it has established a new company in the U.S. dedicated to producing lithium-ion batteries for Tesla Motors Inc.'s electric cars.
The U.S. company, Panasonic Energy Corp. of North America, will be based at the factory that Tesla plans to build in Sparks, Nev.
The factory would allow the companies to reduce the costs of the battery packs used in Tesla's electric cars and "enable Tesla to meet its goal of advancing mass market electric vehicles," Panasonic said in a statement.
The U.S. affiliate was established Wednesday with capital of $5 million, Panasonic said. The Osaka-based company hasn't said how much it plans to invest overall in the project that Tesla Chief Executive Elon Musk has called the "gigafactory."
Mr. Musk has said the factory would cost about $5 billion, half of which would be provided by his company. In a July call with investors, Mr. Musk said he expected Panasonic to contribute between 30% and 40% of the total cost of the factory.
Credit: By Takashi Mochizuki
Subject: Electric vehicles
Location: United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Oct 3, 2014
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1567027756
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1567027756?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla VP Communications Simon Sproule to Leave for Aston Martin; Sproule Will Rejoin Former NissanColleague Andy Palmer, Now CEO of Aston Martin
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Oct 2014: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc.'s vice president of communications plans to leave the company and join Aston Martin, the luxury sports car maker, where he will join former colleague Andy Palmer, who took over as chief executive recently, a person familiar with the matter said.
Full text: Tesla Motors Inc.'s vice president of communications plans to leave the company and join Aston Martin, the luxury sports car maker, where he will join former colleague Andy Palmer, who took over as chief executive recently, a person familiar with the matter said.
Mr. Sproule, who joined Tesla in March, had been Nissan Motor Co.'s top communicator. A respected industry veteran, Mr. Sproule's addition to Tesla was considered a coup for the Silicon Valley startup, which had gone nearly two years without a director of the public relations department.
Tesla declined to comment about the departure. Mr. Sproule couldn't be reached for comment.
Mr. Sproule, who is British, will rejoin Mr. Palmer, another Brit, who took over as CEO of Aston Martin in September. Both had been working together at Nissan for a decade.
Before Mr. Sproule joined the company, Chief Executive Officer Elon Musk handled much of the company's external communications himself, posting announcements on Twitter and writing blog posts.
Before Mr. Sproule, the last director of public relations was Ricardo Reyes, who left in 2012.
Credit: By Mike Ramsey
Subject: Chief executive officers; Automobile industry; Public relations
People: Palmer, Andy Musk, Elon
Company / organization: Name: Aston Martin Lagonda Ltd; NAICS: 336111; Name: Nissan Motor Co Ltd; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Oct 6, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1588683406
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1588683406?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Panasonic Plans Big Investment in Tesla Battery Plant; Panasonic to Invest Tens of Billions of Yen as First Installment
Author: Mochizuki, Takashi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Oct 2014: n/a.
ProQuest document link
Abstract: None available.
Full text: CHIBA, Japan--Panasonic Corp. will invest tens of billions of yen as a first installment in a Tesla Motors Inc.'s lithium-ion battery factory, the chief executive of the Japanese electronics company said Tuesday.
"Our initial investment amount in the factory will be tens of billions of yen," Chief Executive Kazuhiro Tsuga told reporters at the annual CEATEC trade show in Chiba, near Tokyo. "We will expand the size as we go by pouring in further installments of similar amounts."
The Osaka-based firm said last week it had formed a company in the U.S. to produce batteries for Tesla's electric car "gigafactory" in Nevada
"Our policy is to avoid a situation where Tesla wants to make more cars but doesn't have enough batteries," Mr. Tsuga said.
In a call with investors in July, Tesla founder Elon Musk said he expected Panasonic to contribute 30%- 40% of the battery factory's total cost, likely to reach $5 billion. Tesla will cover about half the amount.
Turning his attention to foreign-exchange rates, Mr. Tsuga said separately that his company would find it desirable for rates to remain stable, and that the dollar rising as high as ¥120 would be "excessive."
The dollar was trading around ¥109.12 early afternoon in Asia.
Credit: By Takashi Mochizuki
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Oct 7, 2014
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1597703837
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1597703837?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
A Dented Toyota Was Tesla's Gain; How the Japanese car maker came to sell a factory to Elon Musk at a knockdown price.
Author: Jenkins, Holman W; Jr.
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Oct 2014: n/a.
ProQuest document link
Abstract: None available.
Full text: The Toyota sudden-acceleration furor of 2010 was one of those colossal American dishonesties for which a reckoning never comes. No electronic bug was ever found (as government researchers attested). Among the many untold aspects is the Tesla connection.
"If I don't do it, somebody else will," might be the personal theme song of Elon Musk, building his industrial empire partly on taxpayer subsidies. In just the past few weeks, he received commitments totaling $2 billion from Nevada and New York for his battery and solar-panel businesses. And legendary are the handouts, state and federal, to his electric-car business, only the latest (that we know of) being California State Treasurer Bill Lockyer's grant of $34.7 million in fresh tax breaks in December.
A little history: Back in 2007, Mr. Musk struck a deal with New Mexico to build his first Tesla factory, then reneged when California, largely in the person of Mr. Lockyer, offered a better deal. But where in California to build the plant? This is where the story gets ugly--and cautionary, as even Mr. Musk might appreciate.
On Aug. 27, 2009, Toyota rejected increasingly strident overtures from state politicians to keep open a perennially profitless joint Toyota-GM plant in Fremont, known as Nummi, for New United Motor Manufacturing, Inc., which happened to be in Mr. Lockyer's former state senate district and which GM was abandoning as part of its Obama-engineered bankruptcy.
California politicians convinced themselves it was Toyota's obligation to keep subsidizing Nummi and its UAW workers. Toyota waved off millions in dangled "incentives." It resisted legislators who listed every real and imagined benefit Toyota had received from taxpayers over the years, including carpool lane privileges for Prius drivers and the cash-for-clunkers federal handout.
It resisted the unfailing voice of liberal outrage, Bob Herbert of the New York Times, who scolded that "Toyota is paying the state back with the foulest form of ingratitude."
Then, one day after Toyota's announcement, came the fiery crash of a San Diego dealer's loaner Lexus, which killed four people and became a cable television cause célèbre.
A floor mat improperly fitted by the dealer (who had been warned by a previous driver) was soon fingered. That didn't stop Democratic Rep. Henry Waxman--whose district closely neighbors Toyota's U.S. headquarters--from holding a televised House hearing to flog the sensational claim that an unseen electronic bug might cause millions of Toyotas to run out of control.
Mr. Lockyer the very next day convened his own ad hoc "blue ribbon" commission to berate Toyota about Nummi. Mr. Lockyer's panel would shortly dispatch a delegation, including actor Danny Glover, to Japan to demand that Toyota keep open the plant to "produce a leading green vehicle associating the model with the progressive environmental image of the state."
In case the company didn't get the message, California Rep. Jerry McNerney spelled it out to Toyota U.S. chief Jim Lentz at the Waxman hearing:
"Mr. Lentz, Toyota is currently experiencing major public relations problems and the public concern about safety failures is going to hurt your bottom line. California is one of your biggest markets, and it's obvious that keeping Nummi open will help rebuild your image. Wouldn't that be beneficial to Toyota?"
The Tesla-related sums would prove a rounding error in the total cost of the unintended acceleration fracas to Toyota, which has run to many billions, but Toyota got the message. Several weeks later it announced a deal to transfer the giant Nummi complex to Tesla at a knockdown price. It also agreed to invest $50 million in Tesla's forthcoming IPO and spend $160 million to buy Tesla components for a hastily designed Toyota electric SUV that would be sold exclusively in California for about half what it cost to build.
This deal may well have assured the success of Tesla's IPO a few weeks later.
To its credit, the Los Angeles Times would level with its readers about Nummi, citing an industry consultant to the effect that "California just isn't competitive in manufacturing with its taxes, regulations and overall cost of doing business."
Perhaps the moral is obvious but dishing out handouts to favored businesses like Tesla at the expense of the state's other taxpaying workers and employers is hardly a solution to California's problems. And such Mommie Dearest love brings its own Faustian risk: The favored business can find itself, as Toyota did, under pressure permanently to subsidize a money-losing plant as a "success" politicians can point to even as their policies ensure that real success eludes other businesses in the state.
By the way, the most lavish of Toyota bashers was state Sen. Ted Lieu, who likened the company to Lincoln assassin John Wilkes Booth. Mr. Lieu is likely to become Mr. Waxman's replacement when the 40-year veteran retires after next month's election.
Correction
An earlier version mistakenly said Toyota's Nummi plant was in Rep. Henry Waxman's district.
Credit: By Holman W. Jenkins, Jr.
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Oct 7, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 16089940 58
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1608994058?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Fights Michigan Legislation on Direct-Selling, Servicing; Car Maker Has Gone Against Industry Model of Franchises
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Oct 2014: n/a.
ProQuest document link
Abstract:
ANN ARBOR, Mich.--Tesla Motors Inc. is fighting legislation in Michigan that would prevent the electric-car maker from direct selling or servicing its vehicles in the state, the latest in a long line of battles the company has faced related to its distribution model.
Full text: ANN ARBOR, Mich.--Tesla Motors Inc. is fighting legislation in Michigan that would prevent the electric-car maker from direct selling or servicing its vehicles in the state, the latest in a long line of battles the company has faced related to its distribution model.
The Silicon Valley-based auto maker has gone against industry standards, looking to sell direct to customers rather than use franchises. In most states, franchise laws protect dealers from manufacturers setting up company-owned retail networks.
Tesla has run into conflict with these rules in several states. Michigan, the spiritual home of America's auto industry, is the latest to pursue legislation potentially slowing Tesla's plan.
In an interview Thursday, Tesla's regulatory chief, James Chen, said he met with leaders in Lansing to try and stop the progress of the legislative push. "We are playing a game of whack-a-mole in every state," he said.
Both chambers of Michigan's legislature last week passed bills that Tesla sees as unfair to their model. Mr. Chen said Tesla wouldn't even be able to have a gallery featuring its cars, a restriction that goes beyond measures taken in other states.
Credit: By Mike Ramsey
Subject: Automobile industry; Research & development--R & D
Location: United States--US Michigan
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Oct 9, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1609383643
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1609383643?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Stree t Journal
Tesla Unveils All-Wheel-Drive, Autopilot for Electric Cars; Luxury Auto Maker Joins Mercedes-Benz, Audi in Autonomous Drive Push
Author: Pasztor, Andy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Oct 2014: n/a.
ProQuest document link
Abstract:
Other auto brands including Mercedes-Benz, Acura and Audi have added new features that put the vehicle in control for short periods and the auto industry is shifting toward using these technologies to augment highway driving and parking.
Full text: HAWTHORNE, Calif.--Tesla Motors Inc. unveiled an all-wheel-drive version of its Model S luxury electric car and an automated driving system designed to prevent accidents and even allow vehicles to park themselves.
The new autopilot features rely on a combination of radar, sonar and cameras that are able to recognize stop signs, pedestrians and highway barriers. Tesla Chief Executive Elon Musk said the self-driving features are already being installed in current production vehicles.
Tesla would begin delivering in December its top-of-the-line model equipped with twin electric engines, one for front-wheel drive and another for the rear wheels. Such all-wheel-drive configurations allow for better road handling, improves efficiency and boosts power and acceleration. Other models with all-wheel-drive will follow next year.
Amid cheers from Tesla owners on hand at Thursday's unveiling, Mr. Musk said the dual-engine system takes slightly more than three seconds to go from a standing start to 60 miles an hour. The dual motor version of the Model S P85 would cost about $120,000 and be an about $14,600 option for other vehicles.
He also said the new autonomous driving feature will create "a protective cocoon around the vehicle" aimed at warning of impending collisions. The goal, he said, is for a driver to "step out of the car and have it park itself in your garage." A technology package with autopilot adds about $4,250 to the price of a Model S.
The product announcements came at a glitzy event here next to the company's design studio, attended by nearly 3,000 Tesla owners, members of the media and other guests.
The automated driving features won't make Tesla's models fully autonomous, but Mr. Musk said the company was able to "bring it to market faster" than it had previously expected.
Drivers will get visual and sound warnings of an impending crash, and the car's computers will attempt to take evasive action. Drivers will still be able to overcome the automated maneuvers.
Other auto brands including Mercedes-Benz, Acura and Audi have added new features that put the vehicle in control for short periods and the auto industry is shifting toward using these technologies to augment highway driving and parking.
Tesla's system employs forward-looking radar to "see through" snow, fog, sand and other conditions that restrict the view of drivers. In addition, Mr. Musk said "long-range ultrasonic sonar" can detect "a small child or even a dog" in danger of being struck by the car.
Underscoring Tesla's brand and environmental credentials, the company did something that few auto companies would probably contemplate. Attendees at the event were allowed to examine and order from a new line of Tesla handbags, cellphone covers and other items that sported the Tesla logo and are made from excess leather recycled from its Northern California assembly plant.
Credit: By Andy Pasztor
Subject: Automobile industry; Automation; Vehicles; Research & development--R & D
Location: Northern California
Company / organization: Name: Daimler AG; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Oct 10, 2014
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest documentID: 1609436181
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1609436181?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Overheard: Tesla Backfire
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Oct 2014: n/a.
ProQuest document link
Abstract:
James J. Albertine, an analyst at Stifel with a $400 price target on Tesla, put it like this: "We believe TSLA managers and engineers are very smart in their own right, but stylistically, we would leave the tweeting to tech companies with sub-$1k product price points."
Full text: Elon Musk gave Tesla Motors investors a "D" on Thursday night and they returned the favor on Friday.
It isn't that the new Model D from the electric-vehicle maker is a bad car that explains the 8% slump in Tesla's stock to about $237. Rather, it is that when shares trade at about 250 times forward earnings, expectations can get a little inflated. That is especially so when Mr. Musk, Tesla's chief, has a habit of posting tantalizing tweets ahead of the company's product announcements.
In this case, it seems investors were expecting something a bit more transformative than the enhancements to the existing Model S that the Model D offers, including all-wheel drive and some semiautonomous driving features.
James J. Albertine, an analyst at Stifel with a $400 price target on Tesla, put it like this: "We believe TSLA managers and engineers are very smart in their own right, but stylistically, we would leave the tweeting to tech companies with sub-$1k product price points."
Subject: Product introduction; Investments
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Oct 10, 2014
Section: Marke ts
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1609592960
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1609592960?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Aims to Leapfrog Rivals; 'Autopilot' to Allow Hands-Free Driving in 2015, Ahead of Mercedes-Benz, Audi, Others
Author: White, Joseph B
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Oct 2014: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. plans to offer hands-free highway driving in its Model S electric sedans in 2015, putting it as much as a year ahead of other luxury brands in offering autopilot functions in automobiles, according to people familiar with the company's plans.
Full text: Tesla Motors Inc. plans to offer hands-free highway driving in its Model S electric sedans in 2015, putting it as much as a year ahead of other luxury brands in offering autopilot functions in automobiles, according to people familiar with the company's plans.
Other auto makers, including General Motors Co. and Volkswagen AG's Audi, have said they're aiming to launch hands-free highway driving systems by roughly 2016. Daimler AG's Mercedes-Benz now sells a system that can pilot a car on a freeway, but it is designed so that drivers must keep a hand on the wheel.
Tesla's plan for rolling out a semiautonomous driving system, which it calls Autopilot, and several other safety and driver assistance capabilities, presents as much of a challenge to its rivals as any of the individual features, said analysts. Chief Executive Elon Musk sketched out some of the company's plans in suburban Los Angeles Thursday night, but said little about timing.
Tesla is installing in new Model S sedans radar, cameras and other equipment to enable hands-free highway driving, an automated parking system and other driver assistance and safety features. To eventually activate certain convenience features, including hands-free highway driving, will require purchasing an optional $4,250 technology package, the company said on its website.
The company plans to upgrade the software in these cars through "over the air" updates to enable the features and functions over the coming months. Established car makers have been much slower to adopt the frequent, over-the-air software upgrade approach common in the world of cellphones and other digital devices.
"Tesla is able to bring forth enhancements in product through over-the-air updates that would take other auto companies years to commercialize," Morgan Stanley analyst Adam Jonas wrote in a note on Friday.
On Tesla's website, the company said "progressive software updates over time" will "ultimately" give the Model S Autopilot the ability to operate in automatic mode from highway on-ramp to off-ramp.
New Model S sedans shipping now will include some features already common in rivals' luxury vehicles, including lane departure warning, which signals when the car is drifting out of its lane. Other driver assistance features such as a cruise-control system that can respond to traffic conditions are expected to be released this year.
More advanced autopilot features, including hands-free highway driving, an automatic lane-change function and the automated parking system should be delivered to cars by the first half of next year, the people said.
Tesla's moves come as auto makers are racing to deliver features that allow the car to shoulder more of the tedium and stress of stop-and-go traffic and long highway drives.
Mercedes-Benz S Class and E Class models were the first to offer features that automatically keep a car centered in a lane, navigate freeway curves and maintain a set speed up to 124 miles an hour. The system uses stereo cameras, which mimic human eyes, radar and ultrasonic sensors to feed information about the car's surroundings into onboard computers, but requires the driver to keep a hand on the wheel.
GM's Cadillac division promises in 2016 a system it calls "super cruise" that allows hands-free operation of a car at highway speeds. Volkswagen's Audi, BMW AG and other luxury brands also have signaled plans to offer hands-free "advanced driver assistance systems," or automated driving features, around 2016.
As for parking, BMW and Lexus, among others, now offer parking assist systems that enable their newer vehicles to maneuver themselves into a parallel parking spot, but drivers have to remain on board. Mr. Musk is promising he wants his system to allow drivers to leave the car and let the vehicle park itself.
Mr. Musk's promise of autopilot systems could spur rivals to speed up their plans to launch similar features, analysts said.
"The media attention...will likely accelerate the ADAS/semi-autonomous rollout efforts of other" auto makers, Barclays analyst Brian Johnson said in a research note.
On other features Mr. Musk highlighted, Tesla is a follower.
German luxury car makers already offer all-wheel-drive systems on most of their models, and about 36% of the vehicles they sold in the U.S. in 2013 are equipped with the systems, according to WardsAuto data cited by Barclays.
BMW's i8 plug-in hybrid, which competes with the upper end of the Tesla Model S range, has a small gasoline engine that drives the rear wheels, and electric motor that drives the front wheels.
Tesla says its approach to all-wheel-drive is superior, because its system delivers faster acceleration than a standard Model S and has 10 miles additional driving range over a single-motor model. Most gasoline powered cars with all-wheel drive are less efficient than two-wheel drive models.
Credit: By Joseph B. White
Subject: Automobile industry; Software; Automation; Roads & highways
People: Musk, Elon
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Tesla Motors Inc; NAICS: 336999; Name: Daimler AG; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Oct 10, 2014
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1609626917
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1609626917?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Overheard: A Tesla Backfire
Author: Anonymous
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Oct 2014: B.14.
ProQuest document link
Abstract:
James J. Albertine, an analyst at Stifel with a $400 price target on Tesla, put it like this: "We believe TSLA managers and engineers are very smart in their own right, but stylistically, we would leave the tweeting to tech companies with sub-$1k product price points."
Full text: [Financial Analysis and Commentary]
Elon Musk gave Tesla Motors investors a "D" on Thursday night and they returned the favor on Friday.
It isn't that the new Model D from the electric-vehicle maker is a bad car that explains the 8% slump in Tesla's stock to about $237. Rather, it is that when shares trade at about 250 times forward earnings, expectations can get a little inflated. That is especially so when Mr. Musk, Tesla's chief, has a habit of posting tantalizing tweets ahead of the company's product announcements.
In this case, it seems investors were expecting something a bit more transformative than the enhancements to the existing Model S that the Model D offers, including all-wheel drive and some semiautonomous driving features.
James J. Albertine, an analyst at Stifel with a $400 price target on Tesla, put it like this: "We believe TSLA managers and engineers are very smart in their own right, but stylistically, we would leave the tweeting to tech companies with sub-$1k product price points."
Subject: Product introduction; Investments
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.14
Publication year: 2014
Publication date: Oct 11, 2014
column: Heard on the Street
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1609913041
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1609913041?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Tesla Aims to Leapfrog Rivals
Author: White, Joseph B
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Oct 2014: B.4.
ProQuest document link
Abstract:
Tesla Motors Inc. plans to offer hands-free highway driving in its Model S electric sedans in 2015, putting it as much as a year ahead of other luxury brands in offering autopilot functions in automobiles, according to people familiar with the company's plans.
Full text: Tesla Motors Inc. plans to offer hands-free highway driving in its Model S electric sedans in 2015, putting it as much as a year ahead of other luxury brands in offering autopilot functions in automobiles, according to people familiar with the company's plans.
Other auto makers, including General Motors Co. and Volkswagen AG's Audi, have said they're aiming to launch hands-free highway driving systems by roughly 2016. Daimler AG's Mercedes-Benz now sells a system that can pilot a car on a freeway, but it is designed so that drivers must keep a hand on the wheel.
Tesla's plan for rolling out a semiautonomous driving system, which it calls Autopilot, and several other safety and driver assistance capabilities, presents as much of a challenge to its rivals as any of the individual features, said analysts. Chief Executive Elon Musk sketched out some of the company's plans in suburban Los Angeles Thursday night, but said little about timing.
Tesla is installing in new Model S sedans radar, cameras and other equipment to enable hands-free highway driving, an automated parking system and other driver assistance and safety features. To eventually activate certain convenience features, including hands-free highway driving, will require purchasing an optional $4,250 technology package, the company said on its website.
The company plans to upgrade the software in these cars through "over the air" updates to enable the features and functions over the coming months. Established car makers have been much slower to adopt the frequent, over-the-air software upgrade approach common in the world of cellphones and other digital devices.
"Tesla is able to bring forth enhancements in product through over-the-air updates that would take other auto companies years to commercialize," Morgan Stanley analyst Adam Jonas wrote on Friday.
On Tesla's website, the company said "progressive software updates over time" will "ultimately" give the Model S Autopilot the ability to operate in automatic mode from highway on-ramp to off-ramp.
New Model S sedans shipping now will include some features already common in rivals' luxury vehicles, including lane departure warning, which signals when the car is drifting out of its lane. Other driver assistance features such as a cruise-control system that can respond to traffic conditions are expected to be released this year.
More advanced autopilot features, including hands-free highway driving, an automatic lane-change function and the automated parking system should be delivered to cars by the first half of next year, the people said.
Tesla's moves come as auto makers are racing to deliver features that allow the car to shoulder more of the tedium and stress of stop-and-go traffic and long highway drives.
Mercedes-Benz S Class and E Class models were the first to offer features that automatically keep a car centered in a lane, navigate freeway curves and maintain a set speed up to 124 miles an hour. The system uses stereo cameras, which mimic human eyes, radar and ultrasonic sensors to feed information about the car's surroundings into onboard computers, but requires the driver to keep a hand on the wheel.
GM's Cadillac division promises in 2016 a system it calls "super cruise" that allows hands-free operation of a car at highway speeds. Volkswagen's Audi, BMW AG and other luxury brands also have signaled plans to offer hands-free "advanced driver assistance systems," or automated driving features, around 2016.
As for parking, BMW and Lexus, among others, now offer parking assist systems that enable their newer vehicles to maneuver themselves into a parallel parking spot, but drivers have to remain on board. Mr. Musk is promising he wants his system to allow drivers to leave the car and let the vehicle park itself.
Mr. Musk's promise of autopilot systems could spur rivals to speed up their plans to launch similar features, analysts said.
"The media attention . . . will likely accelerate the ADAS/semi-autonomous rollout efforts of other" auto makers, Barclays analyst Brian Johnson said in a research note.
On other features Mr. Musk highlighted, Tesla is a follower.
German luxury car makers already offer all-wheel-drive systems on most of their models, and about 36% of the vehicles they sold in the U.S. in 2013 are equipped with the systems, according to WardsAuto data cited by Barclays.
BMW's i8 plug-in hybrid, which competes with the upper end of the Tesla Model S range, has a small gasoline engine that drives the rear wheels, and electric motor that drives the front wheels.
Tesla says its approach to all-wheel-drive is superior, because its system delivers faster acceleration than a standard Model S and has 10 miles additional driving range over a single-motor model. Most gasoline powered cars with all-wheel drive are less efficient than two-wheel drive models.
Credit: By Joseph B. White
Subject: Automobile industry; Competition; Electric vehicles; Automation
Location: United States--US
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2014
Publication date: Oct 11, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1610986392
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1610986392?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distributio n is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Michigan Governor Signs Anti-Tesla Bill; Law Bars Auto Makers From Directly Selling to Consumers
Author: White, Joseph B; Bennett, Jeff
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Oct 2014: n/a.
ProQuest document link
Abstract:
While GM and those representing dealer interests supported Gov. Snyder's position, some auto suppliers making parts for Tesla encouraged him to veto the bill saying the ban could stop the auto maker from increasing sales.
Full text: Michigan Gov. Rick Snyder signed a measure Tuesday that blocks Tesla Motors Inc. from selling cars directly to consumers in the state, siding with auto dealers and General Motors Co. even after other Michigan manufacturers advocated for the Silicon Valley company.
The legislation, passed by Michigan lawmakers earlier this month, includes language in support of franchise laws that force auto makers to sell vehicles through the network of dealers rather than directly to buyers. Tesla has employed the direct-sales method to luxury electric sedans even as rivals, including GM, have been compelled to use their existing dealers networks.
Tesla can still sell cars in Michigan, but the legislation forces the company to use a third party for distribution.
Gov. Snyder, in a statement, played down the impact of the new law, saying auto makers, including Tesla, were already prohibited from selling cars directly to consumers. But Mr. Snyder, who was once president of direct-to-consumer PC retailer Gateway Computers, said Michigan lawmakers should "discuss the current business model soon to determine it if it is best for the state's consumers."
While GM and those representing dealer interests supported Gov. Snyder's position, some auto suppliers making parts for Tesla encouraged him to veto the bill saying the ban could stop the auto maker from increasing sales.
Tesla's vice president for business development, Diarmuid O'Connell, said the new law goes beyond previous statutes, and means that Tesla probably cannot open either a company-owned sales outlet, or a "gallery" at which the company's cars are displayed, but not sold. Instead, he said, Michigan residents who want to buy a Tesla will have to visit to a store in another state, such as Ohio or Illinois, or order one and have it delivered by a third-party service.
Tesla will take Mr. Snyder up on his proposal to keep talking about the way auto sales are regulated, Mr. O'Connell said. "We were going to come to Lansing to discuss this issue in any event," he said.
"We've got a huge footprint of suppliers" in Michigan, Mr. O'Connell said. "It's unhelpful when we are prevented from doing our normal course of business, when considering future investment."
Tesla has fought battles in several states with franchised auto dealers who want to block the electric car company from selling its vehicles directly to consumers. Dealers say they're concerned that if Tesla is allowed to bypass the dealer-franchise system, other auto makers will seek to do so as well, undermining their investments. Tesla officials counter that since the company has never sold through franchised dealers, laws governing relations between auto makers and retailers shouldn't apply to its business.
Michigan legislators earlier this month passed a bill that further tightened restrictions on direct sales by car makers, changing key words in existing law in ways that Tesla officials say were directly aimed at the company's retail strategy. The legislature's action put Mr. Snyder on the spot in the middle of his campaign for re-election.
GM, based in Detroit, weighed into the debate over the Michigan law with a statement urging Gov. Snyder to sign the pro-car dealer bill. "We believe that House Bill 5606 will help ensure that all automotive manufacturers follow the same rules to operate in the State of Michigan; therefore, we encourage Governor [Rick] Snyder to sign it," GM said.
Tesla, in a statement Tuesday, said: "What's good for GM's customers is not necessarily good for Tesla's customers. GM distorts the purpose of the franchise laws which are in place not to cement a monopoly for franchised dealers, but rather to prevent companies with existing franchises from unfairly competing against them."
Credit: By Joseph B. White and Jeff Bennett
Subject: Automobile dealers; Bills; Corporate planning
Location: Michigan
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Oct 21, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1614430902
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1614430902?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Daimler Sells Its 4% Stake in Tesla; German Auto Maker Plans to Continue 'Partnership and Cooperation' With Electric Car Maker
Author: Ramsey, Mike; White, Joseph B
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Oct 2014: n/a.
ProQuest document link
Abstract:
[...]of capital increases at Tesla, Daimler's stake in the company decreased to around 4%, the company said in a statement.
Full text: Daimler AG said it has sold its remaining 4% stake in electric car maker Tesla Motors Inc. for a gain of $780 million, in a move that comes as the German auto maker is trying to build a battery making venture in its home country.
Holding shares in Tesla "is not necessary for our partnership and cooperation," Bodo Uebber, the Daimler board member for finance said Tuesday after the U.S. markets closed.
Daimler, which makes Mercedes-Benz and Smart vehicles, said it will continue to buy Tesla batteries for the current Mercedes B-Class electric car, but didn't say whether it would buy Tesla batteries for future models.
Mr. Uebber said the stake sale "will also allow Tesla to broaden its investor base."
Daimler didn't disclose the buyer of its Tesla stake. Tesla didn't immediately comment on the stake sale.
In the years since Daimler acquired its Tesla shares, the Palo Alto, Calif., electric car maker has grown from a fragile startup to a significant rival to Daimler's Mercedes-Benz brand in the contest for highly affluent, technology-savvy consumers
The auto maker is selling its stake in Tesla at a time when Tesla's stock is on a downswing. Tesla shares soared to a peak of $291 a share in September from $116.10 a share in November 2013. Since September, Tesla shares have dropped about 19%.
Some analysts have questioned whether Tesla's near-term results could show signs that demand is hitting a plateau for its Model S sedans, which start at about $71,000. Other analysts and investors argue the company's shares will go even higher.
Daimler initially acquired a 9.1% stake in Tesla in May 2009 for a price estimated at roughly $50 million before Tesla went public. In July 2009, 40% of that investment was transferred to Aabar Investments PJSC, an investing arm of the government of Abu Dhabi. As a result of capital increases at Tesla, Daimler's stake in the company decreased to around 4%, the company said in a statement.
The German auto maker said it expects to reap $780 million in cash from its share sale, boosting its earnings before interest and taxes for all of 2014 by about the same amount. Daimler's representative on Tesla's board of directors, Harald Kroeger, left the board earlier this year.
In its statement, Daimler said its partnership with Tesla "is very successful and will be continued." But the German auto maker also noted its relationship with Tesla "optimally complements our involvement in Deutsche ACCUmotive." The Deutsche ACCUmotive venture is controlled by Daimler and manufactures lithium-ion vehicle batteries in Kamenz, near Dresden, Germany.
Daimler executives earlier this year stressed the importance of developing Germany as a center for electric vehicle battery production--a goal mirrored by U.S. government investments in domestic lithium-ion vehicle battery production.
Earlier this year, Tesla disclosed that its agreement to sell batteries to Japan's Toyota Motor Corp. would likely end this year. Toyota invested $50 million in Tesla in 2010 and as March 31 reported holding a 2.4% stake in the company with an indicated value of $692 million. Toyota executives have recently criticized electric cars, saying vehicles powered by fuel cells running on hydrogen are a better choice as an alternative to gasoline or diesel fuels.
Separately, Michigan Gov. Rick Snyder signed a measure on Tuesday that blocks Tesla from selling cars directly to consumers in the state, siding with auto dealers and General Motors Co. even after other Michigan manufacturers advocated for Tesla.
The legislation, passed by Michigan lawmakers earlier this month, includes language in support of franchise laws that force auto makers to sell vehicles through a network of dealers rather than direct to buyers. Tesla has employed the direct sales method to luxury electric sedans even as rivals, including GM, are required by franchise laws to use their existing dealer networks. GM and Ford Motor Co. have floated plans in the past to sell vehicles directly, but shelved them when confronted by dealer protests, and now say they are committed to the franchise system.
Tesla can still sell cars in Michigan, but the legislation forces the company to use a third party to deliver vehicles to customers.
Gov. Snyder, in a statement, played down the impact of the new law, saying auto makers, including Tesla, were already prohibited from selling cars directly to consumers. But Mr. Snyder, who was once president of direct-to-consumer PC retailer Gateway Computers, said Michigan lawmakers should "discuss the current business model soon to determine if it is best for the state's consumers."
While GM and those representing dealer interests supported Gov. Snyder's position, some auto suppliers making parts for Tesla encouraged him to veto the bill saying the ban could stop the auto maker from increasing sales.
Diarmuid O'Connell, Tesla's vice president for business development, said the new law goes beyond previous statutes, and means that Tesla probably cannot open either a company-owned sales outlet, or a "gallery" at which the company's cars are displayed, but not sold.
Instead, he said, Michigan residents who want to buy a Tesla will have to visit a store in another state, such as Ohio or Illinois, or order one and have it delivered by a third-party service.
Credit: By Mike Ramsey and Joseph B. White
Subject: Automobile dealers; Research & development--R & D; Investments
Location: United States--US Michigan
Company / organization: Name: Aabar Investments PJSC; NAICS: 523920; Name: Tesla Motors Inc; NAICS: 336999; Name: Daimler AG; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Oct 21, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1614536125
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1614536125?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Daimler Sells Stake in Tesla Motors
Author: Ramsey, Mike; White, Joseph B
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]22 Oct 2014: B.4.
ProQuest document link
Abstract:
[...]of capital increases at Tesla, Daimler's stake in the company decreased to around 4%, the company said.
Full text: Daimler AG said it has sold its remaining 4% stake in electric car maker Tesla Motors Inc. for a gain of $780 million, in a move that comes as the German auto maker is trying to build a battery making venture in its home country.
Holding shares in Tesla "is not necessary for our partnership and cooperation," Bodo Uebber, the Daimler board member for finance said Tuesday after the U.S. markets closed.
Daimler, which makes Mercedes-Benz and Smart vehicles, said it will continue to buy Tesla batteries for the current Mercedes B-Class electric car, but didn't say whether it would buy Tesla batteries for future models.
Mr. Uebber said the stake sale "will also allow Tesla to broaden its investor base."
Daimler didn't disclose the buyer of its Tesla stake. Tesla didn't immediately comment on the stake sale.
Daimler initially acquired a 9.1% stake in Tesla in May 2009 for a price estimated at roughly $50 million before Tesla went public.
In July 2009, 40% of that investment was transferred to Aabar Investments PJSC, an investing arm of the government of Abu Dhabi. As a result of capital increases at Tesla, Daimler's stake in the company decreased to around 4%, the company said.
The German auto maker said it expects to reap $780 million in cash from its share sale.
Credit: By Mike Ramsey and Joseph B. White
Subject: Automobile industry; Equity stake; Batteries
Location: United States--US
Company / organization: Name: Aabar Investments PJSC; NAICS: 523920; Name: Tesla Motors Inc; NAICS: 336999; Name: Daimler AG; NAICS: 336111
Classification: 1310: Foreign investment in the US; 8640: Chemical industry; 8680: Transportation equipment industry; 9175: Western Europe; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2014
Publication date: Oct 22, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1614573668
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1614573668?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Toyota Confirms Sale of Part of Tesla Stake; Daimler Disclosed It Divested Its Tesla Shares a Few Days Ago for Sizable Gain
Author: White, Joseph B
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Oct 2014: n/a.
ProQuest document link
Abstract:
Toyota Motor Corp. said Friday it has sold some of its stake in Tesla Motors Inc., days after German luxury car maker Daimler AG disclosed it had divested its Tesla shares for a sizable gain.
Full text: Toyota Motor Corp. said Friday it has sold some of its stake in Tesla Motors Inc., days after German luxury car maker Daimler AG disclosed it had divested its Tesla shares for a sizable gain.
The sale came "as part of our process of regularly reviewing our investment portfolio," Toyota said in a statement. "We have a good relationship with Tesla, and will evaluate the feasibility of working together on future projects."
Toyota invested $50 million in a then-fledgling Tesla in 2010. In March, the Japanese auto giant reported owning a 2.4% stake in Tesla shares, with an indicated value of about $690 million.
Earlier this year, Tesla disclosed that its agreement to sell batteries to Toyota would likely end this year. Toyota executives have recently criticized electric cars, saying vehicles powered by fuel cells running on hydrogen are a better choice as an alternative to gasoline or diesel fuels. Tesla Chief Executive Elon Musk has in turn criticized fuel cells.
Toyota didn't say how many Tesla shares it sold. Daimler earlier this week said it sold its entire 4% stake in Tesla, the remaining shares from an initial $50 million investment, for a gain of about $780 million.
Daimler and Toyota each were sitting on large gains on their early investments in Tesla. Each of the two global auto giants now increasingly encounter Tesla as a rival. Tesla's Model S sedan, which starts at $71,000, competes with Daimler's Mercedes S-class and Toyota's Lexus LS sedans for the most affluent consumers in the U.S., China and Europe.
Tesla shares surged during the past year to a peak of $291, but since September Tesla's share price has skidded by about 19%.
Toyota's action was first reported by Japan's Nikkei financial news service.
Credit: By Joseph B. White
Subject: Research & development--R & D; Automobile industry
People: Musk, Elon
Company / organization: Name: Daimler AG; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999; Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Oct 24, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1615893261
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1615893261?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Electric Cars Aren't Only About Fuel; Do you like your iPhone? Would you give it up and go back to a dial telephone? The analogy applies perfectly to the Tesla experience.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Oct 2014: n/a.
ProQuest document link
Abstract:
Clearly, buyers at this price point don't need such an incentive ("Cheap Oil Pops the Green Policy Bubble," Business World, Oct. 15).
Full text: Holman Jenkins excoriates Tesla because of the $7,500 government subsidy extended to buyers of this automobile, which on average costs over $100,000. Clearly, buyers at this price point don't need such an incentive ("Cheap Oil Pops the Green Policy Bubble," Business World, Oct. 15).
I am an owner of this extraordinary vehicle and agree 100% with Mr. Jenkins's position. If the product is commercially viable, it doesn't need a government subsidy. It is also fairly obvious that you can't run the world's largest economy on subsidized energy. But don't blame Elon Musk; blame the misguided politicians who gave him this handout, which anyone would take if offered.
Mr. Jenkins also suggests that as the price at the pump drops, there will be less incentive to buy a Tesla. I disagree with this point as well. I must admit I do take pleasure from the fact that it has cost me exactly $154 to "fuel" my Model S for the 13,000 miles I have driven to date. Rather, we buy this automobile because of the spectacular driving experience, as well as the pure convenience of never having to go to a gas station. It's like gas is a nickel a gallon with the pump in your garage.
Do you like your iPhone? Would you give it up and go back to a dial telephone? The analogy applies perfectly to the Tesla experience. Once you drive one, you can never drive anything else.
But I thank all of you for the $7,500 tax credit, which I can use to finance an IRA Roth conversion.
Stephen R.S. Martin
Cave Creek, Ariz.
Subject: Government subsidies
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Oct 26, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1616380868
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1616380868?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Unveils Lower-Cost Lease Program; Electric-Car Maker Looks to Lift Sagging U.S. Sales Through New Incentives
Author: Ramsey, Mike; Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Oct 2014: n/a.
ProQuest document link
Abstract:
With sales of its electric sedan declining in its home market, Tesla Motors Inc. this week launched U.S. incentives that cut its monthly lease price and aim to convince potential customers that buying the car is a safe financial bet. Tesla Chief Executive Elon Musk said the Silicon Valley car maker is joining with U.S. Bank to cut monthly lease payments by as much as 25%.
Full text: With sales of its electric sedan declining in its home market, Tesla Motors Inc. this week launched U.S. incentives that cut its monthly lease price and aim to convince potential customers that buying the car is a safe financial bet.
Tesla Chief Executive Elon Musk said the Silicon Valley car maker is joining with U.S. Bank to cut monthly lease payments by as much as 25%. In a blog post on Saturday, he credited the bank's lower cost of capital for the lease-rate cut. He also unveiled a "happiness guarantee," promising to take back cars within the first 90 days of ownership "if you don't like your car for any reason." The return policy doesn't allow a buyer to swap for another vehicle.
The incentives are unusual for Palo Alto, Calif.-based Tesla, which sells the Model S for between $71,000 and well over $100,000. Monthly leases currently run between $777 and $1,271, and leases represent a substantial share of Tesla sales.
The auto maker has long had a waiting list in the U.S. for its only car, which is currently back-ordered in its home market until December, according to a company sales representative. Tesla, however, is facing declining sales in the U.S., according to WardsAuto.com, an industry publication that tracks auto company data.
Through September, Tesla sold 10,335 Model S sedans in its home market, down 26% compared with the same period in 2013. The U.S. decline has come even as the company's U.S. production increased 10% during the same period, according to WardsAuto.
Tesla doesn't disclose sales volumes by region, but has said it expects half of its sales to be outside the U.S. by the end of 2014. With a goal of selling 35,000 cars this year, Tesla would have to sell about 17,500 models in the U.S. At its current sales pace, the auto maker will miss that target by a wide margin--and will have to double its sales pace to hit its goal.
"There still is extremely high demand for the car," a Tesla spokeswoman said, declining to confirm WardsAuto's data. The auto maker has said it needed to divert some production from its Fremont, Calif., factory to Asia as it ramped up sales in China in April.
Haig Stoddard, a WardsAuto analyst, said Tesla's U.S. struggles suggest more than a need to divert production to international markets.
"I would attribute the sales decline to the Model S being a niche product that has probably temporarily satiated demand, somewhat exacerbated by falling gas prices," he said.
General Motors Co. and other auto makers have experimented with return policies in the past, but often abandoned them after the initial excitement wore off. Return policies are risky for auto makers, because vehicles often rapidly depreciate after they are driven off the lot.
Tesla employs a direct-selling method, unlike most of its competitors that rely on dealers. It also has been forging a strategy for preowned vehicle sales.
A barrel of oil traded in the U.S. for about $81 on Monday, 23% less than at the end of June--leading the national average price of a gallon of gasoline to hover around $3 a gallon. Lower fuel prices weaken the business case for the sale of electric cars that don't require gasoline or diesel for propulsion.
Tesla shares fell $13.57, or nearly 6%, to $221.67 in 4 p.m. New York trading on Monday. The selloff also followed disclosures last week by Daimler AG and Toyota Motor Corp. confirming the two had sold shares they held in Tesla.
Daimler sold its entire 4% stake in the electric car maker for a gain of $780 million, a stake it had amassed along with a battery-supply partnership with Tesla. Tesla makes batteries for the Mercedes B-Class electric car, but Daimler said holding shares in Tesla "is not necessary for our partnership and cooperation." A Daimler board member said selling shares "will allow Tesla to broaden its investor base."
Toyota followed up by saying it sold an undisclosed amount of its 2.4% stake in Tesla "as part of our process of regularly reviewing our investment portfolio." Earlier this year, Tesla disclosed that its agreement to sell batteries to Toyota would likely end this year.
The stake sales and lack of clarity on future supply contracts indicate Tesla's ambitions to sell batteries to other car makers will be challenging. Daimler and Toyota, like other Tesla rivals, are developing their own battery-making expertise and looking to widen their base of advanced technology suppliers.
Tesla isn't alone in facing these challenges. Nissan Motor Co., which had ambitions to sell batteries from its plant in Smyrna, Tenn., has found no takers so far among other car companies. Sam Jaffe, a battery industry consultant with Navigant Research, said it is unlikely auto makers would flock to Tesla's batteries.
In his blog post, Mr. Musk noted that customers wouldn't be able to return a Model S for another Model S, perhaps aiming at people looking to get quick upgrades for their car that weren't available when they bought it.
Some customers were frustrated with Mr. Musk announced a few weeks ago when he announced new vehicles could now come with enhanced safety features and the availability of all-wheel-drive. They had only recently purchased their vehicles and wanted to get upgrades for their new car.
Credit: By Mike Ramsey and John D. Stoll
Subject: Automobile sales; Gasoline prices; Automobile industry
Location: United States--US
People: Musk, Elon
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Oct 27, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1616542253
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1616542253?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Cuts Lease Prices In Bid to Boost Demand
Author: Ramsey, Mike; Stoll, John D
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 Oct 2014: B.1.
ProQuest document link
Abstract:
Tesla Chief Executive Elon Musk said the Silicon Valley car maker is joining with U.S. Bank to cut monthly lease payments by as much as 25%.
Full text: With sales of its electric sedan declining in its home market, Tesla Motors Inc. this week launched U.S. incentives that cut its monthly lease price and aim to convince potential customers that buying the car is a safe financial bet.
Tesla Chief Executive Elon Musk said the Silicon Valley car maker is joining with U.S. Bank to cut monthly lease payments by as much as 25%. In a blog post on Saturday, he credited the bank's lower cost of capital for the lease-rate cut. He also unveiled a "happiness guarantee," promising to take back cars within the first 90 days of ownership "if you don't like your car for any reason." The return policy doesn't allow a buyer to swap for another vehicle.
The incentives are unusual for Palo Alto, Calif.-based Tesla, which sells the Model S for between $71,000 and well over $100,000. Monthly leases currently run between $777 and $1,271, and leases represent a substantial share of Tesla sales.
The auto maker has long had a waiting list in the U.S. for its only car, which is currently back-ordered in its home market until December, according to a company sales representative. Tesla, however, is facing declining sales in the U.S., according to WardsAuto.com, an industry publication that tracks auto company data.
Through September, Tesla sold 10,335 Model S sedans in its home market, down 26% compared with the same period in 2013. The U.S. decline has come even as the company's U.S. production increased 10% during the same period, according to WardsAuto.
Tesla doesn't disclose sales volumes by region, but has said it expects half of its sales to be outside the U.S. by the end of 2014. With a goal of selling 35,000 cars this year, Tesla would have to sell about 17,500 models in the U.S. At its current sales pace, the auto maker will miss that target by a wide margin -- and will have to double its sales pace to hit its goal.
"There still is extremely high demand for the car," a Tesla spokeswoman said, declining to confirm WardsAuto's data. The auto maker has said it needed to divert some production from its Fremont, Calif., factory to Asia as it ramped up sales in China in April.
Haig Stoddard, a WardsAuto analyst, said Tesla's U.S. struggles suggest more than a need to divert production to international markets.
"I would attribute the sales decline to the Model S being a niche product that has probably temporarily satiated demand, somewhat exacerbated by falling gas prices," he said.
General Motors Co. and other auto makers have experimented with return policies in the past, but often abandoned them after the initial excitement wore off. Return policies are risky for auto makers, because vehicles often rapidly depreciate after they are driven off the lot.
Tesla employs a direct-selling method, unlike most of its competitors that rely on dealers. It also has been forging a strategy for preowned vehicle sales.
A barrel of oil traded in the U.S. for about $81 on Monday, 23% less than at the end of June -- leading the national average price of a gallon of gasoline to hover around $3 a gallon. Lower fuel prices weaken the business case for the sale of electric cars that don't require gasoline or diesel for propulsion.
Tesla shares fell $13.57, or nearly 6%, to $221.67 in 4 p.m. New York trading on Monday. The selloff also followed disclosures last week by Daimler AG and Toyota Motor Corp. confirming the two had sold shares they held in Tesla.
The stake sales and lack of clarity on future supply contracts indicate Tesla's ambitions to sell batteries to other car makers will be challenging.
Daimler and Toyota, like other Tesla rivals, are developing their own battery-making expertise and looking to widen their base of advanced technology suppliers.
Credit: By Mike Ramsey and John D. Stoll
Subject: Automobile sales; Gasoline prices; Stock prices; Automobile leasing; Electric vehicles
Location: United States--US
People: Musk, Elon
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: US Bancorp-Minneapolis MN; NAICS: 522110, 551111; Name: Tesla Motors Inc; NAICS: 336999
Classification: 7300: Sales & selling; 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2014
Publication date: Oct 28, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1617022074
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1617022074?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Seen Boosting North American Deliveries in 3rd Quarter; Company Likely Delivered 3,274 Model S Sedans in September, Says Analyst
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Oct 2014: n/a.
ProQuest document link
Abstract:
According to JL Warren Capital LLC, which collects registration and import data in China, Tesla has exported 3,406 vehicles to China since April.
Full text: Tesla Motors Inc. likely delivered about 3,274 Model S sedans in North America in September, boosting its domestic third quarter deliveries to about 4,900 vehicles, according to equity analyst Brian Johnson of Barclays.
He derived that figure after Chief Executive Officer Elon Musk said September sales rose 65% in North America and that global deliveries were a record. Mr. Musk made the comments in a tweet in response to a Wall Street Journal article that cited data from WardsAuto showing U.S. sales falling 26% this year through September.
Mr. Musk called the Journal story inaccurate, although he didn't actually address the figures in the story, only saying that September sales had risen.
Tesla's shares jumped 9% to $241 Tuesday following Mr. Musk's late-night tweet.
Mr. Johnson said the new data from Mr. Musk implies that Tesla's North American sales through three quarters still are down 17% compared with the previous year. Tesla has said its U.S. deliveries could be lower during the first half of the year because it is shifting deliveries to Asia and Europe, where it is ramping up operations. Tesla has a goal of selling 35,000 vehicles in 2014, up from 22,400 in 2013, with about half coming from North America.
According to WardsAuto, sales in the U.S. through September were 10,335. IHS Automotive, which uses vehicle registration data collected from every state, says sales from January through August were off 34% at 8,032 in the U.S. The registration data lags behind sales data collection about a month and more recent figures weren't available to reflect a potential big September sales increase.
Tesla has reported 15,114 global sales through two quarters. Unlike most auto makers, Tesla doesn't break out regional sales and only reports on deliveries during quarterly earnings conference calls. Tesla is scheduled to report its third-quarter earnings on Nov. 5.
According to JL Warren Capital LLC, which collects registration and import data in China, Tesla has exported 3,406 vehicles to China since April. Of those, a little over 900 have been registered by customers with Chinese licensing authorities.
According to Junheng Li, chief of research for the firm, the disparity mostly comes from scalpers looking to flip the cars for a premium, but also from people who bought the cars and don't have a license.
Some people also may have canceled their purchase, giving up a 50,000 yuan ($8,178) deposit. The research firm notes that September imports declined to 524 from 774 in August, indicating a possible softening in demand.
Tesla posted a blog post on its Web page detailing a new lease program that could reduce the monthly payments for customers by up to 25%. The new program, offered through U.S. Bank, substitutes a Tesla-financed program that has less favorable lease terms. Tesla also offered a 90-day "happiness guarantee" that allows customers to return their car and void their lease if they were unhappy.
Credit: By Mike Ramsey
Subject: Earnings; Vehicles; Registration; Financial performance
Location: United States--US North America
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Oct 28, 2014
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1617435367
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1617435367?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Skeptics Make Musk Dyspeptic; Investors Are Growing Impatient With Progress
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Nov 2014: n/a.
ProQuest document link
Abstract:
Mr. Musk's hyperbole and impatience with unflattering analysis could also sow doubt about his battery plant, which skipped over the names "kilo" and "mega" in orders of magnitude.
Full text: Tesla Motors Inc. chief Elon Musk likened a speedier model he unveiled last month to a "personal roller coaster."
Investors in the electric-car maker know the feeling. Underwhelmed after the hype leading up to the event, they watched the stock drop nearly 13% in the following two trading sessions. Of course, up to that point it had rocketed 70% higher year to date and 660% since the start of 2013.
So, even after taking a bit of air out of the tires, Tesla's $30 billion market value still seems overinflated.
Wednesday's third-quarter results may be rockier than usual, though. Mr. Musk rejected a recent report in The Wall Street Journal citing estimates by Ward's Auto that U.S. deliveries were down by 26% year to date. But the figure he used to refute that was specific to September sales in North America, which he said were up 65% year over year. The company itself declined to comment.
Analysts expect Tesla to log a loss of 34 cents a share in the quarter versus nine cents a year earlier. Tesla is seen reporting its first annual profit next year of $2.01 a share, and roughly doubling that in 2016. On that basis, the company is valued at 118 times and 60 times those years' respective earnings.
It is 2017 and beyond, when Tesla's mass-market Tesla 3 is slated to go on sale, that will validate or demolish the investment thesis. The ultimate success of that hinges on the company's "gigafactory" for batteries being built in Nevada. It will be necessary not only to produce the Tesla 3 but also to make its price low enough.
Skeptics abound on the cost front. While shipments of the luxury Model S still look robust and should quicken as capacity is increased, quibbling over today's sales is a distraction. The big, round numbers hinge upon how much more efficient batteries can become and how attractive Tesla's mass-market models may be. The technical aspects, in particular, are open questions.
Mr. Musk's hyperbole and impatience with unflattering analysis could also sow doubt about his battery plant, which skipped over the names "kilo" and "mega" in orders of magnitude.
If he defies the skeptics, tera, peta, exa, zetta and yotta remain available for bolder ventures. As for now, that mass-market ambition is all talk: Yotta, yotta, yotta.
Credit: By Spencer Jakab
Subject: Financial performance
Location: United States--US North America
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 4, 20 14
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1619592829
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1619592829?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Pledges to Boost Output as Loss Widens; Electric-Car Maker Cites Production Limits in Latest Quarter
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Nov 2014: n/a.
ProQuest document link
Abstract:
Electric car maker Tesla Motors Inc. reported a wider third-quarter loss and trimmed its forecast for deliveries this year, citing delays to a planned factory overhaul.
Full text: Electric car maker Tesla Motors Inc. reported a wider third-quarter loss and trimmed its forecast for deliveries this year, citing delays to a planned factory overhaul.
The Palo Alto, Calif., auto maker reported a loss of $74.6 million, compared with a $38.5 million loss a year ago. It also lowered its forecast for full-year deliveries of its Model S sedans by 2,000 vehicles to about 33,000.
Tesla said it earned $3 million, or two cents a share, excluding stock-based compensation, better than the one-cent a share adjusted loss forecast by analysts polled by Thomson Reuters. Vehicle sales in the third quarter were 7,785, slightly less than the 7,800 forecast by the company.
Revenue nearly doubled to $852 million from $431 million a year earlier.
"Demand is not our issue; production is our issue. And being too perfectionist about future products," Chief Executive Elon Musk said on a call with investors. He reiterated a goal of being able to make up to 100,000 vehicles by the end of next year, and said the company would spend $350 million in its current quarter to increase capacity.
That reassurance helped push its shares up 7%, or $15.62, in after-hours trading after finishing off $7.96 at $230.97 in 4 p.m. Nasdaq trading.
Two weeks ago, industry trade publication WardsAuto estimated that Tesla's U.S. sales for the first nine months this year had fallen by 26%. Mr. Musk disputed it at the time, saying its world-wide sales in September were at a "record high."
The company continued to reap significant cash from selling emissions credits. In its latest quarter, Tesla said it sold $93 million in credits, which help other auto makers offset sales of gas-hungry vehicles. It also collected $31 million from sales of electric powertrains, mainly to Daimler AG.
Tesla consumed $304 million in cash--about 10% of its reserves--during the quarter. It expects to sell 2,000 fewer vehicles this year after a plant equipment installation designed to increase production took longer than forecast.
Tesla is investing heavily to expand in markets in Asia and Europe while also developing its coming Model X sport-utility vehicle. Research and development expenses rose 28% in the third quarter compared with the second quarter. Overhead costs rose 18%, and the company spent $284 million on capital expenditures in the latest quarter.
"People don't appreciate how hard it is to manufacture something. It is really hard. I have great respect for people who manufacture complex objects," Mr. Musk said, discussing a delay to its Model X. It now plans shipments in the third quarter of 2015, a one-quarter slip.
The company forecast adjusted fourth-quarter earnings of between 30 cents and 35 cents a share. That is less than half the 75 cents a share consensus for the final quarter tallied by Thomson Reuters.
Separately, Tesla was one of four car makers to earn a 5-star rating in the latest set of European crash tests by independent regulators. The European New Car Assessment Program, or Euro NCAP, awarded its highest rating to Tesla's Model S in a batch of six tests. Cars made by BMW AG, Volkswagen AG, and Nissan Motor Co. also received five stars, while two others were assigned four.
Achieving five stars from Euro NCAP isn't uncommon. Eight of the past 20 cars tested received that rank. But the Model S--one of the few cars recently tested by Euro NCAP and sold in the U.S. and Western Europe--is unique in that it also has received a 5-star rating from the National Highway Traffic Safety Administration in the U.S.
"The Model S is one of just a few cars to have ever achieved a 5-star rating from both," Tesla said in a statement. The company claims it has the only car this year to receive both a five-star Euro NCAP rating and five stars in every NHTSA subcategory, including frontal impact, side impact, and rollover.
The ratings, often viewed by customers as the gold standard of safety analysis, gives Tesla a boost at a time when it is looking to expand globally and establish its legitimacy in an industry dominated by auto making conglomerates with access to billions in capital. The auto maker has one of the few relatively successful fully electric cars on the global market.
It has been gradually rolling out new features and more attractive pricing. For instance, lease rates in the U.S. were recently lowered by as much a 25%, an incentive made possible by its partnership with a lender that has access to lower-cost capital.
While the Model S already has features such as lane-departure warning and speed-limit warnings, more safety enhancements are slated to come. Blind spot warning and collision avoidance are "coming soon," the auto maker said.
John D. Stoll contributed to this article.
Credit: By Mike Ramsey
Subject: Automobile industry; Vehicles; Automobile sales; Losses; NASDAQ trading
Location: United States--US Palo Alto California
People: Musk, Elon
Company / organization: Name: Daimler AG; NAICS: 336111; Name: Thomson Reuters; NAICS: 511110, 511140; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 5, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1619996037
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1619996037?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Posts Wider Net Loss; Electric Car Maker's Factory Overhaul Took Longer Than Expected
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Nov 2014: n/a.
ProQuest document link
Abstract:
Electric-car maker Tesla Motors Inc. reported a wider third quarter loss and pushed back by a quarter the release of its highly anticipated Model X sport-utility vehicle to the third quarter of next year.
Full text: Electric-car maker Tesla Motors Inc. reported a wider third quarter loss and pushed back by a quarter the release of its highly anticipated Model X sport-utility vehicle to the third quarter of next year.
The Palo Alto, Calif., auto maker reported a net loss of $74.6 million, compared with a $38.5 million loss a year ago, as a planned factory overhaul took longer than expected. It also lowered its forecast for full-year deliveries by between 5% and 7% to 33,000 vehicles.
Tesla said it earned $3 million, or 2 cents a share, excluding stock-based compensation, better than the 1-cent a share adjusted loss forecast by analysts polled by Thomson Reuters.
Revenue nearly doubled to $852 million from $431 a year earlier.
Its shares were up nearly 5%, or $11.34 in after-hours trading after finishing off $7.96 at $230.97 in 4 p.m. Nasdaq trading.
The company said adjusted results for the fourth quarter were likely to be between 30 cents and 35 cents a share. That forecast is less than half the 75 cents a share consensus for the final quarter.
Tesla trimmed its forecast for 2014 deliveries to 33,000 from 35,000, reflecting lower production capability than it had anticipated. Tesla said it hasn't changed its forecast for production in 2015, which could reach 2,000 vehicles a week, or close to 100,000 vehicles a year.
Tesla said it delivered 7,785 vehicles around the world in the third quarter, slightly less than the 7,800 it had forecast for the quarter. Tesla has traditionally exceeded its delivery forecast. In this case, Tesla originally planned to deliver 9,500 cars in the third quarter, but lowered the estimate to account for a plant shut down to install new equipment in July. Tesla said the shut down took longer than expected, affecting third-quarter deliveries.
Tesla's cash pile fell to $2.4 billion from $2.7 billion at the end of second quarter as it invested in capital expenses and lost money from operations.
The company said its revenue included $76 million from sales of zero emission vehicle credits, and $31 million in sales of electric powertrains, mainly to Daimler AG.
Separately, Tesla was one of four car makers to earn a 5-star rating in the latest set of European crash tests by independent regulators. The European New Car Assessment Program, or Euro NCAP, awarded its highest rating to Tesla's Model S electric car in a batch of six tests. Cars made by BMW AG, Volkswagen AG, and Nissan Motor Co. also received five stars, while two others were assigned four.
Credit: By Mike Ramsey
Subject: Net losses; Automobile industry; Vehicles
Location: Palo Alto California
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Nissan Motor Co Ltd; NAICS: 336111; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall St reet Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 5, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1620399112
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1620399112?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Tesla Pledges to Boost Output as Loss Widens
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 Nov 2014: B.3.
ProQuest document link
Abstract:
Electric car maker Tesla Motors Inc. reported a wider third-quarter loss and trimmed its forecast for deliveries this year, citing delays to a planned factory overhaul.
Full text: Electric car maker Tesla Motors Inc. reported a wider third-quarter loss and trimmed its forecast for deliveries this year, citing delays to a planned factory overhaul.
The Palo Alto, Calif., auto maker reported a loss of $74.6 million, compared with a $38.5 million loss a year ago. It also lowered its forecast for full-year deliveries of its Model S sedans by 2,000 vehicles to about 33,000.
Tesla said it earned $3 million, or two cents a share, excluding stock-based compensation, better than the one-cent a share adjusted loss forecast by analysts polled by Thomson Reuters. Vehicle sales in the third quarter were 7,785, slightly less than the 7,800 forecast by the company.
Revenue nearly doubled to $852 million from $431 million a year earlier.
"Demand is not our issue; production is our issue. And being too perfectionist about future products," Chief Executive Elon Musk said on a call with investors. He reiterated a goal of being able to make up to 100,000 vehicles by the end of next year, and said the company would spend $350 million in its current quarter to increase capacity.
That reassurance helped push its shares up 7%, or $15.62, in after-hours trading after finishing off $7.96 at $230.97.
Two weeks ago, industry trade publication WardsAuto estimated that Tesla's U.S. sales for the first nine months this year had fallen by 26%. Mr. Musk disputed it at the time, saying its world-wide sales in September were at a "record high."
The company continued to reap significant cash from selling emissions credits. In its latest quarter, Tesla said it sold $93 million in credits, which help other auto makers offset sales of gas-hungry vehicles. It also collected $31 million from sales of electric powertrains, mainly to Daimler AG.
Tesla consumed $304 million in cash -- about 10% of its reserves -- during the quarter. It expects to sell 2,000 fewer vehicles this year after a plant equipment installation designed to increase production took longer than forecast.
Tesla is investing heavily to expand in markets in Asia and Europe while also developing its coming Model X sport-utility vehicle. Research and development expenses rose 28% in the third quarter compared with the second quarter. Overhead costs rose 18%, and the company spent $284 million on capital expenditures in the latest quarter.
"People don't appreciate how hard it is to manufacture something. It is really hard. I have great respect for people who manufacture complex objects," Mr. Musk said, discussing a delay to its Model X. It now plans shipments in the third quarter of 2015, a one-quarter slip.
The company forecast adjusted fourth-quarter earnings of between 30 cents and 35 cents a share. That is less than half the 75 cents a share consensus for the final quarter tallied by Thomson Reuters.
Separately, Tesla was one of four car makers to earn a 5-star rating in the latest set of European crash tests by independent regulators. The European New Car Assessment Program, or Euro NCAP, awarded its highest rating to Tesla's Model S in a batch of six tests. Cars made by BMW AG, Volkswagen AG, and Nissan Motor Co. also received five stars.
Achieving five stars from Euro NCAP isn't uncommon. Eight of the past 20 cars tested received that rank. But the Model S -- one of the few cars recently tested by Euro NCAP and sold in the U.S. and Western Europe -- is unique in that it also has received a 5-star rating from the National Highway Traffic Safety Administration in the U.S.
---
John D. Stoll contributed to this article.
Credit: By Mike Ramsey
Subject: Automobile production; Electric vehicles; Automobile sales; Company reports; Financial performance; Earnings per share; Stock prices
Location: United States--US Palo Alto California
People: Musk, Elon
Company / organization: Name: Daimler AG; NAICS: 336111; Name: Thomson Reuters; NAICS: 511110, 511140; Name: Tesla Motors Inc; NAICS: 336999
Classification: 3100: Capital & debt management; 5310: Production planning & control; 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2014
Publication date: Nov 6, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1620527421
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1620527421?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Elon Musk's Next Mission: Internet Satellites; SpaceX, Tesla Founder Explores Venture to Make Lighter, Cheaper Satellites
Author: Winkler, Rolfe; Pasztor, Andy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Nov 2014: n/a.
ProQuest document link
Abstract:
The satellite constellation would be 10 times the size of the largest current fleet, managed by Iridium Communications Inc. To be sure, the venture would face large financial, technical and regulatory hurdles, and industry officials estimate that it would cost $1 billion or more to develop the project.
Full text: Billionaire entrepreneur Elon Musk shook up the automotive and aerospace industries with electric cars and cheap rockets. Now, he is focused on satellites, looking at ways to make smaller, less-expensive models that can deliver Internet access across the globe, according to people familiar with the matter.
Mr. Musk is working with Greg Wyler, a satellite-industry veteran and former Google Inc. executive, these people said. Mr. Wyler founded WorldVu Satellites Ltd., which controls a large block of radio spectrum.
In talks with industry executives, Messrs. Musk and Wyler have discussed launching around 700 satellites, each weighing less than 250 pounds, the people said. That is about half the size of the smallest communications satellites now in commercial use. The satellite constellation would be 10 times the size of the largest current fleet, managed by Iridium Communications Inc.
To be sure, the venture would face large financial, technical and regulatory hurdles, and industry officials estimate that it would cost $1 billion or more to develop the project. The people familiar with the matter cautioned the venture is in its formative stages, and Mr. Musk's participation isn't certain.
Messrs. Musk and Wyler are considering building a factory to make satellites, the people said. One of the people said initial talks have been held with state officials in Florida and Colorado about locating the factory.
In addition to Mr. Musk, WorldVu is seeking a satellite industry partner to lend expertise to the project, this person said.
Mr. Musk's closely held Space Exploration Technologies Corp., or SpaceX, likely would launch the satellites, those people said, though no agreement is in place. SpaceX has launched a dozen of its Falcon 9 rockets in the past five years and plans more than four dozen launches through 2018. In September, the company to develop, test and fly space taxis to carry U.S. astronauts into orbit.
Building a plant and testing satellites is a lengthy process, and WorldVu needs to clear the use of spectrum with other operators. SpaceX may not have capacity to launch the satellites until the end of the decade, by which time WorldVu risks losing its spectrum.
A previous satellite Internet startup founded by Mr. Wyler, O3b Networks, has faced technical problems with the first four satellites it launched, which likely will shorten their lifespans. Today, O3b serves large areas on either side of the equator with a constellation of eight satellites and is planning to launch four more by the end of the year. Mr. Wyler has left the company, though he remains a significant shareholder.
One indicator of the challenge: Mr. Wyler brought a similar plan to Google, which prides itself on tackling big problems. Yet he stayed only about a year .
Two people familiar with the matter said Mr. Wyler's relationship with Google soured in part because he wasn't sure the search giant had sufficient manufacturing expertise.
Google declined to comment.
If Messrs. Musk and Wyler choose to build the satellites, they would face competition from other makers of small satellites, such as Nevada-based Sierra Nevada Corp. and Britain's Surrey Satellite Technology Ltd.
Messrs. Musk and Wyler share an interest in reducing the cost of satellites.
WorldVu needs a lot of satellites, and could be the anchor customer for a high-volume, low-cost satellite maker. Mr. Musk changed the economics of launching rockets by simplifying designs while building engines and other components in-house.
The smallest communications satellites now weigh under 500 pounds and cost several million dollars each. WorldVu hopes to bring the cost of manufacturing smaller models under $1 million, according to two people familiar with its plans.
High costs and limited users have hobbled past efforts to deliver telephone and Internet service from space. Iridium filed for bankruptcy protection nine months after it launched in 1998, after attracting few users willing to pay $3,000 for a phone and up to $7 a minute for calls. Rival Globalstar Inc. sought bankruptcy protection in 2002. Both re-emerged as mobile-data providers.
Messrs. Musk and Wyler also may also be able to find willing investors among technology giants. Both Google and FacebookInc. are working to to unwired parts of the globe, through drones, balloons and other means.
Write to Rolfe Winkler at and Andy Pasztor at
Credit: By Rolfe Winkler And Andy Pasztor
Subject: Acquisitions & mergers; Communications satellites; Internet access; Spectrum allocation
Company / organization: Name: Iridium Communications Inc; NAICS: 517210, 517410; Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Google Inc; NAICS: 519130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 7, 2014
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1621411562
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1621411562?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Car Makers, Dealers and Consumers; Tesla is the outfit that is using a direct-sales model that puts them in charge, and the car buyer loses.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Nov 2014: n/a.
ProQuest document link
Abstract:
While the wealthy to whom he caters may be able to buy his product without trading in their current vehicle, average new-vehicle buyers have a trade to dispose of. [...]I believe the fears of most franchised dealers are unfounded.
Full text: Your editorial "Rick Snyder Drives Off the Road" (Oct. 25) about Michigan Gov. Rick Snyder outlawing the Tesla direct-sales approach is wrong-way wrong. Dealers create competition and a more favorable car-buying environment for the consumer. Tesla is the outfit that is using a direct-sales model that puts them in charge, and the car buyer loses.
Gary Leddick
Grand Rapids, Mich.
While Elon Musk may be able to retail some high-dollar vehicles to the high-income buyers he is targeting, there are major differences in how Tesla operates that make his operation different from every franchised dealer. Tesla doesn't appear to take in trades. While the wealthy to whom he caters may be able to buy his product without trading in their current vehicle, average new-vehicle buyers have a trade to dispose of. Therefore, I believe the fears of most franchised dealers are unfounded. As a case in point, in 1998 Ford assembled "collections" of dealerships that they controlled in four metro areas. In August 2001 they announced the end of the experiment. GM also announced that it wouldn't, as previously announced, operate 800 of its own dealerships.
As a franchised dealer in New York, I found it informative to watch the Rochester, New York collection (all eight Ford stores and one Lincoln Mercury) lose market share at an alarming rate, the one measurement you would think they would be able to effect by making sure that they supplied themselves all the "hot" product they needed to make the sales numbers look good. One of the well-known tenets of the automotive business is that the manufacturers are notoriously inept (unprofitable) at running their own dealerships.
Robert J. Gault
President
Gault Chevrolet Co., Inc.
Endicott, N.Y.
Subject: Automobile dealers
Location: Michigan Grand Rapids Michigan
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 7, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1621456410
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1621456410?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla May Run Slow on Cheap Gas; Electric-Car Maker May Have Trouble Meeting Analysts' Expectations
Author: Lahart, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
ProQuest document link
Abstract:
Car dealers were busy last month, with auto makers reporting Tuesday that light-vehicle sales rose to a seasonally adjusted annual rate of 17.2 million from 16.2 million a year earlier.
Full text: Falling gasoline prices don't mean that the Tesla Motors story can't come true. But the tale may take longer to unfold than the market has patience for.
Car dealers were busy last month, with auto makers reporting Tuesday that light-vehicle sales rose to a seasonally adjusted annual rate of 17.2 million from 16.2 million a year earlier. Pump prices probably played a role; historically, lower gasoline costs boost car sales.
But they have also tended to lead Americans to buy less-efficient cars. Indeed, there is evidence this has started to happen: Toyota Motor said sales of its Prius hybrids fell about 14%, year over year.
A Tesla, while an electric vehicle, isn't a Prius. Even if gasoline keeps falling, Silicon Valley millionaires will be lining up to buy its high-price Model S. But Tesla's shares, trading at 80 times forecast 2015 earnings, price in a future where it sells cars that are a lot more Prius-like.
In 2017, Tesla aims to start shipping its Model 3 which, at around $35,000, is slated to cost half of what a basic Model S goes for now. Analysts' models assume Tesla will be selling a lot of these cars by 2020. Barclays, for example, gets to its $220 share-price target for Tesla--less than Tuesday's closing price of $231.43--by forecasting, in part, that Model 3 sales reach 350,000 in 2020.
The longer gasoline stays low, the harder it becomes to believe such forecasts, and the validity of the valuation they support. That won't necessarily make them wrong; nobody can confidently predict where oil prices or attitudes on carbon emissions will be at the end of the decade. But even if the forecasts ultimately turn out to be right, investors may be able to buy Tesla's stock at much lower prices first.
Write to Justin Lahart at
Credit: By Justin Lahart
Subject: Automobile industry; Gasoline prices; Statistical data; Research & development--R & D; Automobile sales
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629450767
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629450767?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Could Run Slow on Cheap Gas
Author: Lahart, Justin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Dec 2014: C.20.
ProQuest document link
Abstract:
Car dealers were busy last month, with auto makers reporting Tuesday that light-vehicle sales rose to a seasonally adjusted annual rate of 17.2 million from 16.2 million a year earlier.
Full text: [Financial Analysis and Commentary]
Falling gasoline prices don't mean the Tesla Motors story can't come true. But the tale may take longer to unfold than the market has patience for.
Car dealers were busy last month, with auto makers reporting Tuesday that light-vehicle sales rose to a seasonally adjusted annual rate of 17.2 million from 16.2 million a year earlier. Prices at the pump probably played a role; historically, lower gasoline costs boost car sales.
But they also have tended to lead Americans to buy less-efficient cars. Indeed, there is evidence that this has started to happen: Toyota Motor said sales of its Prius hybrids fell about 14%, year over year.
A Tesla, while an electric vehicle, isn't a Prius. Even if gasoline keeps falling, Silicon Valley millionaires will be lining up to buy its high-price Model S. But Tesla's shares, trading at 80 times forecast 2015 earnings, price in a future where it sells cars that are a lot more Prius-like.
In 2017, Tesla aims to start shipping its Model 3 which, at around $35,000, is slated to cost half of what a basic Model S goes for now. Analysts' models assume that Tesla will be selling a lot of these cars by 2020. Barclays, for example, gets to its $220 share-price target for Tesla -- less than Tuesday's closing price of $231.43 -- by forecasting, in part, that Model 3 sales reach 350,000 in 2020.
The longer gasoline stays low, the harder it becomes to believe such forecasts, and the validity of the valuation they support. That won't necessarily make them wrong; nobody can confidently predict where oil prices or attitudes on carbon emissions will be at the end of the decade.
But even if the forecasts ultimately turn out to be right, investors may be able to buy Tesla's stock at much lower prices first.
Credit: By Justin Lahart
Subject: Automobile industry; Gasoline prices; Statistical data; Research & development--R & D; Automobile sales
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 3400: Investment analysis & personal finance; 8510: Petroleum industry; 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.20
Publication year: 2014
Publication date: Dec 3, 2014
column: Heard on the Street
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629510923
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629510923?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Furthe r reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Registrations of Tesla Vehicles Jump 152% in October; Registrations From January Through October Still Down 22% From Same Period Last Year
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.
ProQuest document link
Abstract:
The flood of registrations supports Chief Executive Officer Elon Musk's assertion that demand remains strong for Tesla's vehicles and that the decline in sales in the U.S. this year has been a result of shipping cars to Asia and Europe as well as manufacturing shutdowns that limited supplies of new vehicles domestically.
Full text: Tesla Motors Inc. customers registered 2,391 vehicles in October, a 152% increase over the previous year, according to IHS Automotive Inc., as the electric-vehicle maker trucked thousands of cars to waiting customers in the last few weeks of September and into October.
The flood of registrations supports Chief Executive Officer Elon Musk's assertion that demand remains strong for Tesla's vehicles and that the decline in sales in the U.S. this year has been a result of shipping cars to Asia and Europe as well as manufacturing shutdowns that limited supplies of new vehicles domestically. U.S. registrations from January through October are still down 22% from the same period last year to 11,731 despite the leap in October registrations.
Tesla doesn't break out its sales by region and only reports on a quarterly basis, so registration data is the only clear way to see what the company's U.S. sales actually are. During a third-quarter earnings call last month, Mr. Musk said the company would fall 2,000 vehicles short of its 35,000-unit sales goal in 2014, primarily because of slower than expected manufacturing, not a dip in demand.
IHS collects data from each U.S. state when cars are registered. Sometimes there is a slight delay between a sale and the registration of a vehicle.
"There seems to be no evidence of a slowdown in retail demand," said Tom Libby, an analyst with IHS.
Mr. Musk said in October that sales in North America rose 65% in September. However, IHS registrations showed September registrations were down 32% compared with the previous year. Those sales apparently took place near the end of September, causing the registrations to flow into October.
Tesla's share price has been falling for weeks, pinned to negative equity- analyst forecasts, concerns about the profit impact of a delay to its Model X SUV and low fuel prices. Shares Wednesday were down 3.6% to $209.04 in Nasdaq trading.
Write to Mike Ramsey at
Credit: By Mike Ramsey
Subject: Financial performance; NASDAQ trading; Vehicles; Sales
Location: United States--US Europe Asia
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 10, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634798809
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634798809?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla China Chief to Step Down; Veronica Wu to Leave Company in 'Some Days'
Author: Murphy, Colum
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.
ProQuest document link
Abstract:
[...]the company still faces considerable obstacles in growing car sales in China, including difficulties securing permission to install charging units in residential compounds where many of its Chinese customers live.
Full text: SHANGHAI--The chief of Tesla Motors Inc. in China, Veronica Wu, will leave the company in "some days," according to a company official.
Tesla China official Richard Lan confirmed Ms. Wu's resignation but declined to give a reason, citing company policy not to discuss personnel issues.
Ms. Wu had been with the company for more than one year, he said. Ms. Wu couldn't immediately be reached for comment.
Tom Zhu will be responsible for operational leadership in China, Tesla said in a statement. Mr. Zhu currently oversees Tesla's supercharging network in China.
Ms. Wu's departure comes shortly after the resignation of the company's China chief of communications, Peggy Yang.
"Tesla is going very well in China," Mr. Lan said. "We remain confident in the Chinese market."
Tesla has established nine stores and service centers in six major cities in China. But the company still faces considerable obstacles in growing car sales in China, including difficulties securing permission to install charging units in residential compounds where many of its Chinese customers live.
Write to Colum Murphy at
Credit: By Colum Murphy
Subject: Resignations
Location: China
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 12, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635159921
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635159921?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla to Install First Battery Swap Facility; Battery Swaps Would Be Faster Than Charging But Come With Cost
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Dec 2014: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. said Friday in a corporate blog post that it will install its first battery swap facility in California and invite some owners of the Model S electric sedan to participate at a "cost slightly less than a full tank of gasoline for a premium sedan."
Full text: Tesla Motors Inc. said Friday in a corporate blog post that it will install its first battery swap facility in California and invite some owners of the Model S electric sedan to participate at a "cost slightly less than a full tank of gasoline for a premium sedan."
The Silicon Valley-based car company said the battery-swap program, currently a pilot project, will be based in Harris Ranch, Calif. The building where swaps take place will be located near Tesla supercharger stations, at which Model S owners can charge their cars for free.
Instead of charging cars, which powers at a rate of 400 miles of battery life per hour, swapping a battery can take approximately three minutes. Tesla said it hopes to cut the time it takes to remove a battery pack and put in a new one to under one minute in the future.
"Tesla will evaluate relative demand from customers for paid pack swap versus free charging to assess whether it merits the engineering resources and investment necessary," the company said.
Write to John D. Stoll at
Credit: By John D. Stoll
Subject: Automobile industry
Location: California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 19, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638237158
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638237158?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
GM Readies Electric Rival to Tesla; Auto Maker to Show Concept of Family-Size Car That Gets 200 Miles on a Charge
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Jan 2015: n/a.
ProQuest document link
Abstract:
General Motors Co. plans to launch a $30,000 electric vehicle called the Chevrolet Bolt that would be capable of driving 200 miles on a charge by 2017, according to people familiar with the strategy, a move to gain ground on Tesla Motors Inc. GM will show off a concept version of the Bolt on Monday at the Detroit auto show, eight years after the auto giant disclosed it would re-enter the electric car market with the Chevrolet Volt.
Full text: General Motors Co. plans to launch a $30,000 electric vehicle called the Chevrolet Bolt that would be capable of driving 200 miles on a charge by 2017, according to people familiar with the strategy, a move to gain ground on Tesla Motors Inc.
GM will show off a concept version of the Bolt on Monday at the Detroit auto show, eight years after the auto giant disclosed it would re-enter the electric car market with the Chevrolet Volt. The a Volt, on sale since late 2010 and redesigned for 2015, is being upgraded to get better capability and sharper design, and has a backup gasoline motor on board in case juice runs out.
The Chevy Bolt, carrying a more capable battery manufactured by South Korea's LG Chem Ltd., will be aimed squarely at Tesla's forthcoming Model 3, a $35,000 electric car also slated to debut in 2017. The concept version of the electric car will be designed to look more like a so-called crossover vehicle, according to people familiar with the design. The Bolt will be capable of driving four times farther than a Chevrolet Volt plug-in hybrid on a single charge.
GM has thus far struck out in its attempt to match its Silicon Valley rival. Recently, GM launched a $75,000 Cadillac ELR plug-in car that failed to dent Tesla's dominance among luxury electric-vehicle buyers who have clamored for the Model S sedan.
By placing the Bolt in the high-volume Chevrolet line and giving it a name similar to the Volt, executives hope to polish Chevy's image as a full-line vehicle manufacturer prepared to meet demand, regardless of prices at the pump, according to people familiar with the strategy. GM expects the Bolt to compete globally, including in markets such as China. It is unclear if a car similar to the Bolt would be inserted in the Opel, Cadillac or Buick brands down the road.
The Bolt represents the biggest risk taken by Chief Executive Mary Barra since taking GM's helm a year ago. Its development was approved when she was product chief under former CEO Dan Akerson. But U.S. gasoline prices have fallen below $2 a gallon this year, hurting demand for electric cars.
While Tesla has sold relatively few Model S sedans since putting the car on sale in 2012, the Palo Alto, Calif., auto maker's shares have soared on investor hopes for the company's future.
Over Ms. Barra's first year at GM's helm, company shares fell 14% while Telsa shares soared 48%. Ms. Barra aims to have up to 500,000 electrified vehicles--including vehicles with partial-electric capabilities--on the road by 2017. In contrast, Tesla CEO Elon Musk has said he envisions up to 500,000 annual Tesla sales of pure electrics by 2020.
One factor motivating Ms. Barra is meeting regulations in the U.S., Europe and Asia that penalize full-line manufacturers when they sell too high a concentration of trucks and sport-utility vehicles, which are GM's sweet spots. Ms. Barra, however, has insisted the company won't build electric vehicles just "to check a regulatory box."
AutoNation Inc. CEO Mike Jackson, who runs the largest U.S. auto retailer, said a vehicle like the Bolt shows a new attitude atop GM. The auto maker is now making big profits in the U.S. on its new trucks and SUVs in an era of low gas prices making the investment into more capable electric vehicles look more like a moonshot than a sound business decision.
"The old GM would have milked the cash cow until it was dry," Mr. Jackson said in an interview. The new GM, he said, is showing signs that it is willing to take the long view. He estimates electric cars will compose 2% of the U.S. market, at most, in five years. "The industry will lose money on it," he said.
GM's track record with electrics remains spotty. The company shut down EV1 production in 1999, pulling the plug on a $1 billion electric-vehicle program that had impressed regulators but failed to reach commercial viability.
The Volt project started several years later. Heavily hyped by former GM CEOs and legendary product development chief Bob Lutz, the $35,000 car has been a disappointment despite hefty government subsidies.
Less than 90,000 Volts have sold globally since it went on sale in late 2010, and only 1,500 were delivered in December. The introduction of pure electric vehicles, such as Nissan Motor Co.'s Leaf (which achieves 75 miles on a charge), and the relative success of Tesla's pricey but more capable Model S sedan has overshadowed GM's efforts.
The Volt is set for an overhaul in 2015. But it will be a smaller part of GM's strategy than initially expected.
For Ms. Barra and other GM engineers, the Bolt's proposed 200-mile range is critical because it is seen as addressing concerns about range long associated with electric cars, one person involved in the car's development said. "Two hundred miles is seen as some sort of barrier where the notion of range anxiety goes away," this person said.
Tesla has said its Model 3, due in 2017, will achieve about 200 miles on a charge. While less capable than the 85 kwh Model S, Mr. Musk plans to offer the Model 3 at a fraction of the price.
By the time the Bolt and the Model 3 hit the market, an onslaught of competitors, mostly from Europe, are expected to have long-range EVs available. Those cars, which could get more range, will likely be far more expensive than the Chevy.
While the electric car GM plans to build is far bigger than the economy car that has long been rumored, the Bolt will be smaller than Tesla's Model S. The pouch battery cells that LG uses gives the auto maker flexibility to tuck the battery pack into a unique design in the vehicle.
The pack for GM's new vehicle could be built in LG Chem's Holland, Mich., plant, where the Volt batteries currently are made by the same supplier. That plant would have a capacity to build about 60,000 Volt battery packs, or 20,000 of the larger packs for a new EV, or a mixture of the two.
LG Chems's battery improvements to make it possible to for GM to create the low-cost EV include better durability and electrical controls. Also, LG will use more of the available storage capacity in the cell than it does on the Volt. Plug-in hybrids can use less available storage capacity because of the constant charging from the gasoline engine. If more charge is used, it would limit the life of the battery.
"We have progressed far enough that it gives us a high level of confidence that in the 2017 kind of a time frame, there are no show stoppers or gotchas that we don't know how to get over," Prabhakar Patil, the chief executive of LG Chem Power Inc., the U.S.-based battery arm of the Korean electronics giant, said in an interview.
Mike Ramsey contributed to this article.
Credit: By John D. Stoll
Subject: Electric vehicles; Automobile industry; Trucks; Product development; Gasoline prices
Location: United States--US
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Product name: Chevrolet Volt
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 10, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1643745759
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1643745759?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproductio n or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Electric-Car Pioneer Elon Musk Charges Head-On at Detroit; Tesla Motors' CEO Curses, Sweats the Tiniest Details and Wants More Competition
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Jan 2015: n/a.
ProQuest document link
Abstract: None available.
Full text: When Elon Musk, who loudly disdains the traditional auto industry, makes his first public appearance in Detroit in two years on Tuesday, it will be easy to see how much has changed since then.
Mr. Musk's Tesla Motors Inc. is worth six times more in stock-market value. He is pushing hard to sell 500,000 vehicles a year by 2020, up from 90 a day in the third quarter. And giant auto makers are on a collision course with Tesla like never before, with General Motors Co. at the Detroit auto show on Monday.
Mr. Musk's response? He says he doesn't plan to change a thing, from his proclivity for F-bombs to double duty as Space Exploration Technologies Corp., or SpaceX, to a hands-on obsession with the tiniest operational and car-design details at Tesla.
He calls himself a "nano-manager," works about 100 hours a week and still runs the auto maker largely as he did before it sold the .
"I have OCD on product-related issues," he says with a laugh. "I always see what's... wrong. Would you want that? When I see a car or a rocket or spacecraft, I only see what's wrong. I never see what's right. It's not a recipe for happiness."
In a speech Tuesday at , Mr. Musk is expected to criticize larger auto makers for not responding to Tesla even more aggressively. He denounces the rest of the industry as only halfheartedly trying to produce battery-powered cars for the masses, not just early adopters.
More than a decade after launching Tesla, the 43-year-old Mr. Musk has gained lots of believers in his brash, iconoclastic quest to run gas guzzlers off the road. Tesla is in stock-market value, nearly half the Co. GM sold more than 27,000 new vehicles a day in the third quarter--or about 90 every five minutes.
Panasonic Corp. will toward the $5 billion cost of Tesla's new lithium-ion battery factory, under construction in Nevada. The state approved $1.3 billion in for Tesla, among the most ever in the U.S. for any company.
Futuris Automotive is getting a new factory in Newark, Calif., ready to rev up production of seats and headliners for Tesla, which builds its Model S sedans nearby. Headliners are attached to the inside roof of cars.
"We decided to move into the Bay Area because we believe in what Tesla is trying to do," says Sam Coughlin, Futuris's top executive in the U.S. He plans to double the number of jobs at the factory this year, including engineers wooed away from Detroit.
Just 0.3% of the new vehicles registered in the U.S. since the start of 2012 are fully electric-powered, according to IHS Automotive, part of IHS Inc. Tesla had more than 20% of all electric-car sales in that period.
Tesla's growing size is one reason why Audi AG, the premium-car brand owned by Germany's Volkswagen AG, is working on a designed to go 300 miles on an electric charge, according to Audi executives. Tesla plans to start selling its new Model X sport-utility vehicle in the third quarter of 2015.
GM's new Chevrolet Bolt would be aimed directly at Tesla's forthcoming Model 3 and capable of traveling 200 miles with one charge, according to people familiar with the strategy. A concept version of the Bolt will be unveiled at the industry's biggest annual event, the North American International Auto Show, which starts Monday.
The Chevrolet Volt, a plug-in hybrid introduced by GM in 2010, has an electric range of just 38 miles, though next year's model .
Some Tesla investors are jittery, pushing the Palo Alto, Calif., company's share price down more than 10% in the past three months, compared with gains by GM, Ford and major U.S. stock indexes during the same period.
Analysts at some securities firms are worried that the at the pump since April . Tesla shares also are being hurt by concerns that a several-month will make it harder for Mr. Musk to hit the 2020 sales target.
But because of the unwavering intensity of Mr. Musk's determination, investors have flocked to Tesla and shrug off the fact that the auto maker has never made an annual profit. They don't care that the Model S usually sells for more than $100,000, or about double the company's original projection.
In the first nine months of 2014, Tesla had , up 60% from a year earlier. Its net loss grew to $186.4 million from $57.7 million.
"There are a lot of investors whose main thesis is based on Elon Musk and his vision for the future of vehicles," says Colin Langan, an auto-industry analyst at UBS AG. He has a "neutral" rating on Tesla shares.
Cristiano Carlutti is more blunt. He ran Tesla's operations in Europe before leaving in 2011 for Qoros Auto Co., where he is a top executive. Tesla was "driven and is still driven by Elon Musk," says Mr. Carlutti. "You take Elon out of the company, [and] the market cap would go down 80%."
Mr. Musk says the auto maker has "certainly gotten a lot of attention, but we make very few cars, so the effect is small. The value that Tesla can provide is...an example of what is possible."
He said when Tesla stock hit $280 last year that it was . According to the company's , Mr. Musk owns a 27% stake worth about $7.2 billion based on Friday's closing price of $206.66.
With characteristic directness, Mr. Musk admits Tesla has no succession plan. The company also has suffered from growing pains because of his domineering presence.
Some high-level managers quit or were fired after clashing with the chief executive over Mr. Musk's insistence on doing things his way, according to interviews with dozens of current and former Tesla executives.
During the launch of Model S production in 2012, Mr. Musk set up an office in the middle of the factory floor in Fremont, Calif., and took over when hiccups emerged. He told workers to buy USB cables at nearby Fry's Electronics Inc. stores after a snarl delayed a shipment from China.
"If you are fighting a battle, it's way better if you are at the front lines. A general behind the lines is going to lose," he says.
Three weeks before the first Model S was delivered to a customer, Mr. Musk demanded that the sedans have larger rear tires because he felt they looked better, according to people involved in the process. The last-minute design switch also required complicated tweaks to the car's anti-lock braking system and carried the risk of shortening the car's driving range.
Tesla engineers protested that the electronics supplier might not honor its liability warranty if Mr. Musk went through with the bigger tires.
Mr. Musk didn't back down. The engineers did. And the design change went through without a hitch, says someone who was in the room when the decision was made.
Current and former Tesla executives say few people are willing to disagree openly with Mr. Musk. Those who fall out of sync with him often don't stay long. Turnover in the auto industry can be especially problematic because it takes several years to design and roll out new models.
Last month, the chief of Tesla's operations in China, Veronica Wu, after being there for only one year. Tesla hasn't announced the reason for her sudden departure, and she didn't respond to emails or other attempts to contact her.
Mr. Musk "is very, very demanding, and it's not the right speed for a lot of people," says Ricardo Reyes, who as its vice president of public relations and was rehired in November when his successor quit after about six months on the job.
Before that, Tesla went nearly two years without a director of the public-relations department.
The car maker's CEO "pushes really hard, and it's mission driven. It's constant activity," Mr. Reyes adds. "He used to say that he only wanted 'special forces' working for him. No normal people."
Mr. Musk agrees that he can be exacting but denies that he fires employees without reason or cause. "I don't like to fire people. I hate it," he says. "The issue I've had is firing people too late, not too early."
Media relations have been largely handled by Mr. Musk himself, who writes his own tweets and blog posts. Last Monday, on social news forum Reddit Inc., telling readers about a favorite Winston Churchill quote about surmounting adversity: "If you're going through hell, keep going."
In the legal department, Tesla went through three general counsels from 2009 to 2012. It then had no general counsel for more than two years until Mr. Musk promoted his former divorce lawyer, Todd Maron.
Mr. Maron had been Tesla's deputy general counsel. Mr. Musk says the turnover was an aberration, noting that SpaceX has had the same chief counsel for a decade.
Last spring, Tesla pushed out its sales chief in Europe shortly after the company started selling cars there. An executive overseeing Japan and Hong Kong was let go last summer.
George Blankenship, the former Apple Inc. executive who came up with Tesla's , left Tesla in 2013 after his responsibilities were scaled back. He didn't respond to requests for comment.
Tesla's chief engineer quit months before the Model S sedan was launched, while Mr. Musk fired the chief chassis engineer working on the Model X sport-utility vehicle, saying at the time that he asked for the resignation because "there wasn't a good fit for him." Tesla shares fell 17% after the auto maker announced the two departures but then rebounded.
Several people at Tesla say Mr. Musk has looked on and off for years for a chief operating officer who would be the auto maker's second-highest executive. Outsiders approached by Mr. Musk include Andy Palmer, the former chief planning officer at Nissan Motor Co. who in September to become CEO of Aston Martin Lagonda Ltd., a person familiar with the matter says.
Tesla technology chief JB Straubel, chief designer Franz von Holzhausen, business-development chief Diarmuid O'Connell and finance chief Deepak Ahuja have been at Tesla for at least five years and are considered close to Mr. Musk.
But none of them is seen as likely to succeed him. Mr. Musk has indicated that he will stay in the top job for at least four or five more years.
Tesla often spurns job candidates who have "too much automotive experience," says someone recently recruited by the company. During an interview, the person was told that Tesla considered it a major negative to have extensive GM experience on a résumé. Tesla didn't offer the person a job.
People who have worked at Tesla say Mr. Musk's ambition and vision are inspiring. But the hard-charging culture can be exhausting, they say.
Brett Foster, a former Tesla engineer who redesigned faulty retractable door handles on the Model S, recalls a profanity-laced email in mid-2013 in which Mr. Musk prodded managers to soften their communications with lower-level employees. " 'Don't be an a--' was the gist of it," Mr. Foster says. "I actually kind of liked that he did it."
Some managers tried to emulate Mr. Musk's never-say-no style, but "without being as smart as Elon," says Mr. Foster, who didn't interact with the CEO regularly. "I struggled with the culture and am extremely happy I am no longer there." He now works at Samsung Electronics Co.
Ryan Popple, , says Mr. Musk's relentless perfectionism has steered Tesla to where it is today. Mr. Popple, now the chief executive of Proterra Inc., remembers when Mr. Musk demanded that Tesla figure out how to make aluminum body panels for the Model S, rather than hire an outside supplier to do the job.
The process is highly technical, tricky and expensive. "He was the only person in the room who thought it was a good idea," says Mr. Popple. "There were a lot of people, including me, who thought: 'I don't know how this is going to work.' " Mr. Musk responded: "We have to own it."
Tesla now makes all the aluminum body panels it needs in its own factory.
Write to Mike Ramsey at
Credit: By Mike Ramsey
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 12, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644398962
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644398962?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
GM's Plan to Gain on Tesla Rides on Two Electric Cars; 2016 Chevrolet Volt to Go 50 Miles on Charge; 2017 Bolt to Reach 200 Miles
Author: Bennett, Jeff
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Jan 2015: n/a.
ProQuest document link
Abstract:
General Motors Co. is readying a one-two punch in the electric-car market, hoping to emerge from the shadow of Tesla Motors Inc. Later this year, GM plans to introduce a next-generation Chevrolet Volt that sports a new exterior design and room for five passengers.
Full text: General Motors Co. is readying a one-two punch in the electric-car market, hoping to emerge from the shadow of Tesla Motors Inc.
Later this year, GM plans to introduce a next-generation Chevrolet Volt that sports a new exterior design and room for five passengers. More important, it promises that the redesigned 2016 Volt will go 50 miles on a full charge, 30% farther than the current model.
Like its predecessor, the new Volt automatically switches to gasoline when its charge is depleted. The total range of the new model, using gas and electricity, will be 420 miles.
The auto maker also intends to launch a $30,000 all-electric vehicle in 2017 called the Chevrolet Bolt, which would be capable of driving 200 miles on a single charge.
The Bolt will be a direct competitor to Tesla's coming Model 3, a $35,000 electric car that is also slated to make its debut in 2017. GM will have both the Volt production model and a Bolt concept vehicle on display Monday at the North American International Auto Show in Detroit.
The Detroit auto maker so far has struck out in attempting to match Tesla in electric range, even though the Volt outsells its Palo Alto, Calif., rival.
To boost its presence and reach a higher-end clientele, GM recently introduced a $75,000 plug-in Cadillac ELR. The car has failed to dent Tesla's dominance among luxury electric-vehicle buyers, who continue to clamor for the Tesla's Model S sedan.
After GM emerged from bankruptcy in 2009, and with Chief Executive Dan Akerson at the helm, GM's executive team was assigned to pull together a strategy to take on Tesla, according to people familiar with the matter. What emerged was the two-step plan of extending the Volt's range to satisfy near-term customers while giving GM time to perfect the Bolt.
Both cars represent the biggest risk that Mary Barra has taken since she became CEO last January, especially since gasoline prices have fallen below $2 a gallon in many areas this year, hurting demand for electric cars.
Ms. Barra aims to have as many as 500,000 electrified GM vehicles--including battery-powered cars--on the road by 2017. By contrast, Tesla CEO Elon Musk has said he envisions annual sales of 500,000 all-electric Teslas by 2020.
One factor propelling Ms. Barra toward electric vehicles is meeting regulations in the U.S., Europe and Asia that penalize full-line manufacturers when they sell too high a concentration of trucks and sport-utility vehicles, which are GM's sweet spots. Ms. Barra, however, has insisted the company won't build electric vehicles just "to check a regulatory box."
Fewer than 90,000 Volts have sold globally since the model went on sale in late 2010; just 1,500 were delivered in December.
GM's efforts to develop electric cars have been overshadowed by the advent of pure electric vehicles, such as Nissan Motor Co.'s Leaf, which gets 84 miles on a charge, and the relative success of Tesla's pricey but longer-range Model S sedan.
With the new extended-range Volt, GM is trying to overcome consumer' anxiety about the vehicle's getting them to the office and back on a single charge.
The car features a new battery design that allows 20% greater storage than the current model, using 192 cells, rather than 288, making the battery system more than 20 pounds lighter than the current one.
"This is about the most customer-inspired car launched in recent history," said the Volt's executive chief engineer, Pamela Fletcher, who added that the company also collected data from its in-car OnStar communications system that showed how Volt owners as a whole used their vehicles. "We really worked from a clean sheet. This is one of the most-studied group of customers we have had ever."
Volt buyers told GM designers they didn't like wrapping the charger's cord around a plastic holder and storing it under the floor. The new model has no plastic holder. Customers will be able to bunch up the cord and stick it in a netted area in a side panel in the vehicle's rear.
The USB ports also were relocated in the latest model to provide more ease. The cabin is quieter, with heated rear seats and a tone when the charger is plugged, rather than a honking horn.
There has been no word yet on the final look of the Bolt, although the concept version of the electric car will be a hatchback designed to look more like a so-called crossover vehicle, according to people familiar with the vehicle.
John D. Stoll contributed to this article.
Credit: By Jeff Bennett
Subject: Automobile shows; Electric vehicles; Automobile industry; Product introduction
Location: Detroit Michigan
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Product name: Chevrolet Volt
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 12, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644404188
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644404188?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or d istribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: With Electric Cars, GM Targets Tesla
Author: Bennett, Jeff
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Jan 2015: B.2.
ProQuest document link
Abstract:
General Motors Co. is readying a one-two punch in the electric-car market, hoping to emerge from the shadow of Tesla Motors Inc. Later this year, GM plans to introduce a next-generation Chevrolet Volt that sports a new exterior design and room for five passengers.
Full text: General Motors Co. is readying a one-two punch in the electric-car market, hoping to emerge from the shadow of Tesla Motors Inc.
Later this year, GM plans to introduce a next-generation Chevrolet Volt that sports a new exterior design and room for five passengers. More important, it promises that the redesigned 2016 Volt will go 50 miles on a full charge, 30% farther than the current model.
Like its predecessor, the new Volt automatically switches to gasoline when its charge is depleted. The total range of the new model, using gas and electricity, will be 420 miles.
The auto maker also intends to launch a $30,000 all-electric vehicle in 2017 called the Chevrolet Bolt, which would be capable of driving 200 miles on a single charge.
The Bolt will be a direct competitor to Tesla's coming Model 3, a $35,000 electric car that is also slated to make its debut in 2017. GM will have both the Volt production model and a Bolt concept vehicle on display Monday at the North American International Auto Show in Detroit.
The Detroit auto maker so far has struck out in attempting to match Tesla in electric range, even though the Volt outsells its Palo Alto, Calif., rival.
To boost its presence and reach a higher-end clientele, GM recently introduced a $75,000 plug-in Cadillac ELR. The car has failed to dent Tesla's dominance among luxury electric-vehicle buyers, who continue to clamor for the Tesla's Model S sedan.
After GM emerged from bankruptcy in 2009, and with Chief Executive Dan Akerson at the helm, GM's executive team was assigned to pull together a strategy to take on Tesla, according to people familiar with the matter. What emerged was the two-step plan of extending the Volt's range to satisfy near-term customers while giving GM time to perfect the Bolt.
Both cars represent the biggest risk that Mary Barra has taken since she became CEO last January, especially since gasoline prices have fallen below $2 a gallon in many areas this year, hurting demand for electric cars.
Ms. Barra aims to have as many as 500,000 electrified GM vehicles -- including battery-powered cars -- on the road by 2017. By contrast, Tesla CEO Elon Musk has said he envisions annual sales of 500,000 all-electric Teslas by 2020.
One factor propelling Ms. Barra toward electric vehicles is meeting regulations in the U.S., Europe and Asia that penalize full-line manufacturers when they sell too high a concentration of trucks and sport-utility vehicles, which are GM's sweet spots. Ms. Barra, however, has insisted the company won't build electric vehicles just "to check a regulatory box."
Fewer than 90,000 Volts have sold globally since the model went on sale in late 2010; 1,500 were delivered in December.
GM's efforts to develop electric cars have been overshadowed by the advent of pure electric vehicles, such as Nissan Motor Co.'s Leaf, which gets 84 miles on a charge, and the relative success of Tesla's pricey but longer-range Model S sedan.
With the new extended-range Volt, GM is trying to overcome consumer' anxiety about the vehicle's getting them to the office and back on a single charge.
The car features a new battery design that allows 20% greater storage than the current model, using 192 cells, rather than 288, making the battery system more than 20 pounds lighter than the current one.
"This is about the most customer-inspired car launched in recent history," said the Volt's executive chief engineer, Pamela Fletcher, who added that the company also collected data from its in-car OnStar communications system that showed how Volt owners as a whole used their vehicles. "We really worked from a clean sheet. This is one of the most-studied group of customers we have had ever."
Volt buyers told GM designers they didn't like wrapping the charger's cord around a plastic holder and storing it under the floor. The new model has no plastic holder. Customers will be able to bunch up the cord and stick it in a netted area in a side panel in the vehicle's rear.
The USB ports also were relocated in the latest model to provide more ease. The cabin is quieter, with heated rear seats and a tone when the charger is plugged, rather than a honking horn.
There has been no word yet on the final look of the Bolt, although the concept version of the electric car will be a hatchback designed to look more like a so-called crossover vehicle, according to people familiar with the vehicle.
---
John D. Stoll contributed to this article.
Credit: By Jeff Bennett
Subject: Automobile shows; Automobile industry; Product introduction; Electric vehicles
Location: Detroit Michigan
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: General Motors Corp; NAICS: 333415, 336111, 336390
Classification: 9190: United States; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2015
Publication date: Jan 12, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644408826
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644408826?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
GM Bolt Seeks to Rival Tesla; Auto Maker Shows Family Car That Gets 200 Miles on a Charge
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Jan 2015: n/a.
ProQuest document link
Abstract:
General Motors Co. unveiled plans for a $30,000 electric vehicle called the Chevrolet Bolt that would be capable of driving 200 miles on a charge by 2017, a move to gain ground on Tesla Motors Inc. GM showed a concept version of the Bolt on Monday at the Detroit auto show, eight years after the auto giant disclosed it would re-enter the electric car market with the Chevrolet Volt.
Full text: General Motors Co. unveiled plans for a $30,000 electric vehicle called the Chevrolet Bolt that would be capable of driving 200 miles on a charge by 2017, a move to gain ground on Tesla Motors Inc.
GM showed a concept version of the Bolt on Monday at the Detroit auto show, eight years after the auto giant disclosed it would re-enter the electric car market with the Chevrolet Volt. The Volt, on sale since late 2010 and redesigned for 2015, is being upgraded to get better capability and sharper design, and has a backup gasoline motor on board in case juice runs out.
The Chevy Bolt, carrying a more capable battery manufactured by South Korea's LG Chem Ltd., will be aimed squarely at Tesla 's forthcoming Model 3, a $35,000 electric car also slated to debut in 2017. The concept version of the electric car will be a hatchback designed to look more like a so-called crossover vehicle, according to people familiar with the design. The Bolt will be capable of driving four times farther than a Chevrolet Volt plug-in hybrid on a single charge.
GM has thus far struck out in its attempt to match its Silicon Valley rival. Recently, GM launched a $75,000 Cadillac ELR plug-in car that failed to dent Tesla's dominance among luxury electric-vehicle buyers who have clamored for the Model S sedan.
By placing the Bolt in the high-volume Chevrolet line and giving it a name similar to the Volt, executives hope to polish Chevy's image as a full-line vehicle manufacturer prepared to meet demand, regardless of prices at the pump, according to people familiar with the strategy. GM expects the Bolt to compete globally, including in markets such as China. It is unclear if a car similar to the Bolt would be inserted in the Opel, Cadillac or Buick brands down the road.
The Bolt represents the biggest risk taken by Chief Executive Mary Barra since taking GM's helm a year ago. Its development was approved when she was product chief under former CEO Dan Akerson. But U.S. gasoline prices have fallen below $2 a gallon this year, hurting demand for electric cars.
While Tesla has sold relatively few Model S sedans since putting the car on sale in 2012, the Palo Alto, Calif., auto maker's shares have soared on investor hopes for the company's future.
Over Ms. Barra's first year at GM's helm, company shares fell 14% while Telsa shares soared 48%. Ms. Barra aims to have up to 500,000 electrified vehicles--including vehicles with partial-electric capabilities--on the road by 2017. In contrast, Tesla CEO Elon Musk has said he envisions up to 500,000 annual Tesla sales of pure electrics by 2020.
One factor motivating Ms. Barra is meeting regulations in the U.S., Europe and Asia that penalize full-line manufacturers when they sell too high a concentration of trucks and sport-utility vehicles, which are GM's sweet spots. Ms. Barra, however, has insisted the company won't build electric vehicles just "to check a regulatory box."
AutoNation Inc. CEO Mike Jackson, who runs the largest U.S. auto retailer, said a vehicle like the Bolt shows a new attitude atop GM. The auto maker is now making big profits in the U.S. on its new trucks and SUVs in an era of low gas prices making the investment into more capable electric vehicles look more like a moonshot than a sound business decision.
"The old GM would have milked the cash cow until it was dry," Mr. Jackson said in an interview. The new GM, he said, is showing signs that it is willing to take the long view. He estimates electric cars will compose 2% of the U.S. market, at most, in five years. "The industry will lose money on it," he said.
GM's track record with electrics remains spotty. The company shut down EV1 production in 1999, pulling the plug on a $1 billion electric-vehicle program that had impressed regulators but failed to reach commercial viability.
The Volt project started several years later. Heavily hyped by former GM CEOs and legendary product development chief Bob Lutz, the $35,000 car has been a disappointment despite hefty government subsidies.
Fewer than 90,000 Volts have sold globally since it went on sale in late 2010, and only 1,500 were delivered in December. The introduction of pure electric vehicles, such as Nissan Motor Co.'s Leaf, which achieves 84 miles on a charge, and the relative success of Tesla's pricey but more capable Model S sedan has overshadowed GM's efforts.
The Volt is set for an overhaul in 2015. But it will be a smaller part of GM's strategy than initially expected.
For Ms. Barra and other GM engineers, the Bolt's proposed 200-mile range is critical because it is seen as addressing concerns about range long associated with electric cars, one person involved in the car's development said. "Two hundred miles is seen as some sort of barrier where the notion of range anxiety goes away," this person said.
Tesla has said its Model 3, due in 2017, will achieve about 200 miles on a charge. While less capable than the 85 kwh Model S, Mr. Musk plans to offer the Model 3 at a fraction of the price.
By the time the Bolt and the Model 3 hit the market, an onslaught of competitors, mostly from Europe, are expected to have long-range EVs available. Those cars, which could get more range, will likely be far more expensive than the Chevy.
While the electric car GM plans to build is far bigger than the economy car that has long been rumored, the Bolt will be smaller than Tesla's Model S. The pouch battery cells that LG uses gives the auto maker flexibility to tuck the battery pack into a unique design in the vehicle.
The pack for GM's new vehicle could be built in LG Chem's Holland, Mich., plant, where the Volt batteries currently are made by the same supplier. That plant would have a capacity to build about 60,000 Volt battery packs, or 20,000 of the larger packs for a new EV, or a mixture of the two.
LG Chems's battery improvements to make it possible to for GM to create the low-cost EV include better durability and electrical controls. Also, LG will use more of the available storage capacity in the cell than it does on the Volt. Plug-in hybrids can use less available storage capacity because of the constant charging from the gasoline engine. If more charge is used, it would limit the life of the battery.
"We have progressed far enough that it gives us a high level of confidence that in the 2017 kind of a time frame, there are no show stoppers or gotchas that we don't know how to get over," Prabhakar Patil, the chief executive of LG Chem Power Inc., the U.S.-based battery arm of the Korean electronics giant, said in an interview.
Mike Ramsey contributed to this article.
Credit: By John D. Stoll
Subject: Electric vehicles; Automobile industry; Trucks; Product development; Gasoline prices
Location: United States--US Detroit Michigan
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Product name: Chevrolet Volt
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 12, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644515520
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644515520?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced wi th permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Won't Turn Profitable Until 2020; Luxury Electric Car Maker Sees GAAP Earnings When Mass-Market Car In Full Production
Author: Ramsey, Mike; Murphy, Colum
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
ProQuest document link
Abstract:
Making a rare visit to the heart of the U.S. auto industry during the city's annual auto extravaganza, the Silicon Valley executive said Tesla's Model 3 will need to be in full production mode by the end of the decade to turn a profit under generally-accepted accounting principles.
Full text: DETROIT--Tesla Motors Inc. Chief Executive Elon Musk told an auto industry gathering here on Tuesday that his luxury electric-car company won't be profitable on a basis that includes executive compensation and charges until 2020.
Making a rare visit to the heart of the U.S. auto industry during the city's annual auto extravaganza, the Silicon Valley executive said Tesla's Model 3 will need to be in full production mode by the end of the decade to turn a profit under generally-accepted accounting principles. The Model 3 is planned as a cheaper and less capable electric car slotted under the $71,000-and-up Model S sedan and its forthcoming Model X SUV in Tesla's lineup.
The Model 3 is slated to appear in 2017, the same year General Motors Co. aims to launch its Chevrolet Bolt, a fully-electric crossover. Both vehicles are designed to travel up to 200 miles on a single charge, and be priced between $30,000 and $40,000. The Model S often sells above $100,000 with popular options.
Tesla's shares were down 7% in after-hours trading to $189.95.
Mr. Musk, as expected, urged other auto companies to speed the introductions of their electric vehicles. Tesla, currently with volumes around 35,000, should sell "a few million cars" by 2025, he said.
"The need for sustainable transport is incredibly high," he said. "Even in the face of massively declining oil prices I think it only becomes more urgent that the industry advance its development of electric vehicles. It's really just a question of when it goes fully electric, and if it goes sooner that will be good for the world."
To date, Mr. Musk has sold cars directly to consumers, avoiding franchised outlets that nearly all auto makers use. He told the Automotive News World Congress that he would consider dealers at some point, but he won't work with the dealers who "have been jerks."
He will go to Texas, meanwhile, to lobby for the ability to make direct sales. That trip is scheduled for Wednesday.
Dealer associations have fought Tesla's efforts to sell direct in many states.
Mr. Musk earlier on Tuesday told The Wall Street Journal that sales of its electric vehicles in China declined significantly last quarter largely due to "misperceptions" among Chinese consumers about charging requirements for his car.
China, he said "started off being fairly strong...but in the fourth quarter of last year China was not a significant contributor to our sales."
He said Tesla has to correct a misperception among potential buyers in the country that a Tesla is difficult to charge.
He also said the company is working to get on a list of electric car brands in China that qualify for special government support and subsidies. He declined to comment on how talks on the issue were going, saying they were "sensitive" and that he is "hopeful."
The charging issue was one reason why Veronica Wu, the chief of Tesla's China operations, left the company last month after being there for only one year. She was succeeded by Tom Zhu.
"I put the guy that was in charge of supercharger rollout in China in charge of China overall because the question of charging and the perception of charging and making it easy and convenient is our Number One problem," he said, addressing confusion related to why he made a change in Chinese leadership."The guy with the best expertise in charging needs to be running China for us."
Write to Mike Ramsey at and Colum Murphy at
Credit: By Mike Ramsey and Colum Murphy
Subject: Automobile sales; Electric vehicles; Executive compensation; Automobile dealers; Research & development--R & D
Location: China United States--US
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644839777
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644839777?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Corporate News: Tesla Won't Earn Profit Until 2020
Author: Ramsey, Mike; Murphy, Colum
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 Jan 2015: B.4.
ProQuest document link
Abstract:
Making a rare visit to the heart of the U.S. auto industry during the city's annual auto extravaganza, the Silicon Valley executive said Tesla's Model 3 will need to be in full production mode by the end of the decade to turn a profit under generally accepted accounting principles.
Full text: DETROIT -- Tesla Motors Inc. Chief Executive Elon Musk told an auto industry gathering here on Tuesday that his luxury electric-car company won't be profitable on a basis that includes executive compensation and charges until 2020.
Making a rare visit to the heart of the U.S. auto industry during the city's annual auto extravaganza, the Silicon Valley executive said Tesla's Model 3 will need to be in full production mode by the end of the decade to turn a profit under generally accepted accounting principles. The Model 3 is planned as a cheaper and less capable electric car slotted under the $71,000-and-up Model S sedan and its forthcoming Model X SUV in Tesla's lineup.
The Model 3 is slated to appear in 2017, the same year General Motors Co. aims to launch its Chevrolet Bolt, a fully electric crossover. Both vehicles are designed to travel up to 200 miles on a single charge, and be priced between $30,000 and $40,000. The Model S often sells above $100,000 with popular options.
Tesla's shares were down 7% in after-hours trading to $189.95.
Mr. Musk, as expected, urged other auto companies to speed the introductions of their electric vehicles. Tesla, currently with volumes around 35,000, should sell "a few million cars" by 2025, he said.
"The need for sustainable transport is incredibly high," he said. "Even in the face of massively declining oil prices I think it only becomes more urgent that the industry advance its development of electric vehicles. It's really just a question of when it goes fully electric, and if it goes sooner that will be good for the world."
To date, Mr. Musk has sold cars directly to consumers, avoiding franchised outlets that nearly all auto makers use. He told the Automotive News World Congress that he would consider dealers at some point, but he won't work with the dealers who "have been jerks."
He will go to Texas, meanwhile, to lobby for the ability to make direct sales. That trip is scheduled for Wednesday.
Dealer associations have fought Tesla's efforts to sell direct in many states.
Mr. Musk earlier on Tuesday told The Wall Street Journal that sales of its electric vehicles in China declined significantly last quarter largely due to "misperceptions" among Chinese consumers about charging requirements for his car.
China, he said "started off being fairly strong . . . but in the fourth quarter of last year China wasn't a significant contributor to our sales."
He said Tesla has to correct a misperception among potential buyers in the country that a Tesla is difficult to charge.
He also said the company is working to get on a list of electric car brands in China that qualify for special government support and subsidies. He declined to comment on how talks on the issue were going, saying they were "sensitive" and that he is "hopeful."
The charging issue was one reason why Veronica Wu, the chief of Tesla's China operations, left the company last month after being there for only one year. She was succeeded by Tom Zhu.
"I put the guy that was in charge of supercharger rollout in China in charge of China overall because the question of charging and the perception of charging and making it easy and convenient is our Number One problem," he said, addressing confusion related to why he made a change in Chinese leadership.
Credit: By Mike Ramsey and Colum Murphy
Subject: Electric vehicles; Automobile industry; Automobile shows; Luxury automobiles; Profitability
Location: Detroit Michigan
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2015
Publication date: Jan 14, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645048633
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645048633?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission o f copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Shares Skid After Musk's Profit Projections; CEO Said Tesla Motors Wouldn't Be Profitable Until 2020
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2015: n/a.
ProQuest document link
Abstract:
Mr. Musk made the comments at the Automotive News World Congress, an industry event that coincides with the North American International Auto Show in Detroit.
Full text: Tesla Motors Inc. shares were down 6.5% to $190.89 in morning trading after hitting $186 earlier in the session following comments Tuesday by Chief Executive Officer Elon Musk that the.
He also said that demand had slowed inabout the difficulty of charging in the country, an issue he said he was trying to address.
Mr. Musk made the comments at the Automotive News World Congress, an industry event that coincides with the North American International Auto Show in Detroit.
The statements, which came in response to a question about when the company would be profitable, is likely to reset expectations dramatically for the company.
Barclays analyst Brian Johnson, who had forecast profitability from Tesla as soon as this year, wrote in a note to investors that the comments had created a "chill wind" for investors.
Tesla shares have bounced around in the past year, but had reached as high as $280 in September. Prices have fallen consistently since then on a succession of bad news. Tesla reduced its 2014 delivery target from 35,000 to 33,000 because of slower-than-expected manufacturing and then delayed the launch of the Model X by several months.
On Tuesday, Mr. Musk said he "had a problem with punctuality." He said he was overly optimistic about how quickly the vehicle could be developed, particularly with innovations like the falcon wing doors that fold upward from the sides of the electric sport-utility.
Mr. Musk, in his talk Tuesday, said he expected Tesla to sell a "few million" vehicles by 2025 and to build three new assembly plants, including one in Europe, China and the eastern half of the U.S. Reaching several million vehicles also would necessitate several new giant battery factories, though he didn't mention that need.
He said the company could make profits today if it didn't have ambitions to grow so quickly. The huge investments in capital and new product development limit Tesla's ability to make money in the short term.
Write to Mike Ramsey at
Credit: By Mike Ramsey
Subject: Automobile shows; Automobile industry; Factories; Vehicles; Product development
Location: Detroit Michigan
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 14, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645317099
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645317099?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Stares Up Great Wall of Gas Prices; China Worries Are Only Part of Tesla's Troubles
Author: Lahart, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2015: n/a.
ProQuest document link
Abstract:
According to the University of Michigan Transportation Research Institute, the average vehicle sold in December got 25.1 miles per gallon.
Full text: Tesla Motors' big trouble has little to do with China, and everything to do with what's happening at the gasoline pump.
Shares of the electric-car company fell Wednesday after chief Elon Musk told The Wall Street Journal late Tuesday that fourth-quarter sales declined significantly in China on what he termed "misperceptions" on charging requirements for the vehicles. That this should come as a surprise to investors is surprising in itself. The challenges of charging an electric car in China, where most well-heeled consumers live in apartment buildings, are a well-known problem. And when Tesla's head of China operations resigned last month, it should have been clear something was going amiss.
Mr. Musk also said he doesn't expect Tesla will be profitable, under generally accepted accounting principles, until 2020. That, too, shouldn't be surprising given how much the company will need to invest to meet Mr. Musk's expectation that it will sell "a few million cars" by 2025.
Most of those cars will be Tesla's Model 3, the lower-priced vehicle the company plans to launch in 2017. Unlike the $71,000 and up Model S it now sells, and the Model X SUV it will bring out this year, the Model 3's success will hinge on mass-market appeal. And the longer gasoline prices stay low, the less appeal it will have.
For evidence, look to what has been happening of late with U.S. auto sales. According to the University of Michigan Transportation Research Institute, the average vehicle sold in December got 25.1 miles per gallon. That was only slightly above the year-earlier level of 24.9 mpg, marking the smallest gain since August 2011, when U.S. supplies of many Toyota Motor's vehicles were low as a result of Japan's tsunami.
Of course, gasoline prices probably don't factor into the buying decisions of the affluent customers that Tesla is selling to now. Indeed, when Tesla reports fourth-quarter results next month, it may easily clear now-lowered expectations. But it is important to remember pump prices can stay low for a very long time--it took them nearly 20 years to regain the highs the reached in the early 1980s.
Absent a sharp rebound in fuel prices, investors may find Tesla is less than a joy to ride.
Write to Justin Lahart at
Credit: By Justin Lahart
Subject: Gasoline prices; Automobile industry; Vehicles
Location: United States--US China
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: University of Michigan Transportation Research Institute; NAICS: 541711
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 14, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645343269
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645343269?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Overheard: Tesla's Feedback on Profits
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
ProQuest document link
Abstract:
Speaking in Detroit this week, chief Elon Musk said Tesla would probably start showing a profit under generally accepted accounting principles when its forthcoming Model 3 vehicle is in full production.
Full text: When it comes to the question of when it will be profitable, Tesla Motors has offered up a lot of static lately.
Speaking in Detroit this week, chief Elon Musk said Tesla would probably start showing a profit under generally accepted accounting principles when its forthcoming Model 3 vehicle is in full production. Asked when that would be, he said Tesla feels "pretty comfortable saying 2020." Yet analysts forecast Tesla to show such a profit this year. Tesla is now apparently saying the remarks were misinterpreted by the media. Evercore ISI said the company "told analysts and investors not to change their models on the back of this."
It isn't entirely clear in what way Tesla thinks Mr. Musk's comments were misinterpreted. But one thing is: If analysts did factor in such a timeline on profits, reaching their lofty price targets for Tesla's stock would be even harder.
Location: Detroit Michigan
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645789586
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645789586?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla to Roll Out New Models in China; Electric-Car Maker Targets 2016 for Model X Launch
Author: Murphy, Colum
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Jan 2015: n/a.
ProQuest document link
Abstract:
SHANGHAI--Tesla Motors Inc. will roll out new models in China and look to improve its operations there, even as new data added to signs that last year's Chinese performance fell below the electric-car maker's threshold for success.
Full text: SHANGHAI--Tesla Motors Inc. will roll out new models in China and look to improve its operations there, even as new data added to signs that last year's Chinese performance fell below the electric-car maker's threshold for success.
Tesla plans to roll out the dual-motor version of its Model S in China in the coming months and hopes to release its Model X sport-utility vehicle there early next year, said Diarmuid O'Connell, Tesla business-development chief, in an interview on Monday. Mr. O'Connell also said the company would focus on optimizing its sales process and operations in China, though he didn't elaborate.
"We're looking forward to a great new year," he said, adding, "we have a continued commitment to broaden the line and introduce product improvements over time."
Mr. O'Connell's comments came as recently released license-plate registration data analyzed by research firm JL Warren Capital offered the latest sign that Tesla's performance in China last year was below expectations. Just under 2,500 Teslas were registered in the nine months last year when Tesla was delivering its cars to Chinese customers, JL Warren said. In December, 442 Teslas were registered in China, down from 471 in November, it said. Tesla declined to comment on the figures.
A year ago, Tesla Chief Executive Elon Musk told The Wall Street Journal he would consider it a success if Tesla were to sell 5,000 vehicles or more in China in 2014.
In another interview earlier this month, Mr. Musk told the Journal that sales in China had declined significantly in the last quarter of 2014. He said that the company was facing a misperception that charging was difficult in China, and said that the recent appointment of Tom Zhu--a charging expert--to head China operations would help address that issue.
Mr. O'Connell said Tesla plans to "go deeper" in urban areas where the company already has a presence, such as Beijing, Shanghai, Guangzhou and Shenzhen. He also said the company would roll out more sales and service centers but didn't disclose specifics.
Junheng Li, head of research at JL Warren Capital, said Chinese car buyers perceive Tesla differently from those in developed markets. "In China, most buyers view Model S as a status symbol and a display of wealth and coolness," she said, referring to Tesla's all-electric sedan. "There are many competing ways to show wealth and the cool factor is by definition short-lived."
"We didn't design a fashion item," said Mr. O'Connell, adding that the company is witnessing "durable and continuing" growth in China.
Long Huanyi, a marketing executive at an auto-parts company, said he used to long for a Tesla. But since then, his enthusiasm has waned. "Due to a lack of sufficient charging stations, it's not very convenient to own a Tesla," said Mr. Long. "The advantages of driving a Tesla over conventional gasoline cars cannot be fully realized in China," he said.
Jerry Zhao, a sales manager for imported-car seller Kunze Auto Sales in Shanghai, said his company had sold about 10 Teslas in the months after sales kicked off last April. "At the beginning, everyone wanted a Tesla," said Mr. Zhao, who said customers now are worried about charging and running out of power on longer trips. "But now everyone wants a discount."
Mr. Zhao said he thinks Tesla's problem is that it is ahead of its time. "It's a car for the future," he said.
Rose Yu contributed to this article.
Write to Colum Murphy at
Credit: By Colum Murphy
Subject: Research & development--R & D
Location: China
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 26, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648064224
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648064224?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
High-End Malls Get Boost From High-Tech Stores; Apple, Microsoft and Tesla Shops Draw Customers, Help Drive Malls' Bottom Lines
Author: Whelan, Robbie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Jan 2015: n/a.
ProQuest document link
Abstract:
Malls owned by real-estate investment trusts, which tend to have more luxury tenants and often are located in large population centers, generated a record $550 in per-square-foot sales in the third quarter of 2014, shattering the previous high of $450 a square foot reached in 2007, according to REIT research firm Green Street Advisors. In all, REITs that own regional malls produced a total return of 35% in 2014, including dividends, according to the National Association of Real Estate Investment Trusts, second only to apartments and health-care properties among the big REIT categories.
Full text: BELLEVUE, Wash.--The nation's high-end malls are posting record sales, thanks in part to the growing presence of technology retailers that sell pricey goods.
At Bellevue Square, a shopping center in this affluent Seattle suburb, electric car maker Tesla Motors Inc. produced sales of $5,500 per square foot last January, more than five times the mall's average and at a pace the mall's owners say is likely a U.S. record for any retailer.
At a time when some big department stores are struggling and Internet shopping is on the rise, the mall industry is doing surprisingly well. Sales have risen each year since the recession, from $383 per square foot in 2009 to an estimated $478 in 2014, says the International Council of Shopping Centers.
Malls owned by real-estate investment trusts, which tend to have more luxury tenants and often are located in large population centers, generated a record $550 in per-square-foot sales in the third quarter of 2014, shattering the previous high of $450 a square foot reached in 2007, according to REIT research firm Green Street Advisors.
No one tracks sales per square foot across all retail stores. But landlords say a big driver of malls' recent resurgence has been a new generation of technology-focused tenants, such as Tesla, Apple Inc. and Microsoft Inc., that are ringing up strong sales and supplanting "anchor" department stores that malls used to rely on to bring in customers. Tesla and Apple declined to disclose figures for their stores. Microsoft couldn't be reached for comment.
"They do very high volumes," said Peter Lowy, co-chief executive of Westfield Corp., of the high-tech tenants. Westfield has 16 Apple stores, six Tesla locations and six Microsoft stores in its 38 U.S. malls. "Your company's sales per square foot are really boosted by those tenants."
General Growth Properties Inc., the nation's second-largest mall operator, said Apple's rollout of the iPhone 6 was a main driver of its 6.7% increase in September monthly sales. Without Apple, sales would have risen only 4%, Chief Executive Sandeep Mathrani told analysts in October.
Some traditional mall anchors like J.C. Penney Co. and Sears Holdings Inc. are in a prolonged slump. J.C. Penney suffered a per-square-foot sales decline of 30% from 2010 to 2013, the most recent year for which data are available, according to investment bank Imperial Capital. Sears doesn't report average sales per square foot, but sales at stores open at least a year have fallen by a cumulative 12.1% since 2010, according to investment bank Evercore ISI.
Yet for malls overall, the trend is moving the other way: Sales per square foot among mall REITs are up 36% since 2010, according to Green Street. That is a sign that mall owners are pruning their portfolios of less-productive properties while filling vacant spaces with more-productive retailers, including high-tech tenants.
The new tenants tend to be far more profitable for malls than anchor stores because, under typical lease agreements, they are required to share a percentage of their sales with their landlords.
Anchor tenants, by contrast, typically own their spaces outright, though they often contribute fees to help maintain common spaces. They serve mall owners mainly by attracting shoppers to the smaller retailers between the anchors, known as "inline" stores.
Investors have benefited from malls' resurgence. In all, REITs that own regional malls produced a total return of 35% in 2014, including dividends, according to the National Association of Real Estate Investment Trusts, second only to apartments and health-care properties among the big REIT categories.
High-tech stores have helped malls fend off the Internet challenge as well.
The share of retail sales completed online has risen steadily, from 4% in the third quarter of 2009 to 6.6% in the third quarter of 2014, according to the most recent data available from the National Retail Federation.
One reason malls have held steady: Merchants such as Tesla, Apple and the like "show how the malls have stayed very relevant," says Alexander Goldfarb, a REIT analyst with Sandler O'Neill + Partners.
High-tech tenants are a recent phenomenon. Over the past decade, the number of Apple stores in North American malls has grown to 219 from just a handful. Microsoft has opened 70 store locations in malls since 2009 and Tesla 25 since 2008, according to Green Street.
In Bellevue, the affluent suburb east of Seattle filled with large houses and a central business district with a host of shiny new office buildings under construction, Bellevue Square is the city's most prominent shopping center. The town's median household income was $88,073 in 2012, about 73% higher than the national median.
Tesla's $5,500 in sales per square foot last January shows how lucrative high-tech tenants can be.
Yet it wasn't a fluke, says Kemper Freeman, chairman of Kemper Development Co., the family-run company that has owned Bellevue Square since it was built at the end of World War II. The store also was the highest-producing tenant in the mall for the rest of the year on a sales-per-square-foot basis.
Overall, including Tesla, the mall produced $1,071 in sales per square foot for all of 2013, up from $842 in 2012, according to the company. In its best-performing month in 2014, Bellevue Square's Apple store produced about $1,500 per square foot, Mr. Freeman said. Tesla opened its store there in November 2011, a year after Microsoft opened its store.
Nationwide, the highest-quality U.S. malls produced $666 in average sales per square foot in 2013, according to Green Street.
Tesla isn't the only high-tech attraction at the mall. Last January, sales at the mall's 12,000-square foot Apple Store matched the same dollar volume as one of its largest anchors with more than 250,000 square feet of space. And three weeks ago, a store by specialty photography brand Leica opened, selling digital cameras for up to $22,000 apiece.
"In the old days, a few major anchors paid the rent," Mr. Freeman said. "The inline stores are, at this point, subsidizing the main stores."
Karen Busto, an executive at a company in Mexico City that distributes automotive lubricants, visited the Tesla store with a colleague during a shopping break on a business trip. She said the store's mall location made perfect sense to her because it would give the cars more exposure and allow curious customers to stop in and learn more.
"Enthusiasts who love this kind of thing, for them it's fantastic to have this type of store here," she said. "It's more personal than going to a dealership."
Write to Robbie Whelan at robbie.whelan@wsj.com
Credit: By Robbie Whelan
Subject: Shopping centers; REITs; Retailing industry; Investments; Retail stores; Department stores
Location: United States--US
People: Mathrani, Sandeep
Company / organization: Name: Microsoft Corp; NAICS: 511210, 334614; Name: Sears Holdings Corp; NAICS: 452111, 452112, 454111, 551114; Name: Westfield Corp; NAICS: 531210; Name: General Growth Properties Inc; NAICS: 531120, 531130, 237210; Name: J C Penney Co Inc; NAICS: 446110, 452111, 454113, 551112; Name: International Council of Shopping Centers; NAICS: 813910; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 27, 2015
Section: Real Estate
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New Y ork, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648431672
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648431672?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla's Growth Is a Matter of Survival
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Feb 2015: n/a.
ProQuest document link
Abstract:
Wednesday's full-year results call should provide guidance on the delayed launch of the mass-market Model X, expected later this year, and financial targets.
Full text: Tesla Motors Inc. is really in rarefied territory now.
That doesn't refer only to its market value, which is nearly half that of General Motors Co. The dual-motor version of Tesla's Model S has been clocked accelerating to 60 miles an hour at a faster pace than the legendary McLaren F1. The latter was the world's fastest production car until a decade ago, and used ones fetch millions of dollars.
That is impressive, but it raises the question of whether Tesla the company can handle its speedy growth. In November, when reporting third-quarter results, management wrote that planned 50% unit growth in 2014 and again in 2015 is "unusual in the car industry." No kidding.
Wednesday's full-year results call should provide guidance on the delayed launch of the mass-market Model X, expected later this year, and financial targets. Even before hearing from management, the first two numbers investors will focus on are Model S deliveries and earnings per share.
Although expected earnings of 56 cents for 2014 would be down from 78 cents the prior year, the result would mark a second consecutive year in the black.
But that is on an adjusted, pro-forma basis. The company's reported result will be negative, as it always has been. The gap is due to differences in the treatment of share compensation, leases and nearly $3 billion in convertible notes.
Those securities, which can be converted into stock at various share prices, get surprisingly little notice. The higher the stock price, currently about $217, goes over the next six years, the more dilution of existing shareholders that occurs as the securities are converted from debt into equity.
That's a high-class problem, naturally. If the stock doesn't appreciate by at least 160% in that time, though, Tesla could have to repay or refinance a big slug of the convertible notes. It would be challenging.
True, the stock has risen 460% over the past two years. Yet, in the past 12 months, the company produced only $158 million in cash flow. So the success of its mass-market model and battery-producing "Gigafactory" are necessary not just for growth but for survival. It's enough for even Tesla's biggest fans to recheck their seat belts.
Write to Spencer Jakab at spencer.jakab@wsj.com
Credit: By Spencer Jakab
Subject: Earnings per share; Financial performance
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Tesla Motors Inc; NAICS: 336999
Product name: McLaren F1
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 10, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652861780
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652861780?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla's Loss Widens as Spending Increases; Electric-Car Maker Says Demand Remains Strong for Model S Sedans
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Feb 2015: n/a.
ProQuest document link
Abstract:
[...]about 1,400 vehicles slipped December and were delivered in Q1," said Elon Musk, the chief executive officer, in a note to shareholders.
Full text: Tesla Motors Inc. said its fourth-quarter loss widened to $108 million as deliveries fell short of its already tempered forecast.
The Palo Alto, Calif.-based maker of luxury electric cars missed analyst expectations for adjusted per-share earnings by a wide margin. They had been forecast to earn 31 cents per share, adjusting for stock-based compensation and lease-accounting methods, but actually lost 16 cents on that basis.
Shares of Tesla fell nearly 3% in after-hours trading.
The auto maker said demand remained strong for its Model S sedan and that it had 10,000 orders booked for cars and 20,000 orders for the forthcoming Model X SUV. Overall, Tesla expected global sales of 55,000 in 2015.
Tesla, however, blamed a spike in demand for its all-wheel-drive variant, the P85D, for a lag between production and deliveries that lowered sales in the quarter. It also said a strong U.S. dollar lowered results.
Tesla sold 9,834 vehicles in the fourth quarter, up from 6,892 a year ago and 7,785 in the third quarter. For the year, Tesla delivered 32,733 vehicles, just shy of its already lowered volume projection of 33,000 for the year. Revenue in the fourth quarter jumped to $956.6 million from $615 million a year earlier.
"While we were able to recover the lost production by end of the quarter, delivering those cars was physically impossible due to a combination of customers being on vacation, severe winter weather and shipping problems (with actual ships). As a result, about 1,400 vehicles slipped December and were delivered in Q1," said Elon Musk, the chief executive officer, in a note to shareholders.
Mr. Musk stunned investors in January at a conference in Detroit where he said the company likely wouldn't attain net profits until 2020, when the company's forthcoming Model 3 sedan would be in full production. At the same conference, he estimated that Tesla could be selling more than a million cars a year by 2025.
"I think we are doing OK. Tesla has certainly gotten a lot of attention, but we make very few cars, so the actual effect is very small," he said last month in an interview with The Wall Street Journal. "The value that Tesla can provide is serving by an example of what is possible. I am quite certain that all transport other than rockets, will go fully electric long-term. The question is: When?"
Mr. Musk made it clear that he was more interested in growth and accelerating the move to electric vehicles than in turning a profit in the short term. He had visited Detroit to urge other car makers to take electric vehicles more seriously.
Tesla said its 2015 capital spending is expected to be about $1.5 billion as it expands production capacity, completes Model X development and invests in the Gigafactory, stores and service centers. Tesla said it is on track to start producing some batteries at the plant, near Reno, Nev., in 2016. Tesla's cash supply fell to $1.9 billion in the quarter, down from $2.4 billion at the end of the third quarter.
Total operating expenses nearly doubled to $336.5 million in the December quarter from a year ago.
Over the past 12 months, Tesla's stock has bounced around, hitting $291.42 in September and falling as low as $177.22 in January, following his comments about China and future profits. It closed at $212.80 on Wednesday.
Since Tesla last reported its results, Mr. Musk has declared that sales in China have slowed significantly, blaming it on poor communication about the availability of charging infrastructure. The China Chief, Veronica Wu, left the company in December after a one-year tenure.
Analysts have been lowering their expectations for the stock price and delivery forecasts. Brian Johnson, the senior analyst for Barclays, said in a note that Tesla's attempt to "cross the chasm," a term coined in Geoffrey Moore's book focusing on new technology companies making it to the mainstream, appeared to be harder than originally thought.
In addition to tepid demand in China, which Tesla has forecast to account for a third of its sales, low gas prices might be taking steam out of its demand. Furthermore, delays on its Model X SUV, which won't be delivered until third quarter, mean it will take longer to hit sales goals than expected. For the year, Asia as a region supplied 15% of Tesla's sales. Europe accounted for 30%.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Research & development--R & D; Financial performance; Production capacity; Electric vehicles
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 11, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654430205
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654430205?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla's Loss Widens as Deliveries Fall Short; Electric-Car Maker Says Demand Remains Strong for Model S Sedans
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Feb 2015: n/a.
ProQuest document link
Abstract:
Over the past 12 months, Tesla's stock has bounced around, hitting $291.42 in September and falling as low as $177.22 in January, following his comments about China and future profits. Since Tesla last reported its results, Mr.\n
Full text: Elon Musk said all is well with Tesla Motors Inc. and predicted brighter days in 2015, even as the company reported that its fourth-quarter loss widened to $108 million, missing analysts' forecasts, as deliveries of its $71,000-and-up luxury electric cars fell short of an already lowered forecast because of weather and customers unable to accept deliveries.
The car maker, based in Palo Alto, Calif., posted a loss of 13 cents a share, below analysts' consensus expectations for a 31-cent-a-share profit, both adjusted to exclude stock-based compensation and other costs.
Tesla said Wednesday that while demand remained strong for its Model S sedan, shipment problems affected deliveries and the strong dollar also hurt results. The company had 10,000 orders booked for cars and 20,000 orders for a coming sport-utility vehicle called the Model X.
Tesla said it expects global sales of 55,000 vehicles in 2015.
Speaking to investors after release of the results on Wednesday, Mr. Musk, the company's chief executive, said "our financials are better than they appear, not worse." He mused that the company's market cap in 10 years could approach that of Apple Inc.'s if its growth stayed on track and that he could plow a "staggering amount of money" into capital spending without raising much from capital markets.
Tesla said it was unable to deliver about 1,400 vehicles that were produced in December, reducing its revenue and profit. It cited heavy demand for the newly released all-wheel-drive version of its Model S.
Tesla sold 9,834 vehicles in the fourth quarter, up from 6,892 a year earlier and 7,785 in the third quarter. For the year, Tesla delivered 32,733 vehicles, just shy of its lowered volume projection of 33,000. Revenue in the fourth quarter jumped to $956.6 million from $615 million a year earlier. The year-earlier net loss was $16 million, or 13 cents a share.
Operating expenses nearly doubled from a year earlier to $336.5 million in the quarter. Its cash fell to $1.9 billion in the quarter, down from $2.4 billion at the end of the third quarter.
Shares of Tesla plunged 6% to $199.22 in early trading on Thursday after closing off $3.49 at $212.80 on Wednesday, before its results were released.
Analysts at JP Morgan, Deutsche Bank and Barclays pointed to problems that went beyond the weather and vacation periods that the company blamed on lower-than-expected deliveries and profits in the fourth quarter. Tesla's revenue included $55 million in sales of pollution tax credits to other auto makers.
Mr. Musk startled investors in January when he said the company likely wouldn't achieve a net profit until 2020, when the company's coming Model 3 sedan would be in full production. At the same Detroit conference, he estimated that Tesla could be selling more than a million cars a year by 2025.
On Wednesday, Mr. Musk tried to reassure investors that free cash flow would be significant by 2020, even if the company wasn't making net profits.
Tesla said its 2015 capital spending is expected to be about $1.5 billion as it expands production capacity, completes Model X development and invests in an advanced battery factory, showrooms and service centers. The company said it is on track to start producing some batteries at its so-called Gigafactory near Reno, Nev., in 2016.
Over the past 12 months, Tesla's stock has bounced around, hitting $291.42 in September and falling as low as $177.22 in January, following his comments about China and future profits.
Since Tesla last reported its results, Mr. Musk has declared that sales in China have slowed significantly, blaming poor communications about the availability of charging infrastructure. The company's top China executive left Tesla in December after a one-year tenure.
Mr. Musk said the concern about a drop in China sales was "overblown" and that the lack of demand was "irrelevant," because there weren't enough cars available in other markets.
Analysts have been lowering their expectations for the stock price and delivery forecasts. Brian Johnson, a Barclays auto analyst, said in a note that its fourth quarter results were "heavily supported" by emission credits the company sells to other auto makers. Tesla's attempt to "cross the chasm," a term from Geoffrey Moore's book on technology companies making it to the mainstream, appears to be harder than originally thought, he wrote.
In addition to tepid demand in China, which Tesla has forecast to account for a third of its sales, low gasoline prices might be taking steam out of demand. Delays developing its Model X SUV, which won't be delivered to customers until the third quarter, mean it will take longer to hit sales goals than expected. For the year, Asia as a whole supplied 15% of Tesla's sales. Europe accounted for 30%.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Net losses; Financial performance; Corporate profits; Production capacity; Vehicles; Investments; Capital expenditures
Location: Palo Alto California
Company / organization: Name: Apple Inc; NAICS: 511210, 334111, 334220; Name: Deutsche Bank AG; NAICS: 522110, 551111; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 12, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654450444
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654450444?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Corporate News: Tesla Loss Widens on Delivery Glitch
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Feb 2015: B.2.
ProQuest document link
Abstract:
Over the past 12 months, Tesla's stock has bounced around, hitting $291.42 in September and falling as low as $177.22 in January, following his comments about China and future profits. Since Tesla last reported its results, Mr. Musk has declared that sales in China have slowed significantly, blaming poor communications about the availability of charging infrastructure.
Full text: Elon Musk said all is well with Tesla Motors Inc. and predicted brighter days in 2015, even though the company's fourth-quarter loss widened to $108 million, missing analysts' forecasts, as deliveries of its $71,000-and-up luxury electric cars fell short of a reduced forecast due to weather and customers unable to accept deliveries.
The car maker, based in Palo Alto, Calif., posted a loss of 13 cents a share, below analysts' consensus expectations for a 31-cent-a-share profit, both adjusted to exclude stock-based compensation and other costs.
Tesla said Wednesday that while demand remained strong for its Model S sedan, shipment problems affected deliveries and the strong dollar also hurt results. The company had 10,000 orders booked for cars and 20,000 orders for a coming sport-utility vehicle called the Model X.
Tesla said it expects global sales of 55,000 vehicles in 2015.
Speaking to investors after release of the results Wednesday, Mr. Musk, Tesla's chief executive, said "our financials are better than they appear, not worse." He mused that the company's market cap in 10 years could approach that of Apple Inc.'s if its growth stayed on track and that he could plow a "staggering amount of money" into capital spending without raising much in capital markets.
Tesla said it was unable to deliver about 1,400 vehicles that were produced in December, reducing its revenue and profit. It cited heavy demand for the newly released all-wheel-drive version of its Model S.
Tesla sold 9,834 vehicles in the fourth quarter, up from 6,892 a year earlier and 7,785 in the third quarter. For the year, Tesla delivered 32,733 vehicles, just shy of its lowered volume projection of 33,000. Revenue in the fourth quarter jumped to $956.6 million from $615 million a year earlier. The year-earlier net loss was $16 million, or 13 cents a share.
Operating expenses nearly doubled from a year earlier to $336.5 million in the quarter. Its cash fell to $1.9 billion in the quarter, down from $2.4 billion at the end of the third quarter.
Shares of Tesla fell nearly 3% in after-hours trading after closing off $3.49 at $212.80 in 4 p.m. Nasdaq trading.
Tesla's results could have been worse, if not for $55 million in sales of pollution tax credits to other auto makers.
Mr. Musk startled investors in January when he said the company likely wouldn't achieve a net profit until 2020, when the company's coming Model 3 sedan would be in full production. At the same Detroit conference, he estimated that Tesla could be selling more than a million cars a year by 2025.
On Wednesday, Mr. Musk tried to reassure investors that free cash flow would be significant by 2020, even if the company wasn't making net profits.
Tesla said its 2015 capital spending is expected to be about $1.5 billion as it expands production capacity, completes Model X development and invests in an advanced battery factory, showrooms and service centers. The company said it is on track to start producing some batteries at its so-called Gigafactory near Reno, Nev., in 2016.
Over the past 12 months, Tesla's stock has bounced around, hitting $291.42 in September and falling as low as $177.22 in January, following his comments about China and future profits.
Since Tesla last reported its results, Mr. Musk has declared that sales in China have slowed significantly, blaming poor communications about the availability of charging infrastructure. The company's top China executive left Tesla in December after a one-year tenure.
Mr. Musk said the concern about a drop in China sales was "overblown" and that the lack of demand was "irrelevant," because there weren't enough cars available in other markets.
Analysts have been lowering their expectations for the stock price and delivery forecasts. Brian Johnson, the senior analyst for Barclays, said in a note that its fourth quarter results were "heavily supported" by emission credits the company sells to other auto makers. Tesla's attempt to "cross the chasm," a term from Geoffrey Moore's book on tech companies making it to the mainstream, appears to be harder than originally thought, he wrote.
In addition to tepid demand in China, which Tesla has forecast to account for a third of its sales, low gasoline prices might be taking steam out of demand. Delays developing its Model X SUV, which won't be delivered to customers until the third quarter, mean it will take longer to hit sales goals than expected. For the year, Asia as a whole supplied 15% of Tesla's sales. Europe accounted for 30%.
Credit: By Mike Ramsey
Subject: Net losses; Financial performance; Corporate profits; Production capacity; Vehicles; Investments; Capital expenditures
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2015
Publication date: Feb 12, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654553979
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654553979?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla: The Road to Riches Is Littered With Potholes; Fourth-Quarter Miss Raises Questions About Car Maker's Ability to Ramp Up Production
Author: Lahart, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Feb 2015: n/a.
ProQuest document link
Abstract:
[...]if lower pump prices might be affecting the well-heeled customers who buy the vehicles the company now has on offer, what might they mean for the mass-market model Tesla plans to release in 2017?
Full text: When Tesla Motors reported fourth-quarter results late Wednesday that fell short of expectations, it gave several explanations that investors have heard from many other companies, and one that was completely new.
There was severe weather, shipping problems and the effect of the strong dollar, all the old standbys. And then there was the problem of customers being away on vacation in December, and therefore not available to take delivery of their new electric cars.
So the 9,834 vehicles that Tesla delivered came in below what analysts had estimated, as well as the number of cars it actually built during the quarter. Revenue missed, too. The company made a loss of 13 cents a share, excluding stock-based compensation and some other costs, versus a consensus expectation that it would earn a profit of 31 cents.
All these problems might come out in this year's wash. Tesla said that 1,400 deliveries it planned to make in December were instead done in the first quarter. But until investors see the first-quarter figures, the possibility that the recent decline in gasoline prices has cut into demand for the company's cars will hang in the air. And if lower pump prices might be affecting the well-heeled customers who buy the vehicles the company now has on offer, what might they mean for the mass-market model Tesla plans to release in 2017?
The greater concern may be how smoothly Tesla will be able to scale up production to the levels it must reach to justify the stock's triple-digit multiple of forward earnings. The operational problems it encountered in the fourth quarter came on top of a third quarter when downtime in its Fremont, Calif., production facility ran longer than planned, and the company also pushed the release of its Model X SUV back to the third quarter of this year.
Indeed, while Tesla shipped nearly 3,000 more cars in the fourth quarter than it did a year earlier, analysts are looking for it to ship something on the order of 10 times as many cars per quarter by 2020. And that will have to be done, at relatively high profit margins, even as big competitors ranging from General Motors to BMW launch and refine rival vehicles.
To justify its current valuation, let alone some of Wall Street's lofty targets, Tesla must pull all this off while avoiding production snafus. If such a tall order wasn't being questioned already, the last two quarters should change that.
Write to Justin Lahart at justin.lahart@wsj.com
Credit: By Justin Lahart
Subject: Automobiles; Investments
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: General Motors Corp; NAICS: 336111, 333415, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 12, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654735579
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654735579?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
The Tesla Paradox; Visions of a $700 billion market cap but still living off subsidies.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Feb 2015: n/a.
ProQuest document link
Abstract:
A Barclays analyst told the Journal that the fourth-quarter results were "heavily supported" by the credits. Because it produces only electric cars, Tesla receives excess "credits" for complying with federal fuel-efficiency standards and state zero-emission vehicle (ZEV) mandates, notably in California.
Full text: Elon Musk isn't known for modesty, and this week the Tesla Motors CEO laid out his ambition to grow 50% a year and deliver a stock valuation in 10 years of $700 billion--the current valuation of Apple, the world's most valuable company. So why does Tesla, which is already valued at about $27 billion, still need so much taxpayer welfare?
Mr. Musk this week played down a $108 million loss in Tesla's fiscal fourth quarter, which he attributed to one-time manufacturing inefficiencies, a strong dollar and lower than expected deliveries. Tesla said delivering some "cars was physically impossible due to a combination of customers being on vacation, severe winter weather and shipping problems (with actual ships)." Tesla shares fell 4.66% Thursday on the news.
The world loves an optimist, and fast-growing start-ups often lose money as they focus on capital investment. What makes Tesla different is that the bottom line would have been much worse without $86 million in profits from the sale of government emissions credits. A Barclays analyst told the Journal that the fourth-quarter results were "heavily supported" by the credits.
Because it produces only electric cars, Tesla receives excess "credits" for complying with federal fuel-efficiency standards and state zero-emission vehicle (ZEV) mandates, notably in California. Tesla can then hawk its surplus credits to auto makers that fail to meet the government rules. Last year Tesla made a roughly $150 million killing from selling ZEV credits. That's up from $130 million in 2013, $32 million in 2012, and $3 million in 2011. All told in 2014 Tesla sold about $216 million in credits, equal to about 7% of its auto sales.
Those government subsidies come on top of a $7,500 federal tax credit for each electric car sale and state rebates. Nevada and California have also bestowed upward of $1.5 billion in tax breaks on Tesla.
A Tesla earnings report last year predicted that revenue from credits would "remain low in the future relative to our automotive sales" though it would "pursue opportunities to monetize ZEV credits." Such opportunities will abound as California's ZEV and federal fuel-efficiency mandates grow more stringent. More states are also adopting electric-car mandates.
Capitalism needs visionaries, but its reputation suffers when companies worth billions soak middle-class taxpayers for profits. Turn off the taxpayer tap, Mr. Musk. It would earn you more friends for the long haul.
Subject: Automobile industry; Profits; Energy efficiency
Location: California
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 13, 2015
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654787758
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654787758?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Apple Gears Up to Challenge Tesla in Electric Cars; IPhone Maker Has 100s Working on Design of a Minivan Like Vehicle
Author: Wakabayashi, Daisuke; Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Feb 2015: n/a.
ProQuest document link
Abstract:
Apple executives have flown to Austria to meet with contract manufacturers for high-end cars including the Magna Steyr unit of Canadian auto supplier Magna International Inc. A Magna spokeswoman declined to comment.
Full text: Apple Inc. has revolutionized music and phones. Now it is aiming at a much bigger target: automobiles.
Apple has several hundred employees working secretly toward creating an Apple-branded electric vehicle, according to people familiar with the matter. They said the project, code-named "Titan," has an initial design of a vehicle that resembles a minivan, one of these people said.
An Apple spokesman declined to comment.
Apple may decide not to proceed with a car. In addition, many technologies used in an electric car, such as advanced batteries and in-car electronics, would be useful to other Apple products, including the iPhone and iPad. Apple often investigates technologies and potential products, going as far as building multiple prototypes for some things that it won't ever sell. Any product would take several years to complete and obtain safety certifications.
But the size of the project team and some of the people assigned to it indicate that the company is serious, these people said. Apple executives have flown to Austria to meet with contract manufacturers for high-end cars including the Magna Steyr unit of Canadian auto supplier Magna International Inc. A Magna spokeswoman declined to comment.
Other Silicon Valley giants are looking at cars. Google Inc. has been working on a self-driving car for years. The head of Google's autonomous vehicle project said last year that the company aims to partner with auto makers to build a self-driving car within the next years. A self-driving car is not part of Apple's current plan, one of the people familiar with the project said.
"There are products that we're working on that no one knows about," Apple Chief Executive Tim Cook told Charlie Rose in September. "That haven't been rumored about yet."
Mr. Cook approved the car project almost a year ago and assigned veteran product design Vice President Steve Zadesky to lead the group, the people familiar with the matter said. Mr. Zadesky is a former Ford Motor Co. engineer who helped lead the Apple teams that created the iPod and iPhone.
Mr. Zadesky was given permission to create a 1,000-person team and poach employees from different parts of the company, one of the people familiar with the matter said. Working from a private location a few miles from Apple's corporate headquarters in Cupertino, Calif., the team is researching different types of robotics, metals and materials consistent with automobile manufacturing, the people said.
In September, Apple hired Johann Jungwirth, who had been the president and chief executive of Mercedes-Benz Research and Development North America, which has operations in Sunnyvale, Calif., near Apple's campus, according to his LinkedIn profile.
The Financial Times reported earlier that dozens of Apple employees are researching automotive products, citing people familiar with the company.
Over the past 15 years, Apple has built a track record of upending industries. Its iPod music players and accompanying iTunes service accelerated the shift to digital music. The iPhone established the smartphone market and changed the notion of mobile computing. Apple plans to introduce its Apple Watch in April, which the company hopes will create a market for wearable devices.
Manufacturing a car is enormously expensive. A single plant usually costs well over $1 billion and requires a massive supply chain to produce the more than 10,000 components. Elon Musk, the chief executive of electric-car maker Tesla Motors Inc., said last fall that it is "really hard" to make a car, as the company struggled to ramp up production on its Model S sedan.
The expense is a barrier to entry to many potential competitors, but would be less of a hurdle for Apple, which reported holding $178 billion in cash as of Dec. 27, 2014.
Tesla was able to ramp its manufacturing quickly and relatively cheaply by buying a former Toyota Motor Corp. factory in Fremont, Calif., for $42 million in 2010. Tesla has since invested hundreds of millions of dollars to tool up the factory and still only produced 35,000 vehicles in 2014.
Auto makers tend to operate their own factories. Apple has relied on contract manufacturers to build all of its products. That has helped Apple keep a lean supply chain and reduce inventory exposure.
Apple has been working with auto makers on bringing its software expertise into the car. More than two dozen auto makers plan to use its Car Play service, which allows a driver to access Apple services like iTunes music, maps and Siri through the vehicle's dashboard information system.
Apple's industrial design team is staffed with several designers that have work experience at European auto makers. Last year, Apple hired Marc Newson, a famous industrial designer and close friend of the company's design guru, Jony Ive. In the past, Mr. Newson has created a concept car for Ford.
Credit: By Daisuke Wakabayashi And Mike Ramsey
Subject: Automobile industry; Chief executive officers; Manufacturing; Smartphones
People: Rose, Charlie
Company / organization: Name: Magna Steyr; NAICS: 336211; Name: Google Inc; NAICS: 519130; Name: Ford Motor Co; NAICS: 336111, 333924, 336390
Product name: Apple Watch, Apple iTunes
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 13, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655000962
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655000962?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Apple Gears Up to Challenge Tesla in Electric Cars; IPhone Maker Has 100s Working on Design of a Minivan Like Vehicle
Author: Wakabayashi, Daisuke; Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Feb 2015: n/a.
ProQuest document link
Abstract:
Apple executives have flown to Austria to meet with contract manufacturers for high-end cars including the Magna Steyr unit of Canadian auto supplier Magna International Inc. A Magna spokeswoman declined to comment. In the past, Mr. Newson created a concept car for Ford Motor Co. Apple hopes to put its stamp on the electric vehicle market in the same way it did the smartphone with its iPhone, said a person familiar with its work.
Full text: Apple Inc. has revolutionized music and phones. Now it is aiming at a much bigger target: automobiles.
The Cupertino, Calif., company has several hundred employees working secretly toward creating an Apple-branded electric vehicle, according to people familiar with the matter. The project, code-named "Titan," initially is working on the design of a vehicle that resembles a minivan, one of the people said.
An Apple spokesman declined to comment.
Apple ultimately could decide not to proceed with a car. In addition, many technologies used in an electric car, such as advanced batteries and in-car electronics, could be useful to other Apple products, including the iPhone and iPad.
Apple often investigates technologies and potential products, going as far as building multiple prototypes for some things that it won't ever sell. Any car would take several years to complete and obtain safety certifications.
But the size of the project team and the senior people involved indicate that the company is serious, these people said. Apple executives have flown to Austria to meet with contract manufacturers for high-end cars including the Magna Steyr unit of Canadian auto supplier Magna International Inc. A Magna spokeswoman declined to comment.
Apple's industrial design team is staffed with several people who have experience at European auto makers. Last year, Apple hired Marc Newson, a famous industrial designer and close friend of the company's design guru, Jony Ive. In the past, Mr. Newson created a concept car for Ford Motor Co.
Apple hopes to put its stamp on the electric vehicle market in the same way it did the smartphone with its iPhone, said a person familiar with its work. Even though Apple defied expectations of slowing growth with a 30% rise in revenue in the quarter ended December, the company is under constant scrutiny of where its next breakthrough product will come from.
Earlier this week, Mr. Cook said at an investor conference that he does not believe that companies naturally start to slow as their revenue grows. He said this was "dogma" and that Apple didn't believe in putting limits on what it was capable of.
A side benefit of the project, according to one of the people, is that it has persuaded many Apple employees who were thinking of leaving the company to stay and work on an exciting new endeavor without the pressure of churning new products every year.
Other Silicon Valley giants are looking at autos. Google Inc. has been working on a self-driving car for years. The head of Google's autonomous vehicle project said last year that the company aims to forge a partnership with auto makers to build a self-driving car within the next few years. A self-driving car is not part of Apple's current plan, one of the people familiar with the project said.
"There are products that we're working on that no one knows about," Chief Executive Tim Cook told interviewer Charlie Rose in September. "That haven't been rumored about yet."
Building cars is capital intensive, costing hundreds of millions of dollars for design, tools and production and certifications. Auto makers also must help ramp up a supply network for the thousands of components that go into a vehicle.
Battery-powered cars add another dimension. Tesla Motors Inc., for instance, has seen losses widen amid rising expenses to build an electric sport-utility vehicle. It expects to spend $1.5 billion on capital expenditures and R&D this year.
Mr. Cook approved the car project almost a year ago and assigned veteran product design Vice President Steve Zadesky to lead the group, the people familiar with the matter said. Mr. Zadesky is a former Ford engineer who helped lead the Apple teams that created the iPod and iPhone.
Mr. Zadesky was given permission to create a 1,000-person team and poach employees from different parts of the company, one of the people familiar with the matter said. Working from a private location a few miles from Apple's corporate headquarters in Cupertino, the team is researching different types of robotics, metals and materials consistent with automobile manufacturing, the people said.
In September, Apple hired Johann Jungwirth, who had been the president and chief executive of Mercedes-Benz Research and Development North America, which has operations in Sunnyvale, Calif., near Apple's campus, according to his LinkedIn profile.
The Financial Times reported earlier that dozens of Apple employees are researching automotive products, citing people familiar with the company.
Over the past 15 years, Apple has built a track record of upending industries. Its iPod music players and iTunes service accelerated the shift to digital music. The iPhone established the smartphone market and changed the notion of mobile computing. Apple plans to introduce its Apple Watch in April, which the company hopes will create a market for wearable devices.
Manufacturing a car is enormously expensive. A single plant usually costs well over $1 billion and requires a massive supply chain to produce the more than 10,000 components in a car. Elon Musk, chief executive of electric-car maker Tesla, complained last fall that it is "really hard" to make a car amid the company's struggle to ramp up production of its Model S sedan.
The expense is a barrier to entry to many potential competitors, but would be less of a hurdle for Apple, which reported holding $178 billion in cash as of Dec. 27, 2014.
Tesla was able to ramp up its manufacturing quickly and relatively cheaply by buying a former Toyota Motor Corp. factory in Fremont, Calif., for $42 million in 2010. Tesla has since invested hundreds of millions of dollars to tool up the factory and still only produced 35,000 vehicles in 2014.
Auto makers tend to operate their own factories. For years, Apple has relied on contract manufacturers to build its products. That has helped Apple keep a lean supply chain and reduce inventory exposure.
Apple has been working with auto makers on bringing its software expertise into the car. More than two dozen auto makers plan to use its CarPlay service, which allows a driver to access Apple services like iTunes music, maps and Siri through the vehicle's dashboard information system.
Write to Daisuke Wakabayashi at Daisuke.Wakabayashi@wsj.com and Mike Ramsey at michael.ramsey@wsj.com
Credit: By Daisuke Wakabayashi and Mike Ramsey
Subject: Automobile industry; Industrial design; Electric vehicles; Capital expenditures; Smartphones
Company / organization: Name: Magna Steyr; NAICS: 336211; Name: Google Inc; NAICS: 519130
Productname: Apple Watch, Apple iTunes
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 14, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655005036
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655005036?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Blame the Politicians Not Elon Musk for the Subsidies; Put Tesla on the same playing field as other vehicles. Tesla owners should be paying a carbon tax on the fossil fuels burned at the power plants, a nuclear-waste disposal fee and a road-use tax as well.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Feb 2015: n/a.
ProQuest document link
Abstract:
Morris Plains, N.J. As car companies like Ford, Toyota and Honda pass the costs of state zero-emission mandate credits onto consumers via higher automobile prices, buyers of lower-end Tauruses, Camrys and Civics effectively subsidize buyers of Tesla's luxury products, such as the $70,000 Model S. To borrow the language of the left, this is a classic example of a wealth transfer from the middle class to the "one percent."
Full text: Your editorial "The Tesla Paradox" (Feb. 13) about Tesla Motors living off mandates and subsidies at taxpayer expense is well done. Tesla made $150 million from selling zero-emission-vehicle credits for making all electric plug-in ZEVs. It should be noted that while the vehicle is emission free, the electricity that powers the vehicle is not, so any Tesla or any other plug-in electric merely pushes the tail-pipe pollution to the power company smokestacks. Electric power in the U.S. is about 70% fossil fuels, about half coal and natural gas, 20% nuclear power and 10% renewables.
Put Tesla on the same playing field as other vehicles. Tesla owners should be paying a carbon tax on the fossil fuels burned at the power plants, a nuclear-waste disposal fee and a road-use tax as well. A renewables impact fee should be paid as well, as hydropower blocks fish migrations, solar farms take up a lot of real estate and the wind farms kill upward of one million birds per year, including endangered species like bald and golden eagles.
The customers need to look beyond the nonexistent tailpipe to get a better understanding of the product they are purchasing.
Walter Lacz Jr.
Morris Plains, N.J.
As car companies like Ford, Toyota and Honda pass the costs of state zero-emission mandate credits onto consumers via higher automobile prices, buyers of lower-end Tauruses, Camrys and Civics effectively subsidize buyers of Tesla's luxury products, such as the $70,000 Model S. To borrow the language of the left, this is a classic example of a wealth transfer from the middle class to the "one percent." Not only does this sort of rent-seeking action make the world, on net, less prosperous by redirecting scarce resources needed in production to political lobbying activities, lowering (non-Tesla) consumers' purchasing power and misallocating resources through price distortions, it is also fundamentally immoral.
Daniel Barbeau
Vienna, Va.
Last I checked, most wise (and successful) capitalists seek to minimize tax liability and maximize tax advantages. Tesla selling its ZEV credits to other auto makers doesn't in any conceivable way "soak" taxpayers. Furthermore, the federal and state tax credits that Tesla's customers receive only incentivize sales of its cars. Are you really asking Elon Musk to simply throw away ZEV credits worth millions and advocate against tax credits for his own customers?
The only fair targets of your criticism of ZEV credit market manipulation and tax transfers to Tesla's already well-off customers are the federal and state governments which created them. Mr. Musk, on the other hand, is simply an aggressive, visionary--and so far successful--capitalist.
Michael T. Hoeker
Arlington, Va.
Subject: Fossil fuels; Energy policy; Automobile industry; Industrial plant emissions; Nuclear power plants; Electricity distribution; Emissions
Location: United States--US
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 20, 2015
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656156824
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1656156824?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Motors Nearly Doubled Staff In 2014; Effort to grow to 500,000 in sales is behind the surge in electric-car company's hiring
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Feb 2015: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. nearly doubled its staff in 2014 to 10,161 employees from 5,859 a year earlier as the electric car maker pursues dramatic global growth.
Full text: Tesla Motors Inc. nearly doubled its staff in 2014 to 10,161 employees from 5,859 a year earlier as the electric car maker pursues dramatic global growth.
Tesla's efforts to grow to 500,000 sales in just a few years from 33,000 in 2014, is behind the surge in hiring. The Palo Alto, Calif.-based maker of luxury electric vehicles increased its selling, general and administrative to $603.7 million in 2014, more than doubling it from $285.6 million a year earlier. That spike could largely be explained by the increased number of workers. In addition, its spending on research and development jumped to $464.7 million from $232 million in 2013.
The employment expansion comes as the company opened a new facility in Lathrup, Calif. and expanded use of its Fremont, Calif. assembly plant for both manufacturing and engineering.
In the filing submitted late Thursday, Tesla said it expects its operating expenses, which includes R&D and selling and general and administrative costs will rise about 45% to 50% in 2015. Capital spending will increase significantly to $1.5 billion in the year, and of that about $300 million will be for the Gigafactory, a giant battery factory under construction in Reno, Nev.
An interesting nugget in the filing is the stated advertising and marketing costs. Costs jumped to $48.9 million in 2014 from $9 million in 2013 and $3.9 million in 2012. That is $1,493 per vehicle in 2014 compared with $400 per vehicle in 2013. Tesla doesn't do regular advertising but it does hold events for customers and potential customers. Its budget still is a tiny fraction of what competing auto companies would spend.
Tesla in its filing also valued the Supercharger network at $107.8 million at the end of 2014, up from $25.6 million in 2013.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Research & development--R & D; Automobile industry; Factories; Capital expenditures; Research & development expenditures
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 27, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1658777455
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1658777455?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla: Battery Factory Construction on Schedule; Local paper reported possible delay in work
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Mar 2015: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Motors Inc. said the construction progress for its $5 billion battery factory near Reno, Nev., is still on schedule and nothing has changed after a report that there may be a delay in work.
A local job posting from the International Brotherhood of Electrical Workers in late January said that "Project Tiger," the local code name for the battery factory, had been "cut back by 80% at this time" and delayed. The posting went on to say that the delay was "all subject to change."
A Tesla spokeswoman said the project was on track and that there hadn't been a delay. A union official couldn't immediately be reached to comment on the job listing.
In February, when Tesla released its fourth quarter financial results, the Palo Alto, Calif.-based company said it could start delivering batteries in late 2016, slightly ahead of earlier projections. The skeleton of the massive factory--which when finished may be 10 million square feet--already is in place in an industrial park east of Reno.
The batteries from the factory will be used to supply up to 500,000 vehicles and will be needed when Tesla reaches high-volume production of its Model 3 electric vehicle, due out in 2017. The factory is expected to create thousands of construction jobs over a several year period.
The Reno Gazette-Journal first reported the delay.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Mar 6, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1660950630
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1660950630?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Runs Out of Charge in China; Electric-car maker to cut jobs as it struggles to gain traction in China
Author: Murphy, Colum
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2015: n/a.
ProQuest document link
Abstract:
According to investment research firm JL Warren Capital LLC, just under 2,500 Teslas were registered in the nine months last year when Tesla was delivering its cars to Chinese customers. Starting next year, Audi AG will locally produce a plug-in hybrid version of its Audi A6 L sedan with its Chinese joint venture partner FAW-Volkswagen Automotive Co. Meanwhile, Volkswagen AG says it has set its sights on becoming the leading car maker in alternative-energy vehicles both in terms of technology and sales in China by 2018.
Full text: SHANGHAI--Tesla Motors Inc.'s plan to cut jobs in China underscores the luxury electric-car pioneer's struggles in the country, a crucial market for the developing technology.
Tesla didn't provide details on the extent of the cuts, and declined to comment on Chinese media reports that said the company would cut 180 jobs, or 30% of its workforce in the country.
The electric-car maker's planned cuts in China follow a near doubling of the company's global staff in 2014 to 10,161 employees from 5,859 a year earlier.
Tesla has been pursuing dramatic growth even as it continues to rack up sizable losses. The Palo Alto, Calif., company's fourth-quarter loss widened to $108 million, missing analysts' forecasts, as total car deliveries fell short of expectations.
The news comes as China itself struggles to meet its own long-stated goal of reducing its dependency on imported oil by promoting alternative-energy vehicles, including passenger cars and buses.
China wants half a million such vehicles on the road by the end of this year and 10 times that by the end of the decade. But last year only around 50,000 cars of the roughly 20 million passenger vehicles sold in China met that criterion.
Analysts say that despite generous subsidies from China's central and local governments and exemptions in some cities from stringent license-plate restrictions, many consumers remain unconvinced because they consider such cars comparatively expensive and they worry a lack of charging infrastructure could make driving a hassle.
While Tesla's Chinese buyers tend to be wealthy and less price-sensitive--prices in China start from around 680,000 yuan, or about $110,000, according to the company's website--potential buyers in China have expressed concerns about difficulties accessing charging stations.
Those worries were behind the company's disappointing sales in China late last year, Chief Executive Elon Musk said in January.
According to investment research firm JL Warren Capital LLC, just under 2,500 Teslas were registered in the nine months last year when Tesla was delivering its cars to Chinese customers. Tesla declined to comment on the figures at that time.
More recent data suggest 2015 was also off to a rocky start. Some 469 Tesla cars were registered in China in January, up 6% from December's 442 and on par with November's 471 cars, according to analysis by JL Warren. The research firm also says Tesla imported just 10 Model S cars into China in January, down sharply from the more than 440 brought into China the month before. Tesla declined to comment on the figures but a spokesman said at the time the company was "confident" about its business in China.
During a recent earnings call, Mr. Musk said its China struggles were inconsequential because the company could have sold just as many cars world-wide even without selling any in the country. Tesla has long said China would account for a significant share of its global volume once sales started rolling.
In January 2014, Mr. Musk told The Wall Street Journal he would consider it a success if Tesla were to sell 5,000 vehicles or more in China in 2014.
About 320,000 plug-in vehicles were sold globally last year, according to consulting firm Automotive Foresight.
Many leading foreign brands and Chinese brands have introduced either all-electric or plug-in-hybrid cars, which can run using either gasoline or battery power. Tesla has also faced major leadership changes in China. In December Tesla's then-China chief, Veronica Wu, left the company after about one year on the job. She was succeeded by Tom Zhu, who described the challenges facing Tesla in China as "natural growing pains" without which there could be no innovation.
Daimler AG and Chinese car maker BYD Co. started commercial production of their jointly developed electric-car brand Denza last August. This was followed in September by the China launch of BMW's i3 electric car and plug-in hybrid i8. Neither Daimler nor BMW responded to a request for comment Monday.
Starting next year, Audi AG will locally produce a plug-in hybrid version of its Audi A6 L sedan with its Chinese joint venture partner FAW-Volkswagen Automotive Co.
Meanwhile, Volkswagen AG says it has set its sights on becoming the leading car maker in alternative-energy vehicles both in terms of technology and sales in China by 2018. It is targeting sales in the six digits of plug-in hybrids and battery cars in China by the end of this decade.
BYD said its plug-in hybrid Qin was the best-selling alternative-energy car in China last year, with sales of 14,747 vehicles. Qin was launched in December 2013.
Tesla began deliveries in China in April. The cars immediately captured attention in a country with an appetite for luxury rides and an interest in electric cars given China's vast pollution problems. Initial deliveries hit some snags, as a group of customers in China took to Chinese media to protest delayed deliveries of their cars.
Soon charging emerged as a major challenge for Tesla in China. Many Chinese people tend to live in apartment buildings rather than the single-family homes commonly found in the U.S. That means the family garage is a rarity in China, complicating the setup of a home charger. Tesla is dispatching teams of employees to work with property managers and has met with local officials to raise awareness of the issue.
Yale Zhang, managing director of Automotive Foresight, said Chinese buyers of Tesla would likely interpret the job cuts as a sign that "there is something wrong" with the company. He said that in China the brand had been built on a media-created bubble centered on the charisma of Mr. Musk. "Now that bubble has burst," he said.
Tesla said it is "on the right track and confident" about the market in China.
Mike Ramsey in Detroit contributed to this article.
Write to Colum Murphy at colum.murphy@wsj.com
Credit: By Colum Murphy
Subject: Automobile industry; Statistical data
Location: China
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Product name: Audi A6
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Mar 9, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1661278348
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1661278348?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Shares Fall on News of China Job Cuts; Analysts disagree on whether or not demand remains strong
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2015: n/a.
ProQuest document link
Abstract:
The inventory of unsold vehicles on dealer lots is a tiny number compared with standard car companies, but a change for Tesla, which had operated as a "made for order" company exclusively. Since Tesla doesn't have franchises, it owns the cars until they are sold to customers.
Full text: Tesla Motors Inc.'s restructuring in China , where sales have disappointed, is a sign that demand may be leveling off for the $100,000 electric car, sending shares down 2.47% Monday to $189.10 in afternoon trading.
But there's wide disagreement about whether demand remains strong, and the company's unique business model makes it difficult to estimate.
In addition to the slow China sales, there's been a buildup of unsold vehicles in Tesla's inventory. Dan Galves, a Credit-Suisse auto analyst, said he estimates about 1,000 vehicles are at dealerships waiting for sale.
"I think demand is still strong because they produced and sold more cars in the fourth quarter than ever before, and still ended the quarter with more unfulfilled orders than when the quarter began," Mr. Galves said. "I don't think that having some unsold inventory and still having strong demand are mutually exclusive."
The inventory of unsold vehicles on dealer lots is a tiny number compared with standard car companies, but a change for Tesla, which had operated as a "made for order" company exclusively. Since Tesla doesn't have franchises, it owns the cars until they are sold to customers. In the U.S., other car companies sell cars to dealers who then resell them to customers, so they don't hold on to inventory very long.
To reflect this new reality, Tesla changed how it referred to "finished goods" in a regulatory filing. It used to be only cars in transit to customers. Now it includes cars ready for immediate sale--meaning unsold inventory.
"This is a departure from the past--indicating that Tesla production is not as much of a build-to-order model as it had been historically," said Brian Johnson, an equity analyst with Barclays. "It's hard to make a case that demand has plateaued," but combined with the lower-than-expected sales in China, it puts extra pressure on Tesla to sell well in the U.S. and Europe.
Company officials say interest remains strong. Indeed, the company reported last month that it entered 2015 with a 10,000 vehicle order backlog for the Model S and 20,000 reservations for the forthcoming Model X sport-utility.
An order placed today for the Tesla Model S P85D--the top-end performance version of the electric car that starts at $105,000--will put the car in your driveway by the end March, more than a month before the less expensive versions of the car.
After a burst of production late last year to meet unexpected demand for the all-wheel-drive version of the car that features an "insane" button that engages both motors and gives the driver 691 horsepower, the Palo Alto, Calif.-based auto maker can deliver its high-end models faster than the more standard cars available for sale.
A company spokeswoman said Tesla has prioritized deliveries of the car, which is why it can be delivered so quickly.
And Tesla has yet to use any true incentives or advertising to help sell products, a sign that it can't produce enough vehicles to meet demand.
Judging demand for Tesla has always been challenging. It only reports sales on a global basis and only then on a quarterly basis. Monthly sales estimates for the company vary wildly. For example, WardsAuto.com estimated Tesla had U.S. sales of 997 in February. Autodata Corp. estimated 1,200 and InsideEVs estimated 1,150 deliveries.
Furthermore, the company must ship vehicles to Europe and Asia, creating a significant lag time between production and sales as well as a boom-and-bust fluctuation in sales based on the timing of deliveries.
John Lovallo, an analyst for Bank of America Merrill Lynch, wrote in a note recently that Tesla will soon tumble. He questioned whether demand remained strong for the vehicles and estimated that mounting cash burns would drag the company down.
"We believe Tesla has seemingly managed to offset a steady stream of negative news and weak financial results by issuing long-term targets that, in our view, are often quite difficult to fathom," he said.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile sales; Automobile industry; Vehicles; Inventory
Location: United States--US China
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Mar 9, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1661351376
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1661351376?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: Th e Wall Street Journal
Business News: Tesla Confronts Headwinds in China
Author: Murphy, Colum
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 Mar 2015: B.4.
ProQuest document link
Abstract:
According to investment research firm JL Warren Capital LLC, just under 2,500 Teslas were registered in the nine months last year when Tesla was delivering its cars to Chinese customers.
Full text: SHANGHAI -- Telsa Motors Inc.'s plan to cut jobs in China underscores the luxury electric-car company's struggles in the country, a crucial market for the developing technology.
Tesla didn't provide details on the extent of the cuts and declined to comment on Chinese media reports that said the company would cut 180 jobs, or 30% of its workforce in the country.
The electric-car maker's planned cuts in China follow an increase of the company's global staff in 2014 to 10,161 employees from 5,859 a year earlier.
Tesla has been pursuing dramatic growth even as it continues to rack up sizable losses. The Palo Alto, Calif., company's fourth-quarter loss widened to $108 million, missing analysts' forecasts, as total car deliveries fell short of expectations.
The news comes as China itself struggles to meet its own long-stated goal of reducing its dependency on imported oil by promoting alternative-energy vehicles, including passenger cars and buses.
China wants half a million such vehicles on the road by the end of this year and 10 times that by the end of the decade. But last year only around 50,000 cars of the roughly 20 million passenger vehicles sold in China met that criterion. Analysts say that despite generous subsidies from China's central and local governments and exemptions in some cities from stringent license-plate restrictions, many consumers remain unconvinced because they consider such cars comparatively expensive and they worry a lack of charging infrastructure could make driving a hassle.
While Tesla's Chinese buyers tend to be wealthy and less price-sensitive -- prices in China start at around 680,000 yuan, or about $110,000, according to the company's website -- potential buyers in China have expressed concerns about difficulties accessing charging stations. Those worries were behind the company's disappointing sales in China late last year, Chief Executive Elon Musk said in January.
According to investment research firm JL Warren Capital LLC, just under 2,500 Teslas were registered in the nine months last year when Tesla was delivering its cars to Chinese customers. Tesla declined to comment on the figures at that time.
Recent data suggest 2015 was off to a rocky start. Some 469 Tesla cars were registered in China in January, up 6% from December's 442 and on par with November's 471 cars, according to analysis by JL Warren.
The research firm also says Tesla imported just 10 Model S cars into China in January, down sharply from the more than 440 brought into China the month before. Tesla declined to comment on the numbers but a spokesman said at the time the company was confident about its business in China.
During a recent earnings call, Mr. Musk said its China struggles were inconsequential because the company could have sold just as many cars world-wide even without selling any in the country. Tesla has long said China would account for a significant share of its global volume once sales started rolling.
In January 2014, Mr. Musk told The Wall Street Journal he would consider it a success if Tesla were to sell 5,000 vehicles or more in China in 2014.
About 320,000 plug-in vehicles were sold globally last year, according to consulting firm Automotive Foresight.
Many leading foreign brands and Chinese brands have introduced either all-electric or plug-in-hybrid cars, which can run using either gasoline or battery power. Tesla also has faced major leadership changes in China.
In December Tesla's then-China chief, Veronica Wu, left the company after about one year on the job. She was succeeded by Tom Zhu, who described the challenges facing Tesla in China as "natural growing pains" without which there could be no innovation.
Daimler AG and Chinese car maker BYD Co. started commercial production of their jointly developed electric-car brand Denza last August. This was followed in September by the China launch of BMW's i3 electric car and plug-in hybrid i8. Neither Daimler nor BMW responded to a request for comment Monday.
Starting next year, Audi AG will locally produce a plug-in hybrid version of its Audi A6 L sedan with its Chinese joint venture partner FAW-Volkswagen Automotive Co.
Meanwhile, Volkswagen AG says it has set its sights on becoming the leading car maker in alternative-energy vehicles both in terms of technology and sales in China by 2018. It is targeting sales in the six digits of plug-in hybrids and battery cars in China by the end of this decade.
BYD said its plug-in hybrid Qin was the best-selling alternative-energy car in China last year, with sales of 14,747 vehicles. Qin was launched in December 2013.
---
Mike Ramsey in Detroit contributed to this article.
Credit: By Colum Murphy
Subject: Automobile industry; Statistical data; Electric vehicles; Layoffs
Location: China
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 1300: International trade & foreign investment; 6100: Human resource planning; 8680: Transportation equipment industry; 9179: Asia & the Pacific
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2015
Publication date: Mar 10, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1661533930
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1661533930?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohib ited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Buying a Tesla? Waits Are Short for the Priciest; Electric-car maker's dual-motor P85D, costing $105,000, are a delivery priority
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Mar 2015: n/a.
ProQuest document link
Abstract:
General Motors Co., Volkswagen AG., Toyota Motor Corp. and other auto makers break out sales for most geographic markets on a monthly basis.\n
Full text: Tesla Motors Inc.'s top-of-the-line electric car can be delivered in just 20 days, far shorter than the waiting time on the luxury auto maker's less expensive designs, suggesting it has shifted production to the $105,000 and up sedan to boost revenue.
The Palo Alto, Calif., auto maker launched the dual-motor P85D late last year at a price designed to increase its average transaction prices and potentially bring the money-losing company closer to steady profitability. The company missed its reduced fourth quarter delivery goal by about 300 units.
Tesla's online ordering tool this week shows the Model S P85D is available for delivery in late March, while the $71,000 and up single-electric motor Model S is first available in May.
A spokeswoman said the company has prioritized deliveries of the P85D. The short wait time--in the past year deliveries have been as long as three months--raises concerns about the strength of demand for Tesla's pricey cars. It is expected to offer its next model, a sport-utility vehicle called the Model X, in the third quarter.
This week, Tesla confirmed it is trimming staff in China amid weaker-than-expected demand there. China is expected to account for up to a third of the company's global volume, Chief Executive Elon Musk has said.
The company's fourth quarter securities filing shows strong continued interest in its cars despite low gasoline prices. Wall Street analysts believe there is pent-up demand for Model S sedans. Last month, it said the order backlog included 10,000 deposits for its Model S and 20,000 for the Model X.
Shares are off 14% since the start of the year. The stock closed off 33 cents at $190.55 in Nasdaq trading on Thursday.
Investors hungry for details about the company's progress toward meeting its 2015 delivery goals aren't likely to be sated soon. Unlike most auto makers, Tesla doesn't release its unit sales on a monthly basis, doesn't disclose inventory of unsold cars available for sale and doesn't disclose unit sales by geographic region.
Tesla has forecast it will sell 55,000 cars globally in 2015, rising to 500,000 in 2020 and more than 2 million by 2025. Hitting the accelerator on sales and revenue is critical this year because it has drastically increased spending and Mr. Musk sees demands on capital investment growing in coming years.
One of the biggest question marks facing the company relates to inventory. Credit Suisse auto analyst Dan Galves on Monday estimated inventory of unsold vehicles was 1,000 vehicles at Dec. 31. CVC Research, a financial company, pegs the year-end inventory at 3,000 vehicles.
Whatever the level of unsold inventory, the company traditionally has followed a build-to-order model. Last month, Tesla said in a regulatory filing it changed how it refers to finished goods. Once only including cars in transit to customers, the term was broadened to include cars available for immediate sale.
Barclays auto analyst Brian Johnson called that move "a departure from the past--indicating that Tesla production is not as much a build-to-order model as it has been historically."
The P85D represents a potential boost for the company. Lauded for handling that rivals Porsche or Ferrari sports cars, it has an "insane" button that engages two motors to achieve up to 691 horsepower. Production glitches and other factors slowed initial sales of the model, denting fourth quarter results.
Tracking Tesla's sales progress has been challenging, since the company reports deliveries globally and gives those numbers every three months. General Motors Co., Volkswagen AG., Toyota Motor Corp. and other auto makers break out sales for most geographic markets on a monthly basis.
That paucity of sales data leads to wild variations in sales estimates for the electric car maker. WardsAuto.Com, for instance, estimates Tesla's U.S. sales of 997 in February. That number is 17% lower than the 1,200 deliveries estimated by Autodata Corp. For the year, Wards estimates Tesla U.S. sales at 1,793, while Autodata is at 2,200.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile sales; Automobile industry; Vehicles; Inventory; NASDAQ trading
Location: China Palo Alto California
People: Musk, Elon
Company / organization: Name: Credit Suisse Group; NAICS: 522110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Mar 10, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1661803917
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1661803917?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Buying a Tesla? Waits Are Short for the Priciest
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Mar 2015: B.3.
ProQuest document link
Abstract:
General Motors Co., Volkswagen AG., Toyota Motor Corp. and other auto makers break out sales for most geographic markets on a monthly basis.\n
Full text: Tesla Motors Inc.'s top-of-the-line electric car can be delivered in just 20 days, far shorter than the waiting time on the luxury auto maker's less expensive designs, suggesting it has shifted production to the $105,000 and up sedan to boost revenue.
The Palo Alto, Calif., auto maker launched the dual-motor P85D late last year at a price designed to increase its average transaction prices and potentially bring the money-losing company closer to steady profitability. The company missed its reduced fourth-quarter delivery goal by about 300 units.
Tesla's online ordering tool this week shows the Model S P85D is available for delivery in late March, while the $71,000 and up single-electric motor Model S is first available in May.
A spokeswoman said the company has prioritized deliveries of the P85D. The short wait time -- in the past year deliveries have been as long as three months -- raises concerns about the strength of demand for Tesla's pricey cars. It is expected to offer its next model, a sport-utility vehicle called the Model X, in the third quarter.
This week, Tesla confirmed it is trimming staff in China amid weaker-than-expected demand there. China is expected to account for up to a third of the company's global volume, Chief Executive Elon Musk has said.
The company's fourth-quarter securities filing shows strong continued interest in its cars despite low gasoline prices. Wall Street analysts believe there is pent-up demand for Model S sedans. Last month, it said the order backlog included 10,000 deposits for its Model S and 20,000 for the Model X.
Shares are off 14% since the start of the year. The stock closed off 33 cents at $190.55 in Nasdaq trading on Thursday.
Investors hungry for details about the company's progress toward meeting its 2015 delivery goals aren't likely to be sated soon. Unlike most auto makers, Tesla doesn't release its unit sales on a monthly basis, doesn't disclose inventory of unsold cars available for sale and doesn't disclose unit sales by geographic region.
Tesla has forecast it will sell 55,000 cars globally in 2015, rising to 500,000 in 2020 and more than 2 million by 2025. Hitting the accelerator on sales and revenue is critical this year because it has drastically increased spending and Mr. Musk sees demands on capital investment growing in coming years.
One of the biggest question marks facing the company relates to inventory. Credit Suisse auto analyst Dan Galves on Monday estimated inventory of unsold vehicles was 1,000 vehicles at Dec. 31. CVC Research, a financial company, pegs the year-end inventory at 3,000 vehicles.
Whatever the level of unsold inventory, the company traditionally has followed a build-to-order model. Last month, Tesla said in a regulatory filing it change how it refers to finished goods. Once only including cars in transit to customers, the term was broadened to include cars available for immediate sale.
Barclays auto analyst Brian Johnson called that move "a departure from the past -- indicating that Tesla production is not as much a build-to-order model as it has been historically."
The P85D represents a potential boost for the company. Lauded for handling that rivals Porsche or Ferrari sports cars. Production glitches and other factors slowed initial sales of the model, denting fourth quarter results.
Tracking Tesla's sales progress has been challenging, since the company reports deliveries globally and gives those numbers every three months. General Motors Co., Volkswagen AG., Toyota Motor Corp. and other auto makers break out sales for most geographic markets on a monthly basis.
Credit: By Mike Ramsey
Subject: Automobile industry; Vehicles; Inventory; Automobile sales
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2015
Publication date: Mar 11, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1661894815
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1661894815?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla to Unveil Update on Model S; CEO Elon Musk said company announcement "to end range anxiety"
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Mar 2015: n/a.
ProQuest document link
Abstract:
In many respects, this function of the Model S is what separates it from other car makers in terms of using the state of the art because Tesla has used the updates to not only improve the multimedia system, but also address drive and performance and safety issues.
Full text: Tesla Motors Inc. will unveil on Thursday an update to its Model S that will address its all-electric range in some form, the company's chief executive said Sunday in a tweet .
Elon Musk, the CEO, has made it a practice to announce news for the company using his personal Twitter handle. On Sunday morning, he said: "About to end range anxiety...via (over-the-air) software update. Affects entire Model S fleet."
He said the announcement would be 9 a.m. Thursday. Company officials confirmed that is 9 a.m. Pacific time.
Tesla's Model S has an embedded wireless Internet connection and the company has used it to perform several updates over time to the vehicle. In many respects, this function of the Model S is what separates it from other car makers in terms of using the state of the art because Tesla has used the updates to not only improve the multimedia system, but also address drive and performance and safety issues.
Tesla's electric cars already have the longest range of any electric vehicles on the road. The base model, with a 60 kwh battery, is EPA rated to go 208 miles. The 85 kwh version can travel 265 miles on a charge. In addition, Telsa has built hundreds of Supercharger stations where Tesla owners can stop and recharge their batteries free in around 30 minutes using a 130 kW direct charge system.
A company spokesman declined to comment on whether the update would optimize the electrical system to wring out more range or update the interface to give users a better idea where chargers are located nearby.
The last update Tesla announced--also prefaced by a series of tweets from Mr. Musk--was the dual motor version of the Model S, which gives the vehicle up to 691 horsepower.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Research & development--R & D; Automobile industry
People: Musk, Elon
Company / organization: Name: Environmental Protection Agency--EPA; NAICS: 924110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Mar 15, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 16 63453844
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1663453844?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Closer to Being Able to Have New Jersey Dealerships; Georgia legislature also moving on a bill allowing dealerships in that state
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Mar 2015: n/a.
ProQuest document link
Abstract:
Tesla's build-to-order sales model allows buyers to order cars anywhere in the U.S. online and have the vehicles shipped to their house, but the company still wants dealerships so people can take test drives and physically touch the vehicles.
Full text: Tesla Motors Inc. is close to an important victory in New Jersey as a bill that allows up to four dealerships in the state passed both legislative bodies and awaits the governor's signature.
A similar a bill in Georgia also has advanced, which would clear the way for five dealerships there.
Last year, Tesla was forced to stop selling vehicles in New Jersey at two dealerships after the Motor Vehicle Commission said the company's licenses were improperly issued. Tesla sells direct to consumers and doesn't use independent franchises like other car companies. This variation has led to a state-to-state battle with dealers over their business model.
"I think the action in New Jersey and to a degree in Georgia is evidence that our argument that this is a necessary requisite for advancing this technology is legitimate and it is taking hold," said Diarmuid O'Connell, Tesla's vice president of business development in an interview Monday, following the vote in the New Jersey Senate.
In Georgia, the state House of Representatives passed a bill allowing up to five dealerships in the state to sell direct to consumers. Tesla had been operating there, but was limited by state law to selling 149 vehicles from its dealerships. The bill would remove the cap but set a limit on the number of stores.
Tesla's build-to-order sales model allows buyers to order cars anywhere in the U.S. online and have the vehicles shipped to their house, but the company still wants dealerships so people can take test drives and physically touch the vehicles. Dealers have battled Tesla, concerned that the direct-sales method could be adopted by other car makers.
Auto dealers and their associations are powerful lobbying forces and have used their influence to craft legislation in most U.S. states to try to stop or limit Tesla from operating.
In most cases, Tesla has managed to come to an accommodation with dealers, agreeing to a cap in the number of locations in exchange for the ability to operate. Such agreements have gone through in Ohio and Pennsylvania, among others.
But there still are states, such as Texas, Arizona and Michigan, that don't allow direct sales at a dealership. There is a bill proposed in Texas to allow Tesla sales, but the dealer association has promised to fight it.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile dealers; Bills; Vehicles; Automobile sales
Location: United States--US Georgia New Jersey
Company / organization: Name: Senate-New Jersey; NAICS: 921120; Name: House of Representatives; NAICS: 921120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Mar 17, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1663912463
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1663912463?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Nvidia Unveils Titan X Graphics Chip; Also at conference, Tesla's Elon Musk discusses future of self-driving vehicles
Author: Clark, Don
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Mar 2015: n/a.
ProQuest document link
Abstract:
Because of such speedups, buying the technology "will pay for itself in an afternoon," he said.
Full text: SAN JOSE, Calif.--Nvidia Corp. announced its next advance in the technology that renders images in videogames, a high-end graphics chip called Titan X sporting eight billion transistors.
The company said the product would cost $999, packaged in an accelerator board that plugs into personal computers. It comes with 12 gigabytes of memory, twice the amount of prior products, Nvidia said.
Jen-Hsun Huang, Nvidia's chief executive, unveiled the product at an annual event here that focuses on new applications for the chips known by the acronym GPUs, for graphics processing units. Many scientists are using the technology to accelerate high-performance computing chores carried out by supercomputers and other powerful systems.
Nvidia said Titan X, which received a sneak preview at a recent event in San Francisco, has twice the performance and double the power efficiency of its predecessor.
Mr. Huang said the Titan X would allow one scientific application that now takes 43 days with current GPUs to be completed in three days.
"It is utterly life-changing," Mr. Huang said. Because of such speedups, buying the technology "will pay for itself in an afternoon," he said.
The event known as the GPU Technology Conference also is expected to feature applications of Nvidia chips for image recognition and other chores associated with making cars smarter.
On featured guest was Elon Musk, the chief executive of Tesla Motors Inc., who discussed the company's work in developing self-driving vehicles. Mr. Musk said the technology will become so commonplace and so much safer that owner-driven cars may be outlawed.
"You can't have a person driving a two-ton death machine," Mr. Musk said.
Nvidia also gave details of a future GPU technology, dubbed Pascal, that is set to debut next year. Mr. Huang said the technology will be particularly suited for humanlike computer chores known by the phrase "deep learning," offering a tenfold speed up in such calculations.
Write to Don Clark at don.clark@wsj.com
Credit: By Don Clark
Subject: Graphics boards; Product introduction; Accelerator boards
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Mar 17, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1663942137
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1663942137?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
India's Mahindra Enters Racing, but With Eye on Tesla; Company invests in FIA's Formula E racing series, preparing a push into global electric-car market
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Mar 2015: n/a.
ProQuest document link
Abstract:
In a series that began late last year , drivers from 10 teams--including powerhouses like Audi AG, Renault SA and Andretti Autosport--race high-performance electric cars for an hour at a 140 mph top speed; they need to finish without running out of battery power. In the race to create a more viable global electric-car market, Mahindra wants to be the low-cost answer to Tesla Motors Inc. Mahindra's $10,000 e2o is the only pure battery-operated car built in India, a nation with big electric-vehicle ambitions that has been slow to initiate incentives to accelerate demand.
Full text: MIAMI--At first blush, Mahindra & Mahindra Ltd. and the FIA's Formula E racing series are strange bedfellows.
Mahindra is India's biggest sport-utility seller and best known in the U.S. for its small tractors. It also has a big IT business in the U.S., a startup scooter company, and a stable of other businesses.
Formula E race cars are among the most progressive machines on any racetrack in the world. In a series that began late last year , drivers from 10 teams--including powerhouses like Audi AG, Renault SA and Andretti Autosport--race high-performance electric cars for an hour at a 140 mph top speed; they need to finish without running out of battery power.
Mahindra is one of the first auto makers to have invested millions into participating in the series. The move is less about racking up victories, and more about preparing to take a big step in a higher-stakes game. In the race to create a more viable global electric-car market, Mahindra wants to be the low-cost answer to Tesla Motors Inc.
Mahindra's $10,000 e2o is the only pure battery-operated car built in India, a nation with big electric-vehicle ambitions that has been slow to initiate incentives to accelerate demand. This summer, Mahindra will launch the city car in London, with hopes that the subcompact is a launchpad to mature markets that have been hard to crack with Indian vehicles carrying conventional powertrains.
"Mahindra is eager to become a global brand," Pawan Goenka, the company's longtime automotive chief, said during an interview before the latest Formula E race here Saturday. "If we were to do it through electric vehicles, it may be an easier thing than to come through the mainstream."
The move to mature markets will be challenging and could be costly. Mr. Goenka has had lackluster support from the Indian government and there is little local competition, so he needs Formula E to help him navigate potential potholes.
Regulations in the U.K., for instance, likely require significantly more safety equipment, and that will add performance-sapping weight and cost to a car meant to appeal to both the conscience and the pocketbook.
A broad swath of companies--ranging from General Motors Co. to China's BYD Co. Ltd--are betting on electric cars as a way to broaden appeal, meet regulations or enter new markets. The number of auto makers offering viable electric cars by 2020 is expected to balloon, but there is no guarantee demand will follow.
Mahindra's e2o is modest, with a 50-mph top speed and room for four passengers. Smaller than a Ford Fiesta, the car can travel 75 miles on a five-hour charge, 9 miles shy of Nissan Motor Co.'s much pricier, and roomier, Leaf. Mahindra has been working on electrics for two decades, but its ambitions were jump-started when it purchased control of REVA Electric Car Co. in 2010.
A trip down to pit row illustrates why the e2o's maker is eager to race with the big boys. It is also a reminder of how far the auto maker and its rivals have to go before electric cars are viable for the mass market.
Dilbagh Gill, a former driver now running Mahindra's racing effort, stood next to two of the team's cars a couple of hours before the race as crew members made final preparations. The most important task was charging batteries that, when fully charged, could power an iPhone for 270 years, according to Mr. Gill.
On the track, however, the batteries last 30 minutes. Each driver has two cars, swapping machines at the race's midpoint.
"If you're too aggressive, you're going to run out of battery juice too soon," Mr. Goenka said. "And if you're not aggressive enough, then you won't win the race."
In Mr. Goenka's view, the race in the marketplace is a battle of cost. Producing Mahindra's e2o, he says, costs $3,000 to $3,500 more than a similar conventional car, and the premium needs to fall by two-thirds.
"I believe the customer would be willing to pay $1,000 or so," he said. Auto makers must be able to drop prices to a point where government subsidies aren't driving the market.
"Subsidies cannot last forever," he said. Companies like Mahindra, which sell the bulk of its cars in emerging markets, have a jump on building lower-cost cars, and Mr. Goenka said this is a unique advantage.
Joining the FIA's Formula E circuit also helps because Mahindra can share in the significant investment the race series is making in electric-vehicle technology. That kind of collaboration has been lacking in India, which introduces an incentive for electric vehicles on April 1, the first of its kind in India.
Mr. Goenka said Indian policy makers "have started with small budgetary allocation but have a rather large master plan." Regulators aim for four million to five million electric vehicles, including two-wheelers, by around the turn of the decade.
"India probably needs electric vehicles more than any other country." Dependence on foreign oil and pollution are two reasons for the nation to go electric, he said.
For now, Mahindra's effort in its home market is stuck in the slow lane, reflecting struggles Nissan and GM have experienced in sustaining consistent demand. Mahindra sells about 75 e2os per month in India.
Write to John D. Stoll at john.stoll@wsj.com
Credit: By John D. Stoll
Subject: Automobile industry; Subsidies; Electric vehicles
Location: United States--US India
Company / organization: Name: Andretti Autosport; NAICS: 711219; Name: Renault SA; NAICS: 336111; Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Nissan Motor Co Ltd; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999; Name: Audi AG; NAICS: 336111; Name: Mahindra & Mahindra Ltd; NAICS: 541512
Product name: Ford Fiesta
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Mar 17, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1663983033
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1663983033?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla's Elon Musk Says Autonomous Driving Not All That Hard to Achieve; Electric car and commercial spacecraft pioneer sees self-piloting vehicle as solved problem
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Mar 2015: n/a.
ProQuest document link
Abstract:
Nvidia, which produces visual computing technology, is a supplier to Tesla and provides the processor that helps to power its 17-inch multimedia display and other functions inside the car.
Full text: Elon Musk, chief executive of Tesla Motors Inc. and Space Exploration Technologies Inc., says autonomous driving isn't all that difficult to achieve.
"I view it as a solved problem. We know exactly what to do and we will be there in a few years," Mr. Musk said at the Nvidia Corp. graphical processor conference in San Jose, Calif., on Tuesday.
A fully autonomous vehicle that is much safer than a person "is much easier than you would think," he said. "In the distant future people may outlaw driver cars. You can't have a person operating a two-ton death machine!"
Mr. Musk has said Tesla plans to be the first company to offer customers an autopilot feature. "I think we will be the leader in autonomous cars that you can actually buy," he said.
Nvidia, which produces visual computing technology, is a supplier to Tesla and provides the processor that helps to power its 17-inch multimedia display and other functions inside the car.
Jen-Hsun Huang, the chief executive officer of Nvidia, participated in a question-and-answer session with Mr. Musk at the conference. Mr. Huang said the power of new machine-learning capabilities will cause a big bang in capabilities for self-driving vehicles.
Nvidia is making available in May its autonomous vehicle development platform, using the company's processors, to auto makers and researchers.
Tesla is set to announce on Thursday anover-the-air update to existing Model S customers that Mr. Musk said would address so-called range anxiety, or the fear of running out of power in an electric car.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Graphics boards; Product introduction; Automobile industry
People: Huang, Jen-Hsun
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Mar 17, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1663983697
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1663983697?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News -- Upshot: Mahindra Races, With Eye on Tesla --- Indian company invests in Formula E series as it prepares big push into electric-car market
Author: Stoll, John D
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 Mar 2015: B.8.
ProQuest document link
Abstract:
In a series that began late last year, drivers from 10 teams -- including powerhouses like Audi AG, Renault SA and Andretti Autosport -- race high-performance electric cars for an hour at a 140 mph top speed; they need to finish without running out of battery power. In the race to create a more viable global electric-car market, Mahindra wants to be the low-cost answer to Tesla Motors Inc. Mahindra's $10,000 e2o is the only pure battery-operated car built in India, a nation with big electric-vehicle ambitions that has been slow with incentives to spur demand.
Full text: MIAMI -- At first blush, Mahindra & Mahindra Ltd. and the FIA's Formula E racing series are strange bedfellows.
Mahindra is India's biggest sport-utility seller and best known in the U.S. for small tractors. It also has a big IT business in the U.S., a startup scooter company, and a stable of other businesses.
Formula E race cars are among the most progressive machines on any racetrack in the world. In a series that began late last year, drivers from 10 teams -- including powerhouses like Audi AG, Renault SA and Andretti Autosport -- race high-performance electric cars for an hour at a 140 mph top speed; they need to finish without running out of battery power.
Mahindra is one of the first auto makers to have invested millions in participating in the series. The move is less about racking up victories, and more about preparing to take a big step in a higher-stakes game. In the race to create a more viable global electric-car market, Mahindra wants to be the low-cost answer to Tesla Motors Inc.
Mahindra's $10,000 e2o is the only pure battery-operated car built in India, a nation with big electric-vehicle ambitions that has been slow with incentives to spur demand. This summer, Mahindra will launch the city car in London, with hopes that the subcompact is a launchpad to mature markets that have been hard to crack for Indian vehicles with conventional powertrains.
"Mahindra is eager to become a global brand," Pawan Goenka, the company's longtime automotive chief, said during an interview before the latest Formula E race here Saturday. "If we were to do it through electric vehicles, it may be an easier thing than to come through the mainstream."
The move to mature markets will be challenging and could be costly. Mr. Goenka has had lackluster support from the Indian government and there is little local competition, so he needs Formula E to help him navigate potential potholes.
Regulations in the U.K., for instance, likely require significantly more safety equipment, and that will add performance-sapping weight and cost to a car meant to appeal to both the conscience and the pocketbook.
A broad swath of companies -- ranging from General Motors Co. to China's BYD Co. Ltd -- are betting on electric cars as a way to broaden appeal, meet regulations or enter new markets. The number of auto makers offering viable electric cars by 2020 is expected to balloon, but there is no guarantee demand will follow.
Mahindra's e2o is modest, with a 50-mph top speed and room for four passengers. Smaller than a Ford Fiesta, the car can travel 75 miles on a five-hour charge, 9 miles shy of Nissan Motor Co.'s much pricier, and roomier, Leaf. Mahindra has been working on electrics for two decades, but its ambitions were jump-started when it purchased control of REVA Electric Car Co. in 2010.
A trip down to pit row illustrates why the e2o's maker is eager to race with the big boys. It is also a reminder of how far the auto maker and its rivals have to go before electric cars are viable for the mass market.
Dilbagh Gill, a former driver now running Mahindra's racing effort, stood next to two of the team's cars a couple of hours before the race as crew members made final preparations. The most important task was charging batteries that, when fully charged, could power an iPhone for 270 years, according to Mr. Gill.
On the track, however, the batteries last 30 minutes. Each driver has two cars, swapping machines at the race's midpoint. "If you're too aggressive, you're going to run out of battery juice too soon," Mr. Goenka said. "And if you're not aggressive enough, then you won't win the race."
In Mr. Goenka's view, the race in the marketplace is a battle of cost. Producing Mahindra's e2o, he says, costs $3,000 to $3,500 more than a similar conventional car, and the premium needs to fall by two-thirds.
"I believe the customer would be willing to pay $1,000 or so," he said. Auto makers must be able to drop prices to a point where government subsidies aren't driving the market.
"Subsidies cannot last forever," he said. Companies like Mahindra, which sell the bulk of its cars in emerging markets, have a jump on building lower-cost cars.
Joining the FIA's Formula E circuit also helps because Mahindra can share in the significant investment the race series is making in electric-vehicle technology. That kind of collaboration has been lacking in India, which introduces an incentive for electric vehicles on April 1.
Mr. Goenka said Indian policy makers "have started with small budgetary allocation but have a rather large master plan." Regulators aim for four million to five million electric vehicles, including two-wheelers, by around the turn of the decade.
For now, Mahindra's effort in its home market is stuck in the slow lane, reflecting struggles Nissan and GM have experienced in sustaining consistent demand. Mahindra sells about 75 e2os a month in India.
---
The Upshot is a business column by Journal bureau chiefs. John Stoll is the Detroit chief and runs global auto coverage.
Credit: By John D. Stoll
Subject: Automobile industry; Automobile racing; Electric vehicles
Location: United States--US India
Company / organization: Name: Andretti Autosport; NAICS: 711219; Name: Renault SA; NAICS: 336111; Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Nissan Motor Co Ltd; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999; Name: Audi AG; NAICS: 336111; Name: Mahindra & Mahindra Ltd; NAICS: 541512; Name: Federation Internationale de l Automobile; NAICS: 711219
Classification: 7500: Product planning & development; 8307: Arts, entertainment & recreation; 8680: Transportation equipment industry; 9179: Asia & the Pacific
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.8
Publication year: 2015
Publication date: Mar 18, 2015
Publisher: Dow Jon es & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1664084126
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1664084126?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Cleared to Sell Vehicles from Company-Owned Dealerships in N.J. Governor Chris Christie signs bill allowing up to four locations
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Mar 2015: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Motors Inc. can sell vehicles from company-owned dealerships in New Jersey after Gov. Chris Christie signed a bill allowing up to four locations.
It represents an important victory for Tesla in a big market for luxury vehicles. Last year New Jersey's Motor Vehicle Commission revoked its dealership licenses.
Tesla has fought efforts in nearly every state to halt its direct sales method, which doesn't use independent dealers.
A similar bill is making its way through the Georgia legislature and Tesla also is hoping to have a bill passed in Texas, which prohibits direct sales. Customers in every state can order cars online and have them delivered to their state, but without dealerships people can't easily test out cars.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Mar 18, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1664312683
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1664312683?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla to Upgrade Cars Through the Internet; Auto maker seeks to add features, like autonomous driving, directly to Model S owners
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Mar 2015: n/a.
ProQuest document link
Abstract:
Since entering the auto industry more than a decade ago with an electric sports-car project, Mr. Musk has been challenging the auto industry's century-old practice of selling cars through a dealer network.
Full text: Tesla Motors Inc. is positioning itself as a software company, as well as an auto maker, committing to a series of upgrades for its Model S electric cars that it will start delivering to owners via the Internet within the next 10 days.
The upgrades will be rolled out over a series of months and will include a suite of groundbreaking features that would allow the car to operate with complete autonomy on highways. Unlike most of the auto industry's upgrades, which are delivered to customers through an independent dealer network, Tesla is building on a sales and marketing philosophy that cuts out the middleman by sending the new software directly to its cars over their embedded wireless connections.
"We really designed the Model S to be a very sophisticated computer on wheels," Chief Executive Elon Musk said Thursday during a conference call with reporters and analysts.
Since entering the auto industry more than a decade ago with an electric sports-car project, Mr. Musk has been challenging the auto industry's century-old practice of selling cars through a dealer network. His confidence in the near-term prospects of the electric car has been unsurpassed, and his foray into using software to make major improvements in vehicles that are already on the road is largely unrivaled.
"We view it in the same way as updating your phone or your laptop," he said. "It is a fundamental paradigm shift from the way that cars have been done in the past."
The first round of upgrades, set to reach the cars within two weeks, includes software that analyzes a driver's route, road conditions and even topography, and tells the driver if the car is going out of range of a charging location. The warning is meant to address "range anxiety," the fear of running out of power. The new software also will feature blind-spot detection, emergency automatic braking, and a "valet" mode, which would prevent an attendant from driving the car at high speeds or using it to access personal information.
The next upgrade, dubbed 7.0 and expected in a few months, will change the user interface and allow the car to drive itself on highways. The driver could let go of the steering wheel, permitting the car to guide itself to its destination.
The upgrade also would offer the option of having the car drive itself, without a human occupant, to pick someone up. But that feature is designed to work only on private property, and not public roads.
On Tuesday, Mr. Musk hinted that the current Model S had the capacity to do most types of autonomous driving, except possibly in complex urban environments. He called autonomous driving capability a "solved problem."
Tesla's ability to update its vehicle isn't new. The company has been supplying updates since it launched the car in the summer of 2012. Now, however, the upgrades are becoming more significant. The latest download, for example, will allow the car to communicate with the company's system of fast-charging locations called Superchargers.
"You don't need to think ahead or do any calculations. It makes it almost impossible to run out [of power] unless you do it intentionally," Mr. Musk said on the call.
Mark Wakefield, a partner at management consulting firm AlixPartners LLP, said Tesla is well ahead of the rest of the automotive industry. Its willingness to take risks has given it a jump on competitors. "They are certainly more gutsy," he said.
Mr. Musk said he aims to make updates every three months, continually adding or changing features. Like a smartphone, there may be a limit to the updates that can be made to older vehicles. And some of the capabilities added with software rely on new sensing equipment that became available only in the newest versions of the car in October.
Tesla built the car with powerful processing capability that initially was greater than necessary for what the car did. However, Jen-Hsun Huang, chief executive of graphical chip maker Nvidia Corp., said some of those processors now are being strained as Tesla has increased its cars' capabilities.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Software upgrading; Roads & highways
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Mar 19, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1664552410
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1664552410?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Tesla Upgrade to Make Cars Self-Driving
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Mar 2015: B.3.
ProQuest document link
Abstract:
Since entering the auto industry more than a decade ago, Mr. Musk has been challenging the auto industry's practice of selling cars through a dealer network.
Full text: Tesla Motors Inc. is positioning itself as a software company, as well as an auto maker, committing to a series of upgrades for its Model S electric cars that it will start delivering to owners via the Internet within the next 10 days.
The upgrades will be rolled out over a series of months and will include a suite of groundbreaking features that would allow the car to operate with complete autonomy on highways. Unlike most of the auto industry's upgrades, which are delivered to customers through an independent dealer network, Tesla is building on a sales and marketing philosophy that cuts out the middleman by sending the new software directly to its cars over their wireless connections.
"We really designed the Model S to be a very sophisticated computer on wheels," Chief Executive Elon Musk said Thursday during a conference call with reporters and analysts.
Since entering the auto industry more than a decade ago, Mr. Musk has been challenging the auto industry's practice of selling cars through a dealer network. His confidence in the near-term prospects of the electric car has been unsurpassed, and his foray into using software to make major improvements in vehicles that are already on the road is largely unrivaled.
"We view it in the same way as updating your phone or your laptop," he said. "It is a fundamental paradigm shift."
The first round of upgrades, set to reach the cars within two weeks, includes software that analyzes a driver's route, road conditions and even topography, and tells the driver if the car is going out of range of a charging location. The warning is meant to address "range anxiety," the fear of running out of power. The new software also will feature blind-spot detection, emergency automatic braking, and a "valet" mode, which would prevent an attendant from driving the car at high speeds or using it to access personal information.
The next upgrade, dubbed 7.0 and expected in a few months, will change the user interface and allow the car to drive itself on highways. The driver could let go of the steering wheel, permitting the car to guide itself to its destination.
The upgrade also would offer the option of having the car drive itself, without a human occupant, to pick someone up. But that feature is designed to work only on private property, and not public roads.
On Tuesday, Mr. Musk hinted that the current Model S had the capacity to do most types of autonomous driving. He called autonomous driving capability a "solved problem."
Tesla's ability to update its vehicle isn't new. The company has been supplying updates since it launched the car in the summer of 2012. Now, however, the upgrades are becoming more significant. The latest download, for example, will allow the car to communicate with the company's system of fast-charging locations called Superchargers.
"It makes it almost impossible to run out [of power] unless you do it intentionally," Mr. Musk said on the call.
Mark Wakefield, a partner at management consulting firm AlixPartners LLP, said Tesla is well ahead of the rest of the automotive industry. Its willingness to take risks has given it a jump on competitors. "They are certainly more gutsy," he said.
Like a smartphone, there may be a limit to the updates that can be made to older vehicles. And some of the capabilities added with software rely on new sensing equipment that became available only in the newest versions of the car in October.
Credit: By Mike Ramsey
Subject: Automobile industry; Vehicles; Software industry
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry; 8302: Software & computer services industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2015
Publication date: Mar 20, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1664688690
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1664688690?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla: Just Another Car Company; Will it be bought by a traditional auto maker needing electric vehicles to meet Obama's fuel-economy rules?
Author: Jenkins, Holman W; Jr.
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Mar 2015: n/a.
ProQuest document link
Abstract:
Part of Tesla's market value, then, is attributable to the likelihood that it will be acquired by another car maker needing electric vehicles to offset its gasoline-powered vehicles. [...]passenger cars of every description account for less than 5% of greenhouse-gas emissions.
Full text: Elon Musk has proved that a market exists for electric cars, despite their many inconveniences, especially if they come wrapped in taxpayer subsidies. He hasn't proved he can make a profit.
His idea of an industry at scale, he would probably be loath to admit, almost certainly depends on government intervention to make gasoline-powered cars increasingly prohibited. His gigafactory, to which he will commit $2 billion to double the world-wide capacity of existing lithium-ion batteries, is a mute acknowledgment that he sees no battery breakthroughs in the offing that would transform the problems of range anxiety and recharge times.
His latest announcement at least has him no longer attacking journalists who mention the problem of range. He updated the car's software so it will constantly tell the driver if he can hope to reach his destination or the nearest charging station. When a driver gets there, though, he'll still spend hours, not minutes, filling up.
Mr. Musk also announced new self-driving features like those all auto makers are working on or have introduced in luxury cars that compete with Tesla's. He's been playing catch-up in safety technology too. Even Tesla's innovations with electric power are not so alien and revolutionary that other car makers have not been able quickly to adopt them for their own vehicles.
In what way, then, is Tesla disruptive, the fanboy description of companies that come along and render obsolete what went before?
Good question. When a user leaves his driveway in a Tesla, he still wastes time staring out a windshield and gripping a wheel. He still sits in traffic. As with any other car, Tesla's electronics are long out of date before the car's useful life has expired. As with any other car, a Tesla owner ties up thousands of dollars in a piece of equipment that sits idle 95% of the time. Uber is disruptive. Tesla isn't. Tesla is disruptive mostly of a driver's confidence that he's going to reach his destination without needing a tow.
Tesla solves no problem of the automobile. It only creates a new problem.
Nonetheless Tesla's stock price is impressive, even if it is down recently. At $25 billion, Tesla is worth almost half of Ford, though Ford sells 70 times as many vehicles, and profitably.
As the perpetually blunt Sergio Marchionne of Fiat Chrysler has pointed out, Obama fuel-economy rules virtually require car companies to produce electric cars at a loss. Part of Tesla's market value, then, is attributable to the likelihood that it will be acquired by another car maker needing electric vehicles to offset its gasoline-powered vehicles. But here's an irony: In a world where other car makers are forced to build and sell electric cars too, Tesla's golden brand gives it a leg up, but Tesla does not have the option of forever losing money on electric cars. To fully realize its brand value Tesla might have to sell itself to an auto maker that does.
California has tried to solve this problem for Tesla with its zero-emissions vehicle mandates, which have other makers buying ZEV credits from Tesla. But the sheer idiocy of these subsidies is a continual risk to Tesla. A ZEV car in California is one with zero emissions at the tailpipe, no matter how much environmental degradation it causes upstream. Toyota, for one, has recently switched its attention to hydrogen-fueled cars, which emit only water and warm air at the tailpipe, never mind that 95% of the world's hydrogen is manufactured from fossil fuels.
Policies that are so transparently stupid and perverse, like the policy of subsidizing rich people with $7,500 tax credits to indulge themselves with Tesla's products, would not seem a sound basis for a scale auto manufacturer, which Tesla aspires to become.
On any given day a meme could get rolling in the media that the policies that prop up Tesla are a fraud, pretending to do something about global warming when they don't. Even if the electricity powering a Tesla didn't come mostly from coal, the niche in which Tesla competes, luxury cars, is a vanishingly small part of the putative problem. In fact, passenger cars of every description account for less than 5% of greenhouse-gas emissions.
What P.T. Barnum said about the American public may be doubly true of American politicians, but even a congressman might come to see through Mr. Musk's feverish attempts to associate Tesla with solar power even though a Tesla is not a solar-powered car.
Mr. Musk has done a superb job of casting a glow of political nicey-nice around his company. He's a brilliant entrepreneur. Unlike some other overconfident public figures, Mr. Musk probably won't embarrass his investors by texting photos of his private parts to strange women or joking about President Obama's taste in movies. But overlooked may be a considerable amount of political risk that's not properly reflected in Tesla's stock price.
Credit: By Holman W. Jenkins, Jr.
Subject: Automobile industry; Research & development--R & D; Subsidies; Luxury automobiles; Electric vehicles; Electricity distribution
Location: California
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Mar 24, 2015
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1665587868
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1665587868?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Japanese Robot Maker Fanuc Reveals Some of Its Secrets; Company helps make iPhones and Teslas; greetings in a canary yellow blazer
Author: Pfanner, Eric
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Mar 2015: n/a.
ProQuest document link
Abstract:
In the last year, sales of machine tools and industrial robots have surged to smartphone providers such as Apple Inc., auto makers such as Tesla Motors Inc. and other customers. Fanuc's traditional strength is computer numerical control, or CNC, equipment, which is used to control the movement of machine tools--both its own and those from other providers.
Full text: OSHINO, Japan--Twin statues of Ebisu, Japan's Shinto god of prosperity, guard the gates. A stone marker proclaims that this is "Fanuc Forest."
It's the home of the best-kept secret in corporate Japan, a $50 billion-plus industrial powerhouse that hides away in the woods near Mount Fuji.
Inside the complex, scores of bright yellow robots toil away 24 hours a day in 22 factories, replicating themselves. Watched over by a handful of human workers, they build more robots and other factory machinery--and rake in profits for their owner, Fanuc Corp.
Until recently, most outsiders were stopped at the gates--especially investors who coveted a piece of the more than $6.8 billion in cash that Fanuc has amassed. In the last year, sales of machine tools and industrial robots have surged to smartphone providers such as Apple Inc., auto makers such as Tesla Motors Inc. and other customers.
But now Fanuc says it is opening up, answering a call from Prime Minister Shinzo Abe for Japanese companies to be more responsive to investors. Foreign investors are pouring money into Japan's stock market, fueling a rally that has lifted the Nikkei 225 stock average to its highest levels in 15 years.
Fanuc Chief Executive Yoshiharu Inaba said in an interview Thursday that the company would detail plans to boost shareholder returns by the end of April. Fanuc has also created, for the first time, a "shareholder relations" department.
"I would like to build up mutual trust with our shareholders by creating opportunities for active dialogue," Mr. Inaba said.
The company has long been known for eschewing quarterly briefings and other investor contacts that are standard elsewhere. Email exchanges with the outside world have been restricted to customers, who are required to use a special encryption system. Others are asked to send faxes.
Mr. Inaba's father, Seiuemon Inaba, oversaw the birth of Fanuc as a division of the electronics giant Fujitsu Ltd. in the 1950s and led the company after its spinoff from Fujitsu in 1972.
The younger Mr. Inaba, now chief executive, may be moving to modernize Fanuc, but he clings to some of its quirks, greeting a visitor in a canary yellow blazer, the same color as Fanuc's robots and most of its factory buildings.
Mr. Inaba uses military metaphors to explain why Fanuc has been wary about opening up.
"Business is war, with rules," he said. "To disclose information such as what kinds of products are sold in which markets and how profitable they are is like, if I may say so, letting your enemy know how many tanks, aircraft or troops are mobilized in which theater."
Big cash balances drew the interest of Daniel Loeb, who runs a New York hedge fund, Third Point LLC. The firm shined a spotlight on Fanuc in February when it disclosed that it had taken a stake. Mr. Loeb said the company "reminds us of Apple in product approach'' but criticized it for what he described as insufficient shareholder returns. Since then, Fanuc shares have risen 32%.
Mr. Loeb called on Fanuc to increase its dividend and buy back shares.
The approach has worked well for Fanuc, which is riding a wave of factory automation in China. Its Robodrill machine tools are used to help shape the aluminum cases for smartphones from Apple, Xiaomi Inc. of China and other brands, according to analysts and other people familiar with Fanuc's business. Apple and Tesla didn't respond to requests for comment, and Xiaomi declined to comment.
Protocon Engineering Ltd., a family-owned maker of aircraft parts in Southend-on-Sea, England, last year took delivery of its seventh Fanuc machine. The Japanese company's tools are "fast, accurate and extremely reliable," said Geoff Smith, managing director of Protocon.
Fanuc's traditional strength is computer numerical control, or CNC, equipment, which is used to control the movement of machine tools--both its own and those from other providers. Mr. Inaba said Fanuc makes 22,000 to 23,000 CNC units a month.
Its industrial robots, traditionally used by car makers, are now in demand elsewhere. In the company's technical center, a demonstration robot takes a container full of pills, detects the color of each and sorts them into piles by color in a matter of seconds.
Sal Spada, an analyst at Arc Advisory Group, said Siemens AG of Germany has an edge at the high end, with customers seeking the most precise CNC equipment, but Fanuc has an advantage in volume. It is helped by the efficiency of its factories, which rely on the company's own robots to do much of the work.
One 86,000-square-foot (8,000-square-meter) factory in Oshino, making industrial robots, is staffed by only four people at a time. In another factory, robots can assemble an industrial motor in 40 seconds.
The huge investments that such plants require present a high barrier to entry. Lately, Fanuc has also been helped by the weakness of the yen, because it does all its manufacturing in Japan. In February, the company said it would spend more than $1 billion to build additional factories and research sites.
"They want to own the factory floor," Mr. Spada said.
Fanuc, which had a market capitalization of about $53 billion as of Thursday, has forecast an operating profit of $2.3 billion for the year ending March 31 on sales of $5.7 billion. That is a margin of nearly 40%.
Mr. Inaba said Mr. Loeb's investment wasn't the reason for Fanuc's decision to improve communications with investors and to increase shareholder returns. Instead, he said, the shift was prompted by the government's campaign for better corporate governance and by his own sense that change was due.
To avoid distractions, Mr. Inaba said the company would outsource much of the shareholder-relations department's work to a consulting firm.
"I am the kind of person who would want to talk about everything, and I am trying hard to restrain myself," he said.
Chieko Tsuneoka contributed to this article.
Write to Eric Pfanner at eric.pfanner@wsj.com
Credit: By Eric Pfanner
Subject: Factories; Robots; Investments; Disclosure; Smartphones
Location: Japan Mount Fuji
People: Abe, Shinzo
Company / organization: Name: Fujitsu Ltd; NAICS: 541512, 541519, 334111, 334310; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Mar 26, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1666798114
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1666798114?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Japanese Robot Maker Fanuc Reveals Some of Its Secrets; Company helps make iPhones and Teslas; greetings in a canary yellow blazer
Author: Pfanner, Eric
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Mar 2015: n/a.
ProQuest document link
Abstract:
In the last year, sales of machine tools and industrial robots have surged to smartphone providers such as Apple Inc., auto makers such as Tesla Motors Inc. and other customers. Fanuc's traditional strength is computer numerical control, or CNC, equipment, which is used to control the movement of machine tools--both its own and those from other providers.
Full text: OSHINO, Japan--Twin statues of Ebisu, Japan's Shinto god of prosperity, guard the gates. A stone marker proclaims that this is "Fanuc Forest."
It's the home of the best-kept secret in corporate Japan, a $50 billion-plus industrial powerhouse that hides away in the woods near Mount Fuji.
Inside the complex, scores of bright yellow robots toil away 24 hours a day in 22 factories, replicating themselves. Watched over by a handful of human workers, they build more robots and other factory machinery--and rake in profits for their owner, Fanuc Corp.
Until recently, most outsiders were stopped at the gates--especially investors who coveted a piece of the more than $6.8 billion in cash that Fanuc has amassed. In the last year, sales of machine tools and industrial robots have surged to smartphone providers such as Apple Inc., auto makers such as Tesla Motors Inc. and other customers.
But now Fanuc says it is opening up, answering a call from Prime Minister Shinzo Abe for Japanese companies to be more responsive to investors. Foreign investors are pouring money into Japan's stock market, fueling a rally that has lifted the Nikkei 225 stock average to its highest levels in 15 years.
Fanuc Chief Executive Yoshiharu Inaba said in an interview Thursday that the company would detail plans to boost shareholder returns by the end of April. Fanuc has also created, for the first time, a "shareholder relations" department.
"I would like to build up mutual trust with our shareholders by creating opportunities for active dialogue," Mr. Inaba said.
The company has long been known for eschewing quarterly briefings and other investor contacts that are standard elsewhere. Email exchanges with the outside world have been restricted to customers, who are required to use a special encryption system. Others are asked to send faxes.
Mr. Inaba's father, Seiuemon Inaba, oversaw the birth of Fanuc as a division of the electronics giant Fujitsu Ltd. in the 1950s and led the company after its spinoff from Fujitsu in 1972.
The younger Mr. Inaba, now chief executive, may be moving to modernize Fanuc, but he clings to some of its quirks, greeting a visitor in a canary yellow blazer, the same color as Fanuc's robots and most of its factory buildings.
Mr. Inaba uses military metaphors to explain why Fanuc has been wary about opening up.
"Business is war, with rules," he said. "To disclose information such as what kinds of products are sold in which markets and how profitable they are is like, if I may say so, letting your enemy know how many tanks, aircraft or troops are mobilized in which theater."
Big cash balances drew the interest of Daniel Loeb, who runs a New York hedge fund, Third Point LLC. The firm shined a spotlight on Fanuc in February when it disclosed that it had taken a stake. Mr. Loeb said the company "reminds us of Apple in product approach'' but criticized it for what he described as insufficient shareholder returns. Since then, Fanuc shares have risen 32%.
Mr. Loeb called on Fanuc to increase its dividend and buy back shares.
The approach has worked well for Fanuc, which is riding a wave of factory automation in China. Its Robodrill machine tools are used to help shape the aluminum cases for smartphones from Apple, Xiaomi Inc. of China and other brands, according to analysts and other people familiar with Fanuc's business. Apple and Tesla didn't respond to requests for comment, and Xiaomi declined to comment.
Protocon Engineering Ltd., a family-owned maker of aircraft parts in Southend-on-Sea, England, last year took delivery of its seventh Fanuc machine. The Japanese company's tools are "fast, accurate and extremely reliable," said Geoff Smith, managing director of Protocon.
Fanuc's traditional strength is computer numerical control, or CNC, equipment, which is used to control the movement of machine tools--both its own and those from other providers. Mr. Inaba said Fanuc makes 22,000 to 23,000 CNC units a month.
Its industrial robots, traditionally used by car makers, are now in demand elsewhere. In the company's technical center, a demonstration robot takes a container full of pills, detects the color of each and sorts them into piles by color in a matter of seconds.
Sal Spada, an analyst at Arc Advisory Group, said Siemens AG of Germany has an edge at the high end, with customers seeking the most precise CNC equipment, but Fanuc has an advantage in volume. It is helped by the efficiency of its factories, which rely on the company's own robots to do much of the work.
One 86,000-square-foot (8,000-square-meter) factory in Oshino, making industrial robots, is staffed by only four people at a time. In another factory, robots can assemble an industrial motor in 40 seconds.
The huge investments that such plants require present a high barrier to entry. Lately, Fanuc has also been helped by the weakness of the yen, because it does all its manufacturing in Japan. In February, the company said it would spend more than $1 billion to build additional factories and research sites.
"They want to own the factory floor," Mr. Spada said.
Fanuc, which had a market capitalization of about $53 billion as of Thursday, has forecast an operating profit of $2.3 billion for the year ending March 31 on sales of $5.7 billion. That is a margin of nearly 40%.
Mr. Inaba said Mr. Loeb's investment wasn't the reason for Fanuc's decision to improve communications with investors and to increase shareholder returns. Instead, he said, the shift was prompted by the government's campaign for better corporate governance and by his own sense that change was due.
To avoid distractions, Mr. Inaba said the company would outsource much of the shareholder-relations department's work to a consulting firm.
"I am the kind of person who would want to talk about everything, and I am trying hard to restrain myself," he said.
Chieko Tsuneoka contributed to this article.
Write to Eric Pfanner at eric.pfanner@wsj.com
Credit: By Eric Pfanner
Subject: Factories; Robots; Investments; Disclosure; Smartphones
Location: Japan Mount Fuji
People: Abe, Shinzo
Company / organization: Name: Fujitsu Ltd; NAICS: 541512, 541519, 334111, 334310; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Mar 27, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1666865849
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1666865849?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Regulators Have Hands Full With Tesla's Plan for Hands-Free Driving; Electric car maker will soon enable owners to let car do driving on interstate and operate without an occupant on private property
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Mar 2015: n/a.
ProQuest document link
Abstract:
Tesla this summer will send software updates to owners that will enable hands-free driving on the interstate, and the ability to operate the car without an occupant on private property.
Full text: In recent years, Tesla Motors Inc. has provided auto executives and regulators a better view into the nascent electric vehicle market. Now the Silicon Valley auto maker is in focus for another reason: autonomous vehicles.
Tesla this summer will send software updates to owners that will enable hands-free driving on the interstate, and the ability to operate the car without an occupant on private property. The technology could put Tesla ahead of German rivals like Audi AG and Daimler AG's Mercedes-Benz, but will also test the regulatory and legal framework around autonomous vehicles.
The biggest questions may be on Tesla's home turf.
In California, where Tesla is based and the bulk of its Model S sedans are sold, vehicles with too much autonomy could run afoul of laws that require a specially trained driver to operate a vehicle with self-driving features. California's regulators have been talking to Tesla since Elon Musk announced the new functionality as part of a 7.0 software update earlier this month.
"We have been trying to get a handle on what they are planning to do," Bernard Soriano, deputy director of the state Department of Motor Vehicles, said. Mr. Soriano has been hustling to write regulations designed for regular drivers, but those codes aren't complete.
"We are knee-deep in it," he said. For now, California's regulations for autonomous vehicles set up rules that are designed for testing by auto makers, not for operations by regular drivers.
Tesla's "fetch" feature presents broader liability quandaries in case of accidents. Fetch mode allows vehicle to drive without an occupant on private property to pick up the driver, presumably to be used in parking lots or garages.
The system, however, is more complex than anything available on the market, including a system due to be fitted on the Audi Q7 sport utility when it comes out in 2016. Audi's system will have an autonomous mode with a "check-in" feature that makes sure the driver is awake or paying some kind of attention to the road, so the driver would be responsible if there were an accident or some other problem.
Carl Tobias, a product liability law professor at the University of Richmond, says fetch is more advanced and raises questions. What would happen if the car struck a person in a parking lot or was involved in an accident? Who would be cited with criminal or civil charges?
"Technology is always running ahead of the law, but in this case, it is running way ahead of the law," said Mr. Tobias. Tesla's fetch mode is designed to prevent most collisions, but it might be impossible to stop them all. While traffic laws may not be enforced, civil and criminal laws would still be in effect even on private property.
As it stands, there are no federal laws prohibiting either function--and in the U.S. if it isn't illegal, it is legal. Regulators at the National Highway Traffic Safety Administration, however, can recall vehicles that they deem unsafe, and officials will be watching the rollout closely.
"Like all vehicles on our roads, it must meet the applicable federal safety standards and must not present an unreasonable risk to safety," the federal agency said in a statement.
That said, the government and new NHTSA chief Mark Rosekind is very interested in promoting the technology as it holds the potential for great societal benefit, from reducing crashes to smoothing out traffic congestion and enabling driving for elderly or infirm people. It is very likely that the agency will be in close contact with Tesla ahead of the software release, an official said, and Mr. Musk said his company is working with the regulator.
Tesla hasn't provided many details on what exactly the new software will enable, but Mr. Musk described its capabilities as roughly being able to drive from one city to another on the interstate with hands-free driving. The driver would ostensibly be paying attention, but wouldn't have to keep his hands on the wheel or pedals and the car would tell the driver when he had to take control of the car again.
In addition, individual states could enact restrictions that set limits or requirements on safety features. Already, there are requirements governing the use of autonomous vehicles in California, Nevada, Michigan and Florida, but it is unclear whether Tesla's vehicle would qualify as "autonomous" and therefore run into special licensing requirements.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Traffic accidents & safety; Vehicles; Traffic congestion
Location: California
People: Musk, Elon
Company / organization: Name: University of Richmond; NAICS: 611310; Name: Audi AG; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999; Name: Daimler AG; NAICS: 336111
Product name: Audi Q7
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Mar 27, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1667051988
Document URL: https://login.ezproxy.uta.edu/login?url=https://se arch.proquest.com/docview/1667051988?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla Motors to Unveil New Product April 30; Not a car, could be stationary battery storage system
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Mar 2015: n/a.
ProQuest document link
Abstract:
"Major new Tesla product line--not a car--will be unveiled at our Hawthorne Design Studio on Thurs 8pm, April 30," Chief Executive Officer Elon Musksaid in a tweet on Monday.
Full text: Tesla Motors Inc. will unveil a new product on April 30 that isn't a car, but is likely a stationary battery storage system.
"Major new Tesla product line--not a car--will be unveiled at our Hawthorne Design Studio on Thurs 8pm, April 30," Chief Executive Officer Elon Musksaid in a tweet on Monday.
Tesla shares rose 3% to $190.51 in afternoon trading following the tweet.
Tesla has mentioned that it is working on a new stationary battery product in the past, but has given out few details about the product. Company officials said in February an announcement would be coming in a few months, which would coincide with the April 30th timing of the news conference. A Tesla spokeswoman declined to comment on whether it would be a stationary storage offering.
Mr. Musk also tweeted on Monday that he is "very optimistic about Tesla's long term future in China, despite our earlier mistakes. Have great faith in the Tesla china team."
Mr. Musk visited China and met with President Xi Jinping and other senior members of the Chinese government and also met with Tesla operations there in an attempt to reboot activities in the country.
Tesla's sales in the country have been disappointing and Mr. Musk shuffled management there. He said two weeks ago there is a broad misunderstanding of how difficult it is to charge vehicles in the country, but nonetheless, Tesla is adding more free charging stations in China than it has in other regions to try to address the concerns.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Research & development--R & D; Athletes
Location: China
People: Xi Jinping
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Mar 30, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1667386820
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1667386820?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla First-Quarter Car Deliveries Rise Above 10,000; Tesla looks to accelerated volume gains for rest of year
Author: Stoll, John D; Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Apr 2015: n/a.
ProQuest document link
Abstract:
In a rare retreat, Tesla outlined plans to cut jobs in China following its $108 million fourth-quarter loss and an inability to meet expectations in the world's largest light-vehicle market.
Full text: Tesla Motors Inc. said it delivered 10,030 vehicles in the first quarter, the latest indication the company's slow and steady sales growth needs to kick into overdrive to meet Chief Executive Elon Musk's ambitious sales goals.
Deliveries over the first three months of 2015 came in 500 vehicles above Tesla's initial forecast, and represent a 55% rise over the same period a year earlier. The numbers suggest the Silicon Valley electric-car maker is on pace to far exceed the 31,655 Model S sedans sold in 2014.
Mr. Musk, however, has set a target of 55,000 deliveries in 2015, and 500,000 by 2020. If met, these benchmarks would transform Tesla's profile in the cutthroat car business. While a fraction of what is sold annually by most auto makers in the world, it is an audacious goal for company that started mass-producing automobiles less than three years ago.
To reach his target, Tesla's billionaire founder needs a flawless debut of a new model--the Model X sport utility vehicles--in the second half of the year. To date, Mr. Musk has struggled to hit projections and launch vehicles that meet initial timing or pricing expectations, so the Model X's launch poses a test of Tesla's ability to make the leap from niche to mainstream.
Tesla typically waits until well after a quarter ends to disclose sales results, bucking an industry trend of reporting sales on a monthly basis. Tesla's cloistered approach has led to a wild variance in estimates of the company's sales and profits. It will now report quarterly sales within three days of a quarter ending in an effort to avoid confusion.
Still, there is more to the Tesla story than quarterly sales.
The auto maker has used attractive lease deals to sustain demand in the U.S. amid low gas prices that are souring the outlook for other electric cars, but has struggled to expand to some new markets. In a rare retreat, Tesla outlined plans to cut jobs in China following its $108 million fourth-quarter loss and an inability to meet expectations in the world's largest light-vehicle market.
Mr. Musk visited China this past week and expressed confidence in his team in the region, after switching management early in the year. He often takes to his Twitter account to drop hints about future plans.
Red ink continues at Tesla even as revenue climbs, partially because expenses are rising at a rapid clip. The auto maker has added staff, and boosted its advertising budget. It has dished out millions to install so-called supercharging stations in North America, Europe and Asia to better appeal to buyers worried about infrastructure.
Mr. Musk has said Tesla won't be profitable until 2020, by which time it expects to sell more vehicles globally than Volvo Car Corp.--a company with a near-century's worth of history--currently does. The path to that goal will be costly, requiring a new battery plant estimated to cost between $4 billion and $5 billion to construct and operate.
Meanwhile, Tesla needs to continue investing in a global supercharger network. Facing regulatory demands and competitive pressure, it is funding an capital-expenditures budget tagged at $1.5 billion in 2015, nearly equivalent to the amount of cash it has on hand.
Tesla's sales are growing, but not the same rate of many of the Silicon Valley tech firms with equally ambitious horizons. In 2014, Tesla delivered 31,655 vehicles--6,457 vehicles in the first quarter; 7,579 in the second; 7,785 in the third; and 9,834 during the final three months.
Dan Galves, an Credit-Suisse analyst, says the company needs to pick up the pace.
"They said they would do 40% of the full year in the first half, so that means they have to do 22,000 vehicles (in the first half)," Mr. Galves said in an interview. "So they need to do 12,000 in the second quarter...they need to accelerate a bit."
Mr. Galves, is encouraged by an apparent improvement in Tesla's Europe sales owing to the introduction of all-wheel-drive variants. And the company has made a series of changes to the car in China, improving its navigation system and adding more charging.
Tesla has prized its independent status in the auto industry, and has used moves like scrapping the traditional dealer model by selling direct to customers as proof it will shatter convention. But Karl Brauer, an analyst with Kelley Blue Book said Mr. Musk's decision to disclose delivery numbers within three days after a quarter ends brings it closer to fitting the profile of a conventional auto company.
"We have decided to take this approach because inaccurate sources of information are sometimes used by others to project the number of vehicle deliveries," Tesla said in a statement. "This is only one measure of our financial performance and should not be relied on as an indicator of our quarterly financial result."
Tesla's decision to not release monthly sales reports has led third parties--such as WardsAuto.com, Autodata Corp. or Automotive News--to estimate U.S. results. Those firms often differ in their forecasts.
For example, WardsAuto.com estimates Tesla sold 1,039 vehicles in March. Autodata, meanwhile, estimates March deliveries to have equaled 1,350, and Automotive News pins the number at 1,200.
Tesla sold as roughly many cars in a quarter globally over the first quarter as General Motors Co. sells in a day in the U.S. Still, Tesla investors have an appetite for any bits of news coming from the company.
On Wednesday, Tesla published an April Fools' joke on Twitter, saying it would create a rival to the Apple Watch. While the tweet was clearly not serious, the stock jumped about $2 on heavy volume when the news hit shortly before market close.
The stock almost immediately retreated from its pop though, settling the day just about where it was before Tesla delivered the joke. A similar bounce took place on March 30, when Mr. Musk posted a tweet saying Tesla will unveil a product on April 30 that isn't a car.
Tesla shares closed Thursday up 1.8% at $191. Its $24 billion in market capitalization compares with GM's $58.8 billion in stock-market value, and Ford Motor Co.'s $63.4 billion.
Write to John D. Stoll at john.stoll@wsj.com and Mike Ramsey at michael.ramsey@wsj.com
Corrections & Amplifications: Tesla Motors said it delivered 10,030 vehicles in the first quarter, a 55% increase over a year ago. An earlier version of this article had the incorrect year.
Credit: By John D. Stoll and Mike Ramsey
Subject: Automobile industry; Financial performance; Vehicles; Automobile sales
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Product name: Apple Watch
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Apr 3, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1669458021
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1669458021?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Model S: The Future Is Here; The all-electric Tesla Model S is a daring public experiment in automotive vision that makes the finest, fastest luxury cars feel like Edwardian antiques
Author: Neil, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Apr 2015: n/a.
ProQuest document link
Abstract:
The all-electric Tesla Model S sedan is brilliant , beautiful, as user-friendly as a smartphone, fast as hell, quieter than C-Span, American made and years ahead of its luxury-sedan competition. [...]a feature could be programmed according to the driver's personal calendar (multiple drivers, really) that is synced to the car, as well as music in the cloud, on the Apple Watch, Pandora preferences, Netflix "Recently Watched" list and maybe--it's theoretically possible--whether you're ovulating.
Full text: The all-electric Tesla Model S sedan is brilliant , beautiful, as user-friendly as a smartphone, fast as hell, quieter than C-Span, American made and years ahead of its luxury-sedan competition. But it isn't perfect. I see things I would change. Those jazzy polished-zinc door handles, for example, part of the cabin's circumnavigating bands of alloy and leather, weren't shaped for human hands. The 17-inch capacitive touch screen panel that dominates the forward cabin still seems clumsily placed--design by procurement. I expect Tesla's next-generation touch screen and graphical user interfaces to be fused across the forward cabin bulkhead like a bandit's mask.
Nor would I be a class traitor if I could get something more intimate from Tesla's color and trim department. I suppose it would be un-Buddhist to wish for diamond-pleat suede? These 12-way power adjustable seats are upholstered like high-tech dentist's chairs.
Sometimes I miss the intimacy of a conventional, wraparound cockpit with a cabin-dividing center console. I long for it like a missing limb. The Model S doesn't require driveline tunnels, prop shafts or torque tubes. Not even the new all-wheel-drive models, because there are two traction motors, one fore and one aft. The floor pan is as flat as a sheet of plywood and about the same size.
Here's another problem: You can forget which of the enormous storage compartments you've put your groceries in: the front, where there is no occupying combustion motor; or the rear, where there is no evidence of a battery pack. I propose programming the daytime running lights to indicate with a single flash, forward or rear, to remind owners which end was opened last. Make it part of the proximity-approach routine. About 200 milliseconds ought to do.
I would also like some sort of welcoming musical refrain as I approach the car. Maybe the theme from "Shaft." Can you dig it? And, obviously, such a feature could be programmed according to the driver's personal calendar (multiple drivers, really) that is synced to the car, as well as music in the cloud, on the Apple Watch, Pandora preferences, Netflix "Recently Watched" list and maybe--it's theoretically possible--whether you're ovulating. Perhaps some Jimmy Buffett, m'dear? I've got a lot of good ideas.
Mostly, though, what I have is awe. The Model S is a daring public experiment in automotive vision that has the impudence to make the finest, fastest luxury cars feel like Edwardian antiques. I know a lot of gear heads. The only ones who don't think the Model S is the best in the world haven't driven one.
Here is a report from the field: My wife took some veterinarians to lunch in the P85D, and all they could talk about was the car's one-pedal operation. Due to its strong regenerative braking, when the driver eases off the pedal, the car slows down immediately, often rendering the use of the friction brakes unnecessary. That's so great, she said. Why aren't all cars like that? Why, indeed?
I was more interested in what it did when you didn't lift. This particular version of the car, the P85D, is the company's exuberant drag bot, with two mighty AC induction motors, producing together 691 hp and 687 pound-feet of torque, bonging electrons from an 85 kWh battery pack. What strikes me about this arrangement is how it must have been future-proofed years ago, because the surrounding packaging was almost undisturbed. Interior room is undiminished by the second motor. The front trunk, the "frunk," gives you a little over one cubic foot of capacity (2.3 cubic feet).
In a lighthearted moment, engineers created two Acceleration modes for the P85D: "Sport" and "Insane." There is actually a little slider icon. Among its party tricks, the P85D can go from what I'll call "standing there" to "going like hell" (100 mph) in a breathless, jaw-clenching eight seconds. It's Six Flags over Silicon Valley. In the one-eighth mile, the P85D just buries elite super four-seaters such as the Ferrari FF and the Porsche Panamera Turbo.
These demonstrations weren't the point, says Tesla. The idea of the dual-motor cars was to make the Teslas more attractive in Snowbelt markets. Uh-huh. Setting that aside, the acceleration of the Tesla is a singular automotive experience. And it's not all vanity. The battery that can discharge electrons so hard can soak up them up pretty fast, too. Tesla lists an EPA-rated range of 253 miles per charge (the nonperformance model, the 85D, lists 270). At any one of the company's nearly 200 supercharging stations in North America, the car can regain 50% charge in 20 minutes. By the way, there is no charge for supercharging.
And the nice thing about the Model S is that it keeps getting better even when in the driveway. Last month, Tesla said it would send the first batch of autopilot-enabling software to late-model customer cars. The data comes over the air, downloading over 3G mobile networks. As of last year, all Teslas have a suite of radar, sonar and optical sensors as standard equipment.
The first tranche of functions amount to a kind of super cruise control, giving the cars the ability to follow roads, adjust for traffic and automatically brake to avoid an accident. The more tantalizing prospect lies ahead, when cars will be able to park or put themselves away and be summoned by smartphone.
Little things: With the key fob in your pocket, you never have to lock or unlock the Model S. You approach, the door handles pop out. You sit down and put it in gear and drive off. You don't have to start the car, or stop it. After a few days in a Tesla, the experience of firing up some hunk of piston-flapping metal in the driveway--the anxious burr of an internal combustion in cold-start mode--seems a massive step backward.
With the P85D, the future is coming at us faster than ever.
Credit: By Dan Neil
Subject: Product design; Product introduction; Interactive computer systems
People: Buffett, Jimmy
Company / organization: Name: Netflix Inc; NAICS: 532230, 518210, 443142
Product name: Apple Watch, Ferrari FF
Publication title: Wall Street Journa l (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Apr 3, 2015
Section: Life
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1669486870
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1669486870?accountid=7117
Copyright: (c) 2 015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
2015 Tesla Model S P85D
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Apr 2015: n/a.
ProQuest document link
Abstract: None available.
Full text: A look at the new 2015 Tesla Model S P85D.
Tesla Model S: The Future Is Here
2015 Tesla Model S P85D
2015 Tesla Model S P85D
2015 Tesla Model S P85D
2015 Tesla Model S P85D
2015 Tesla Model S P85D
2015 Tesla Model S P85D
[Interactive content available online]
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Apr 3, 2015
Section: Interactives
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1669486881
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1669486881?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla or Bentley: Which Is Faster? Dan Neil put up his Tesla P85D against a Bentley Continental GT3-R for a friendly race
Author: Neil, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Apr 2015: n/a.
ProQuest document link
Abstract:
By the nature of the Tesla's mechanism--an all-electric car with two AC induction motors, front and rear, with 687 pound-feet of torque from 0 rpm that comes on like throwing a light switch, connected to the asphalt through four sticky contact patches--the P85D has big advantages in initial acceleration over an IC-powered supercar like the GT3-R (twin-turbo V8, 592 hp, 553 pound-feet of torque, eight-speed automatic).
Full text: Right up there with grumpy cats and honey badgers, videos of the Tesla P85D humbling super-sports cars in acceleration contests are easy to find. Ferrari, Lambo, Porsche, Corvette: The P85D has its way with them right up to 100 mph, which takes less than 8 seconds at the tip of a silken arrow.
But one should never believe anything on the Internet. So when the Tesla and a Bentley Continental GT3-R both arrived in the same week, I couldn't resist, and didn't really try. My friend Ezra Dyer (Yahoo Autos) and I took both cars to a private airfield--not for a drag race but a safe, civilized, simultaneous comparison of acceleration, and no wagering. Electric compared with internal combustion, new school versus the ancien regime.
By the nature of the Tesla's mechanism--an all-electric car with two AC induction motors, front and rear, with 687 pound-feet of torque from 0 rpm that comes on like throwing a light switch, connected to the asphalt through four sticky contact patches--the P85D has big advantages in initial acceleration over an IC-powered supercar like the GT3-R (twin-turbo V8, 592 hp, 553 pound-feet of torque, eight-speed automatic).
Among other factors, the Tesla's electric motors are able to modulate output in real time to maintain optimum traction and avoid wheel spinning. Result: perfect all-wheel-drive hookup, every time, with almost no driveline losses.
The Tesla's rate of system discharge is astonishing, over a half a megawatt. This high rate of discharge is authorized by the car's cheekily labeled "Insane" acceleration mode, accessible by way of a graphical slider.
And insane it is: Mat the Tesla's accelerator and 0-24 mph transpires before you know what hit you, in .84 seconds. Suddenly exposed to more than 1.3 g of longitudinal acceleration, any loose items in the cabin instantly fall rearward and cellphones get sucked out of pockets and purses. In 3.2 seconds, the car reaches 60 mph, uncannily quiet and hydraulic, a barrel ride over Electron Falls. That's 1.4 seconds quicker than the previous P85. Tesla promises an over-the-air upgrade for the P85D that will knock it down to 3.1 seconds.
In the other lane, the motorsports-tuned Bentley isn't messing about. But unlike the point-and-shoot Tesla, the Bentley requires some delicate torque braking of the automatic-equipped car, holding it on the line with the brake pedal until the "go" signal. Even if the Bentley gets away perfectly, the Tesla still bolts down the track, growing alarmingly small in the windscreen.
If it were an 1/8-mile comparison, the Bentley would be left for dead. But over a quarter-mile, the gear-multiplied, turbo-V8 British bruiser reasserts itself, roaring indignantly and cracking through several upshifts as it reels in the Tesla...closer, closer.
Both cross the quarter-mile stripe under 12 seconds, almost always tied. Both face forward, but only one looks ahead.
Credit: By Dan Neil
Subject: Product design; Motors; Product introduction
Company / organization: Name: Yahoo Inc; NAICS: 519130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Apr 3, 2015
Section: Life
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1669486937
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1669486937?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Crystal Ball: Send Us Your Guess on Tesla Shares; Our weekly prediction feature looks at the electric-car maker
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Apr 2015: n/a.
ProQuest document link
Abstract: None available.
Full text: Send your prediction to crystalball@wsj.com by midnight EDT Sunday, with your full name, city, state and phone number. The first reader who gets it right will be named in next Saturday's paper.
Electric-car maker Tesla Motors said Friday it delivered 10,030 vehicles in the first quarter of 2015--a quarterly record for the company, and up 55% from the same period a year prior. What price will the company's shares close at on Tuesday?
Congratulations to Ray Bordogna of Philadelphia, who came closest to guessing the Nasdaq Biotechnology Index close of 3563.08 this past Wednesday.
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Apr 3, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1669495711
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1669495711?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Advances Toward Lofty Sales Goal --- Electric-car maker's first quarter volume jumps 55% despite cheaper gasoline, China woes
Author: Stoll, John D; Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Apr 2015: B.1.
ProQuest document link
Abstract:
Tesla recently outlined plans to cut jobs in China following a $108 million fourth-quarter net loss and weaker-than-expected sales in the world's largest car market. Mr. Musk has said Tesla won't be profitable until 2020, by which time it expects to sell more vehicles globally than Volvo Car Corp. -- a company with a near-century's production history -- currently does.
Full text: Tesla Motors Inc. said it delivered about 200 more cars in its first quarter than the prior period, a sign it will need to kick sales into overdrive to meet Chief Executive Elon Musk's ambitious goal for the year.
Still, the 10,030 deliveries of its $71,000-and-up Model S electric car in the quarter was 500 vehicles above Tesla's February forecast, and represent a 55% rise over the same period a year earlier. The numbers suggest the Silicon Valley electric-car maker could far exceed the 31,655 Model S sedans sold in 2014.
Mr. Musk has set a target of 55,000 deliveries in 2015, and 500,000 by 2020. If met, these targets would transform the Palo Alto, Calif., auto maker's profile in the cutthroat car business. While its sales are a fraction of what is sold annually by most auto makers, the targets are audacious goals for a company that started mass-producing automobiles less than three years ago.
To reach his 2015 target, Tesla's billionaire founder needs a flawless debut of a new model -- the Model X sport-utility vehicle -- in the second half of the year, analysts said. Mr. Musk has struggled to hit past delivery projections and launch vehicles that meet initial timing or pricing expectations. The Model X launch in the third quarter poses a test of Tesla's ability to make the leap from niche to mainstream car maker.
A Tesla spokeswoman said the company it is confident that demand for its Model S and Model X will rise this year.
Tesla traditionally waited until well after a quarter ended to disclose sales results, bucking an industry trend of reporting sales on a monthly basis. Tesla's cloistered approach has led to a wild variance in industry estimates of the company's sales and profits. It said it would now report quarterly sales within three days of a quarter ending in an effort to avoid confusion.
The auto maker has offered lower cost leases through a new bank agreement, sustaining demand in the U.S. amid low gas prices. Tesla recently outlined plans to cut jobs in China following a $108 million fourth-quarter net loss and weaker-than-expected sales in the world's largest car market.
Mr. Musk visited China this past week and expressed confidence in his team in the region, after switching management early in the year.
The company released unit sales only. It didn't say when it would disclose revenue and profit. The auto maker recently has added staff, and boosted its advertising. It has dished out millions to install so-called supercharging stations in North America, Europe and Asia to better appeal to buyers worried about running out of power on longer trips.
Mr. Musk has said Tesla won't be profitable until 2020, by which time it expects to sell more vehicles globally than Volvo Car Corp. -- a company with a near-century's production history -- currently does. The path to that goal will be costly, requiring a new U.S. battery plant estimated to cost between $4 billion and $5 billion to construct and operate, it has said.
Its capital expenditures budget this year will reach $1.5 billion, almost equivalent to its $1.9 billion in cash on Dec. 31.
Tesla's sales are growing, but not as fast as previously. In 2014, Tesla delivered 31,655 vehicles -- 6,457 vehicles in the first quarter; 7,579 in the second; 7,785 in the third; and 9,834 during the final three months.
Dan Galves, a Credit-Suisse analyst, says the company needs to pick up the pace. "They said they would do 40% of the full year in the first half, so that means they have to do 22,000 vehicles [in the first half]," Mr. Galves said in an interview. "So they need to do 12,000 in the second quarter . . . they need to accelerate a bit."
Mr. Galves said he is encouraged by an apparent improvement in Tesla's Europe sales from its all-wheel-drive model. And the company has made a series of changes to the car in China, improving its navigation system and offering customers more plug options.
Tesla has prized its outsider status in the auto industry, and has used moves like shunning dealers and direct to customers as proof it will shatter convention. But Karl Brauer, an analyst with Kelley Blue Book, said Mr. Musk's decision to disclose delivery numbers within three days after a quarter ends brings it closer to other car makers.
"We have decided to take this approach because inaccurate sources of information are sometimes used by others to project the number of vehicle deliveries," Tesla said Friday. "This is only one measure of our financial performance and should not be relied on as an indicator of our quarterly financial result."
Tesla shares closed on Thursday up 1.8% at $191. Its $24 billion in market capitalization compares with GM's $58.8 billion in stock-market value, and Ford Motor Co.'s $63.4 billion.
U.S. stock markets were closed for Good Friday.
Credit: By John D. Stoll and Mike Ramsey
Subject: Automobile industry; Vehicles; Net losses; Automobile sales
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Apr 4, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1669539816
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1669539816?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11- 22
Database: The Wall Street Journal
My Tesla Doesn't Have a Range Issue; It takes 20 minutes, at no cost, to top off my car's battery at a Tesla Superstation.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Apr 2015: n/a.
ProQuest document link
Abstract:
Regarding Holman Jenkins's "Tesla: Just Another Car Company " (Business World, March 25): I have driven a Tesla for the last 15 months, 18,100 miles.
Full text: Regarding Holman Jenkins's "Tesla: Just Another Car Company " (Business World, March 25): I have driven a Tesla for the last 15 months, 18,100 miles. It has cost me $216 in electricity to fuel this spectacular car. It takes 20 minutes, at no cost, to top off at a Tesla Superstation, and Elon Musk is blanketing the country with them. Every vehicle is always cutting edge, as the company updates the feature via software companies continually.
I agree that the $7,500 tax-credit gift from President Obama is ridiculous; this car doesn't need it. Eliminate it and Tesla won't miss a beat. However, all of the other far inferior vehicles to which it applies will. I also agree that the Tesla isn't nearly as green as the fanbois claim. But that is not the point. The car is simply spectacular to drive. Once you drive one, all gas-powered cars are cumbersome clunkers by comparison.
As spectacular as it is, the stock is overvalued. The company will never earn a return on its investment until it hits the market with that promised $35,000 Camry killer and sells vehicles in volume. The Tesla is currently an extraordinary vehicle, but at its price point it is only a niche vehicle that cannot sell in volume.
Stephen R.S. Martin
Cave Creek, Ariz.
Subject: Automobile industry
People: Musk, Elon Obama, Barack
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Apr 5, 2015
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1669752002
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1669752002?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
My Tesla Doesn't Have a Range Issue
Author: Anonymous
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 Apr 2015: A.14.
ProQuest document link
Abstract:
Regarding Holman Jenkins's "Tesla: Just Another Car Company" (Business World, March 25): I have driven a Tesla for the last 15 months, 18,100 miles.
Full text: Regarding Holman Jenkins's "Tesla: Just Another Car Company" (Business World, March 25): I have driven a Tesla for the last 15 months, 18,100 miles. It has cost me $216 in electricity to fuel this spectacular car. It takes 20 minutes, at no cost, to top off at a Tesla Superstation, and Elon Musk is blanketing the country with them. Every vehicle is always cutting edge, as the company updates the feature via software companies continually.
I agree that the $7,500 tax-credit gift from President Obama is ridiculous; this car doesn't need it. Eliminate it and Tesla won't miss a beat. However, all of the other far inferior vehicles to which it applies will. I also agree that the Tesla isn't nearly as green as the fanbois claim. But that is not the point. The car is simply spectacular to drive. Once you drive one, all gas-powered cars are cumbersome clunkers by comparison.
As spectacular as it is, the stock is overvalued. The company will never earn a return on its investment until it hits the market with that promised $35,000 Camry killer and sells vehicles in volume. The Tesla is currently an extraordinary vehicle, but at its price point it is only a niche vehicle that cannot sell in volume.
Stephen R.S. Martin
Cave Creek, Ariz.
Subject: Automobile industry
People: Musk, Elon Obama, Barack
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.14
Publication year: 2015
Publication date: Apr 6, 2015
Section: Letters to the Editor
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1669782686
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1669782686?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla's Speed Isn't the Whole Story; Tesla's surprising delivery figures should be taken with a grain of salt
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Apr 2015: n/a.
ProQuest document link
Abstract:
For starters, as the company points out in a news release , it is difficult to assess the quarter's results without more information on margins, product mix and currency movements.
Full text: Tesla Motorsdelivered more cars than expected in the first quarter . Investors shouldn't be so quick to simply raise their expectations.
Tesla announced Friday that it delivered more than 10,000 vehicles in the first quarter, up 55% year over year and higher than the guidance it gave in February. The stock had jumped more than 7% by midday Monday.
Growth is good news, but just one piece of the puzzle. For starters, as the company points out in a news release , it is difficult to assess the quarter's results without more information on margins, product mix and currency movements. This won't be available until quarterly results are announced next month. Analysts expect Tesla to report $943 million in automotive revenue, which would be up 52% from a year before but down slightly from the fourth quarter.
Tesla's chief executive, Elon Musk, has forecast 55,000 deliveries this year, so the next three quarters will have to see a significant improvement to meet this target. The coming launch of the new Model X SUV might help, but rollouts of previous models have been slow. For example, Tesla began delivering its Model S sedan in June of 2012 but had delivered only 2,650 cars by the end of that year.
Meanwhile, there is a troubling expansion in inventory. Automotive revenue increased last year by about 60%, to $3.2 billion, but total inventory nearly tripled to $953.7 million. More concerning, the percentage of inventory labeled "finished goods" doubled to 42% over the period. This suggests demand might be softer than anticipated. In its annual filing, Tesla blamed the inventory buildup, in part, on cars whose delivery slipped from the fourth quarter to the current year, and it has acknowledged that it overestimated customer demand in China.
There are concerns beyond the immediate delivery targets. Mr. Musk has forecast 500,000 deliveries by 2020 as well as Tesla finally turning a profit under generally accepted accounting principles. Realizing such ambitions will cost money. Tesla projects capital expenditure of $1.5 billion this year. It started 2015 with just $1.9 billion in cash on its balance sheet . Analysts expect a free cash outflow of another $761 million this year.
So Tesla will likely need to tap the capital markets to finance its operating needs. Given the buoyant state of the bond market and a high stock price, this doesn't present an immediate worry. For the same reasons, though, investors supplying that capital should be looking for more convincing signs of operational success at the company.
Charley Grant
Subject: Investments; Capital expenditures; Inventory
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Apr 6, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1669908157
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1669908157?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla's High Speed Isn't the Whole Story
Author: Grant, Charley
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 Apr 2015: C.8.
ProQuest document link
Abstract:
Given the buoyant state of the bond market and a high stock price, this isn't an immediate worry.
Full text: [Financial Analysis and Commentary]
Tesla Motors has delivered more cars than expected. Investors shouldn't be so quick to raise their expectations.
Tesla said Friday that it delivered more than 10,000 vehicles in the first quarter, up 55%, year over year. The stock jumped 6.3% on Monday.
Yet growth is just one piece of the puzzle. As Tesla itself pointed out, it is hard to assess the quarter's results without more data on margins, product mix and currency movements. These won't be available until next month.
Tesla Chief Executive Elon Musk has forecast 55,000 deliveries this year, so the next three quarters will have to see a big improvement. The launch of the new Model X might help. But the rollout of the Model S sedan was slow: Tesla began shipping it in June 2012 but had delivered only 2,650 cars by the end of that year.
Meanwhile, there is a troubling rise in inventory. Automotive revenue increased last year by about 60%, to $3.2 billion, but inventory nearly tripled. And the share of inventory labeled "finished goods" doubled to 42% over the period. This suggests demand might be softer than expected. Tesla blames the stock buildup, in part, on cars whose delivery slipped from the fourth quarter and admits it overestimated demand in China.
Meanwhile, Mr. Musk has forecast 500,000 deliveries by 2020 as well as Tesla finally turning a profit under generally accepted accounting principles. Realizing this will cost money. Analysts expect a free cash outflow of another $761 million this year.
So Tesla will likely need to tap the capital markets. Given the buoyant state of the bond market and a high stock price, this isn't an immediate worry. For the same reasons, though, investors supplying that capital should be looking for more convincing signs of operational success.
Credit: By Charley Grant
Subject: Investments; Inventory
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 3100: Capital & debt management; 3400: Investment analysis & personal finance; 5310: Production planning & control; 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.8
Publication year: 2015
Publication date: Apr 7, 2015
column: Heard on the Street
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1670074771
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1670074771?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla to Upgrade Slower-Selling Version of Model S; New base model to get 15% more battery capability, all-wheel drive
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Apr 2015: n/a.
ProQuest document link
Abstract:
The car also comes with a suite of sensors and cameras and safety features that include forward collision braking, and with a forthcoming software update, will allow the car to drive itself on the highway.\n
Full text: Tesla Motors Inc. is upgrading the slower-selling version of its Model S electric sedan, equipping it with a more capable battery, all-wheel drive and a bigger price tag.
The move comes as the Palo Alto, Calif.-based auto maker is racing to meet a steep sales target set for 2015 and down the road. Tesla said on Friday it sold a record 10,300 cars in the first quarter , but it needs to pick up the pace and average 15,000 vehicles a quarter to hit this year's 55,000 goal.
The introduction of the new base model could give a boost to Tesla's sales ahead of the launch of the Model X sport-utility vehicle in the second half of the year.
Tesla will immediately stop selling the $71,000 Model S with a 60-kilowatt-hour battery that has served as its base model for most of the car's history. A new $75,000 version, carrying a 70-kilowatt-hour battery and capable of driving 15% further on a charge, will be sold in its place.
Global Equities Research analyst Trip Chowdhry said the move should drive more sales. He estimated that about 10% of Tesla's sales have come from the base, 60-kilowatt-hour model. He said he believes the announcement means Tesla is beginning to benefit from economies of scale on motors and batteries and can afford to make the move without hurting profit.
Mark Spiegel, a hedge-fund manager for Stanphyl Capital Partners LP who has a short-interest position on Tesla shares, said Tesla is cutting its margins in favor of driving up demand.
"This is essentially a $6,250 price cut on the S85D," Mr. Spiegel said in an email. "No company would ever put through this kind of a price cut if demand were truly not a problem."
Tesla has insisted that demand remains strong for its cars.
The upgraded version, dubbed 70D, will be sold along with 85-kilowatt-hour versions of the Model S. While Tesla doesn't break out specific numbers, the company has said the higher-end version handily outsells the departing 60-kilowatt-hour version.
This is the second time since the Model S went on sale in 2012 that Tesla has discontinued its lowest-range offering. Tesla's original 40-kilowatt-hour version had a range of around 150 miles, but the company quickly stopped selling it as it was seen as being too limited.
Tesla said the 70D is a more competent offering. Capable of 240 miles on a charge, it is equipped with all-wheel-drive, which is a coveted feature in Northeastern U.S. and in Europe.
The 70D could be an attractive alternative to the 85-kilowatt-hour version starting at $82,500 (the one not equipped with all-wheel drive). All-wheel-drive is a $5,000 option on the 85 kilowatt-hour version.
The new base model will also include the equipment needed to use the company's U.S.-wide network of "superchargers" that allow drivers to recharge for free in 30 minutes or less. Now standard equipment, that hardware used to be an option on base models.
The 70D version has a top speed of 140 miles an hour and acceleration to 60 mph in 5.2 seconds. It doesn't include the "insane" acceleration button that generates additional torque in the P85D model. Tesla also added a few new colors.
The car also comes with a suite of sensors and cameras and safety features that include forward collision braking, and with a forthcoming software update, will allow the car to drive itself on the highway.
Tesla Chief Executive Elon Musk said recently that he felt that 200 miles of electric range was the minimum required to make an electric vehicle viable, but a range of 250 miles is more ideal.
The company is planning to offer a 200-mile-range entry level car called the Model 3. It is due out in 2017. Tesla aims to sell the Model 3 for $35,000 and up. Tesla hasn't said whether it will offer longer-range versions of that car, like it does with the Model S.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Product introduction; Sales; Price cuts
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Apr 8, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1670982403
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1670982403?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Tesla's Model S Gets an Upgrade --- Electric-car maker lifts features and battery life on sedan in advance of releasing all-new vehicle
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 Apr 2015: B.3.
ProQuest document link
Abstract:
The car also comes with a suite of sensors and cameras and safety features that include forward collision braking, and with a forthcoming software update, will allow the car to drive itself on the highway.\n
Full text: Tesla Motors Inc. is upgrading the slower-selling version of its Model S electric sedan, equipping it with a more capable battery, all-wheel drive and a bigger price tag.
The move comes as the Palo Alto, Calif.-based auto maker is racing to meet a steep sales target set for 2015 and down the road. Tesla said on Friday it sold a record 10,300 cars in the first quarter, but it needs to pick up the pace and average 15,000 vehicles a quarter to hit this year's 55,000 goal.
The introduction of the new base model could give a boost to Tesla's sales ahead of the launch of the Model X sport-utility vehicle in the second half of the year.
Tesla will immediately stop selling the $71,000 Model S with a 60-kilowatt-hour battery that has served as its base model for most of the car's history. A new $75,000 version, carrying a 70-kilowatt-hour battery and capable of driving 15% further on a charge, will be sold in its place.
Global Equities Research analyst Trip Chowdhry said the move should drive more sales. He estimated that about 10% of Tesla's sales have come from the base, 60-kilowatt-hour model. He said he believes the announcement means Tesla is beginning to benefit from economies of scale on motors and batteries and can afford to make the move without hurting profit.
Mark Spiegel, a hedge-fund manager for Stanphyl Capital Partners LP who has a short-interest position on Tesla shares, said Tesla is cutting its margins in favor of driving up demand.
"This is essentially a $6,250 price cut on the S85D," Mr. Spiegel said in an email. "No company would ever put through this kind of a price cut if demand were truly not a problem."
Tesla has insisted that demand remains strong for its cars.
The upgraded version, dubbed 70D, will be sold along with 85-kilowatt-hour versions of the Model S. While Tesla doesn't break out specific numbers, the company has said the higher-end version handily outsells the departing 60-kilowatt-hour version.
This is the second time since the Model S went on sale in 2012 that Tesla has discontinued its lowest-range offering. Tesla's original 40-kilowatt-hour version had a range of around 150 miles, but the company quickly stopped selling it as it was seen as being too limited.
Tesla said the 70D is a more competent offering. Capable of 240 miles on a charge, it is equipped with all-wheel-drive, which is a coveted feature in Northeastern U.S. and in Europe.
The 70D could be an attractive alternative to the 85-kilowatt-hour version starting at $82,500 (the one not equipped with all-wheel drive). All-wheel-drive is a $5,000 option on the 85 kilowatt-hour version.
The new base model will also include the equipment needed to use the company's U.S.-wide network of "superchargers" that allow drivers to recharge for free in 30 minutes or less. Now standard equipment, that hardware used to be an option on base models.
The 70D version has a top speed of 140 miles an hour and acceleration to 60 mph in 5.2 seconds. It doesn't include the "insane" acceleration button that generates additional torque in the P85D model. Tesla also added a few new colors.
The car also comes with a suite of sensors and cameras and safety features that include forward collision braking, and with a forthcoming software update, will allow the car to drive itself on the highway.
Tesla Chief Executive Elon Musk said recently that he felt that 200 miles of electric range was the minimum required to make an electric vehicle viable, but a range of 250 miles is more ideal.
The company is planning to offer a 200-mile-range entry level car called the Model 3. It is due out in 2017. Tesla aims to sell the Model 3 for $35,000 and up. Tesla hasn't said whether it will offer longer-range versions of that car, like it does with the Model S.
Credit: By Mike Ramsey
Subject: Product introduction; Automobile sales; Price cuts; Electric vehicles; Product design
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Product name: Tesla Model S
Classification: 7500: Product planning & development; 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2015
Publication date: Apr 9, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1671161605
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1671161605?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
MANSION --- Spread Sheet: Ritzy ZIP Codes Call for Pricey Cars --- A look at the top car choices in affluent neighborhoods reveals some regional differences; a Mercedes-Tesla dividing line in California
Author: Bonislawski, Adam
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 Apr 2015: M.7.
ProQuest document link
Abstract:
According to the Strategic Vision analysis, gambling is a common hobby of the Mercedes-Benz E Class.
Full text: The rich, it turns out, aren't just "different from you and me," as F. Scott Fitzgerald wrote. They're also different from each other -- especially when it comes to cars.
Using data from credit-reporting firm Experian, Spread Sheet looked at the most popular luxury cars in some of the country's most exclusive ZIP Codes. Examining luxury-car registrations recorded between March 2014 and February 2015 reveals some distinct regional preferences.
In the ritzy 90210 ZIP Code of Beverly Hills, Calif., car buyers favor three flavors of Mercedes-Benz: the E Class, the C Class and the S Class, respectively. Base prices of the latest models range from $38,400 to $94,400 -- that's without the bells and whistles, according to cars.com. In 90210, the median home value is $4.4 million, according to Zillow.com.
Head north up the coast to the San Francisco Bay Area, and car buyers shift gears. The top car in the 94027 ZIP Code is the eco-friendly Tesla Model S, with a base price of $69,900. In the Atherton, Calif., area covered in this postal code, the median home value is $4.8 million.
Car choice correlates with hundreds of personal characteristics, including individual hobbies, political preferences, TV habits and emotional qualities, says Christopher Chaney, senior vice president of market-research firm Strategic Vision. The San Diego-based company provided Spread Sheet with an analysis of buyer personality traits linked to popular luxury models based on surveys of more than 300,000 buyers taken between September 2013 and August 2014.
According to the Strategic Vision analysis, gambling is a common hobby of the Mercedes-Benz E Class. Bridge and poker are popular pursuits among Mercedes-Benz S Class buyers.
One of New York's most affluent ZIP Codes has a split personality. In the 10013 ZIP Code -- covering Tribeca and Soho -- the most popular car is the BMW X5, a turbocharged crossover advertised for its performance and handling. New York BMW X5 drivers have a predilection for bowling compared with owners of most other models, according to the survey.
The third-most popular vehicle in 10013, the Land Rover Range Rover, is linked to outdoor pursuits, such as horseback riding and skeet shooting -- activities not typically associated with the Big Apple. The Range Rover is also among the priciest of the popular luxury cars, starting at $83,500. The median home value in 10013 is also steep at $3.2 million, according to Zillow.
Other popular makes and models across the country include the Lexus RX350, which is associated with high church attendance, according to Strategic Vision. Audi Q5 owners, on the other hand, are big nightclub goers, while Acura MDX buyers tend to favor family gatherings.
Credit: By Adam Bonislawski
Subject: Postal codes; Automobile industry; Luxury automobiles; Neighborhoods
Location: California
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: M.7
Publication year: 2015
Publication date: Apr 10, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: Feature
ProQuest document ID: 1671978868
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1671978868?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-25
Database: The Wall Street Journal
How Factory Workers Learned to Love Their Robot Colleagues; Tesla names its robots after superheroes, but Nissan prefers anime characters. Godzilla is a favorite everywhere.
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Apr 2015: n/a.
ProQuest document link
Abstract:
The factory, once co-owned by Toyota Motor Corp. and General Motors Co., now displays an "Evolution of Man" mural showing apes morphing into men and men morphing into Iron Man. Workers at Ford Motor Co., Honda Motor Co., General Motors, Nissan Motor Co. and Toyota all have pet names for the most revered robots in the plants.
Full text: Workers at a Navistar truck plant in Ohio weren't eager to make friends when a new colleague showed up on the factory floor nearly 40 years ago.
It was a welding robot, and people manning the production line thought of it as an intruder representing a wave of automation jeopardizing their jobs. They nicknamed it "Scabby."
Today, the brick-walled truck plant is closed, and the hostility toward machines is thawing.
Giant bots capable of doing the work of several people have earned respect after decades of coexistence and, in the process, are getting new, more admiring nicknames.
The trend is best seen at a plant in Fremont, Calif., operated by Tesla Motors Inc., a company founded by the huge comic book fan Elon Musk. The biggest robots are named after Marvel superheroes.
They are surrounded by Plexiglas, and they have nametags that include Wolverine, Professor X, Iceman and Beast. The labels fit the plant's Mojo. The factory, once co-owned by Toyota Motor Corp. and General Motors Co., now displays an "Evolution of Man" mural showing apes morphing into men and men morphing into Iron Man.
More than a dozen of Tesla's robots have names.
"They are superheroes--they do superhuman things," said Nick Tabak, who along with fellow engineers named the robots. "We named them after X-Men and that made them a little bit less intimidating and more part of the team."
At the Fremont plant, the huge robots lift the aluminum bodies of the Model S and transfer them over to a new line. Keeping with the theme, the company had a designer create a comic-book style diagram of what is happening at each station.
Tesla isn't alone and the phenomenon isn't unique to North America. Workers at Ford Motor Co., Honda Motor Co., General Motors, Nissan Motor Co. and Toyota all have pet names for the most revered robots in the plants.
At a corner in Nissan's Kyushu plant in southern Japan there are rows of yellow robots named after famous anime characters, welding and shooting out sparks as metal vehicle bodies pass through on their way to final assembly.
One is named Son Goku, another is called Vegeta. Those are characters from Japanese television's "Dragon Ball Z," an animated series that follows adventurers defending the world against evil.
Also working at Nissan are robots named Doraemon and Dorami from the show "Doraemon," a hit anime series with story lines dating back decades. One machine is tagged Luffy. He is the main character of "One Piece," a series about a young man whose body has the elastic properties of rubber.
Minsoo Kang, a University of Missouri-St. Louis humanities professor, says people are typically ambivalent about coexisting with machines, but naming robots could be a sign of kinship or comfort. "We don't name scissors, but when they start performing human-like actions, we do."
Decades ago, at the now-closed Navistar plant, employees put a putter in Scabby's claw and had it making putts during a company event that was open to families. It made the machine more approachable, and more human.
"I remember going there on family day and watching it knock putts into a hole," Jason Barlow, a third-generation Navistar International worker and a United Auto Workers official, said. "But there was a fear because people thought it was taking their jobs away."
Mr. Kang, the author of "Sublime Dreams of Living Machines," says the naming of these beasts may be indicative of respect, but the act is also tinged with fear. "Deep down inside, these workers are frightened. If the machines aren't controlled, they could be extremely dangerous."
Ford is launching a new, lighter F-150 pickup with an aluminum body that represents a quantum leap for an industry that has long relied on steel. The job can't get done without "Baby Zilla" a transfer line robot, moving the completed body of the truck out of the body shop and onto assembly lines in Dearborn, Mich., and in Kansas City, Mo.
Baby Zilla, however, works in the shadow of Godzilla, a giant M-2000 Fanuc robot working in Ford plants that build bodies in steel. Capable of lifting nearly 3,000 pounds, it grabs a vehicle and moves it from one moving assembly platform to the next.
As the bot works, opening and closing its jaws, one can easily see the resemblance to the fire-breathing 100-foot monster that wreaks havoc on Tokyo. Toyota, GM and Honda all have given the name Godzilla to robots in their plants.
"It's so large that it does the work that traditionally we've had several robots do," Ron Ketelhut, a plant engineer working at Ford, said. "It's the biggest robot in the industry."
Honda's Godzilla works in tandem with another M-2000 dubbed "T-Rex" at the East Liberty, Ohio, factory where the C-RV sport utility is made.
"This is one of my favorite things to watch in the plant," said Tom Litavish, engineering coordinator at the Honda plant, about 50 minutes from Columbus. One robot installs the engine. The other puts on the rear suspension.
Car factories often welcome visitors from parts suppliers, local government or media outlets, and T-Rex always gets attention. "It's a big stop for people to watch when they are walking through," Mr. Litavish said.
During a recent family day (much like the one held at Navistar many years ago), workers outfitted the pair of giant Honda robots so they could entertain the crowd.
One robot was holding a small object designed to look like a "UFO" being suspended by its massive jaws. It was programmed to move the object around like a flying saucer.
The other had a 6-foot-tall alien mannequin attached to its arm and the machine moved it up and down as strobe lights flashed.
Honda's Ohio plant also employs large welding robots named Big Mac and Whopper. "We name them, I think, because we are so proud of them," Mr. Litavish said.
Yoko Kubota in Tokyo contributed to this article.
Write to Mike Ramsey at michael.ramsey@wsj.com
Corrections & Amplifications
The name of the city of Fremont, Calif., was misspelled in one instance in an earlier version of this article. (April 16, 2015)
Credit: By Mike Ramsey
Subject: Automobile industry; Robots; Books; Workers
Location: Ohio
People: Musk, Elon
Company / organization: Name: Honda Motor Co Ltd; NAICS: 336111, 336991, 336390; Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Apr 15, 2015
Section: Page One
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1673167695
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1673167695?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Factory Workers Warm Up To Their Mechanical Colleagues --- Tesla names robots after superheroes, but Nissan prefers anime; Godzilla is a favorite
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]16 Apr 2015: A.1.
ProQuest document link
Abstract:
The factory, once co-owned by Toyota Motor Corp. and General Motors Co., now displays an "Evolution of Man" mural showing apes morphing into men and men morphing into Iron Man. Workers at Ford Motor Co., Honda Motor Co., General Motors, Nissan Motor Co. and Toyota all have pet names for the most revered robots in the plants.
Full text: Corrections & Amplifications
The name of the city of Fremont, Calif., was misspelled as Freemont in one instance in a Page One article Thursday about nicknames given to factory robots.
(WSJ April 17, 2015)
Workers at a Navistar truck plant in Ohio weren't eager to make friends when a new colleague showed up on the factory floor nearly 40 years ago.
It was a welding robot, and people manning the production line thought of it as an intruder representing a wave of automation jeopardizing their jobs. They nicknamed it "Scabby."
Today, the brick-walled truck plant is closed, and the hostility toward machines is thawing.
Giant bots capable of doing the work of several people have earned respect after decades of coexistence and, in the process, are getting new, more admiring nicknames.
The trend is best seen at a plant in Freemont, Calif., operated by Tesla Motors Inc., a company founded by the huge comic book fan Elon Musk. The biggest robots are named after Marvel superheroes.
They are surrounded by Plexiglas, and they have nametags that include Wolverine, Professor X, Iceman and Beast. The labels fit the plant's Mojo. The factory, once co-owned by Toyota Motor Corp. and General Motors Co., now displays an "Evolution of Man" mural showing apes morphing into men and men morphing into Iron Man.
More than a dozen of Tesla's robots have names.
"They are superheroes -- they do superhuman things," said Nick Tabak, who along with fellow engineers named the robots. "We named them after X-Men and that made them a little bit less intimidating and more part of the team."
At the Fremont plant, the huge robots lift the aluminum bodies of the Model S and transfer them over to a new line. Keeping with the theme, the company had a designer create a comic-book style diagram of what is happening at each station.
Tesla isn't alone and the phenomenon isn't unique to North America. Workers at Ford Motor Co., Honda Motor Co., General Motors, Nissan Motor Co. and Toyota all have pet names for the most revered robots in the plants.
At a corner in Nissan's Kyushu plant in southern Japan there are rows of yellow robots named after famous anime characters, welding and shooting out sparks as metal vehicle bodies pass through on their way to final assembly.
One is named Son Goku, another is called Vegeta. Those are characters from Japanese television's "Dragon Ball Z," an animated series that follows adventurers defending the world against evil.
Also working at Nissan are robots named Doraemon and Dorami from the show "Doraemon," a hit anime series with story lines dating back decades.
Minsoo Kang, a University of Missouri-St. Louis humanities professor, says people are typically ambivalent about coexisting with machines, but naming robots could be a sign of kinship or comfort. "We don't name scissors, but when they start performing human-like actions, we do."
Decades ago, at the now-closed Navistar plant, employees put a putter in Scabby's claw and had it making putts during a company event that was open to families. It made the machine more approachable, and more human.
"I remember going there on family day and watching it knock putts into a hole," Jason Barlow, a third-generation Navistar International worker and a United Auto Workers official, said. "But there was a fear because people thought it was taking their jobs away."
Ford is launching a new, lighter F-150 pickup with an aluminum body that represents a quantum leap for an industry that has long relied on steel. The job can't get done without "Baby Zilla" a transfer line robot, moving the completed body of the truck out of the body shop and onto assembly lines in Dearborn, Mich., and in Kansas City, Mo.
Baby Zilla, however, works in the shadow of Godzilla, a giant M-2000 Fanuc robot working in Ford plants that build bodies in steel. Capable of lifting nearly 3,000 pounds, it grabs a vehicle and moves it from one moving assembly platform to the next.
As the bot works, opening and closing its jaws, one can easily see the resemblance to the fire-breathing 100-foot monster that wreaks havoc on Tokyo. Toyota, GM and Honda all have given the name Godzilla to robots in their plants.
Honda's Godzilla works in tandem with another M-2000 dubbed "T-Rex" at the East Liberty, Ohio, factory where the C-RV sport utility is made.
"This is one of my favorite things to watch in the plant," said Tom Litavish, engineering coordinator at the Honda plant, about 50 minutes from Columbus. One robot installs the engine. The other puts on the rear suspension.
Car factories often welcome visitors from parts suppliers, local government or media outlets, and T-Rex always gets attention. "It's a big stop for people to watch when they are walking through," Mr. Litavish said.
During a recent family day (much like the one held at Navistar many years ago), workers outfitted the pair of giant Honda robots so they could entertain the crowd.
One robot was holding a small object designed to look like a "UFO" being suspended by its massive jaws. It was programmed to move the object around like a flying saucer.
The other had a 6-foot-tall alien mannequin attached to its arm and the machine moved it up and down as strobe lights flashed.
Honda's Ohio plant also employs large welding robots named Big Mac and Whopper. "We name them, I think, because we are so proud of them," Mr. Litavish said.
---
Yoko Kubota in Tokyo contributed to this article.
Credit: By Mike Ramsey
Subject: Automobile production; Robots; Factories
Location: United States--US
Company / organization: Name: Honda Motor Co Ltd; NAICS: 336111, 336991, 336390; Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2015
Publication date: Apr 16, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1673303769
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1673303769?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla to Announce Grid-Scale Battery Pack, Home Battery April 30; CEO Elon Musk has said Tesla could produce the batteries at its Nevada 'gigafactory,' which is under construction
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Apr 2015: n/a.
ProQuest document link
Abstract:
Unlike residential customers, commercial entities are often charged a rate based on their peak usage, so limiting a spike in electricity could save companies money.
Full text: Tesla Motors Inc. told investors and analysts in a note Tuesday it would announce a grid-scale battery pack as well as a home battery in its announcement scheduled for April 30.
Tesla's Chief Executive Officer Elon Musk had previously announced through Twitter the company would announce a new product line--not a vehicle--on April 30. There is an event planned at Tesla's Hawthorne, Calif.-based design studio to unveil the product. Mr. Musk had previously said the company was working on a stationary battery storage product. In addition, Mr. Musk has said the company could produce batteries at its so-called gigafactory, which is under construction in Nevada, for this same market.
The market today for home and commercial battery systems is small and primarily limited to states or cities that have high electricity costs. The systems can be used to provide electricity to commercial businesses during peak electricity-use periods. Unlike residential customers, commercial entities are often charged a rate based on their peak usage, so limiting a spike in electricity could save companies money.
A home battery system would likely be paired with a solar panel array as a means to lower to electricity use from the grid to nominal levels. A grid system could be used by utilities to provide electricity during peak demand periods.
Bloomberg reported the note to investors and analysts earlier.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Electric utilities
Location: Nevada
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Apr 21, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1674536538
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1674536538?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla CEO Elon Musk Gets Small Bump in Pay; Billionaire founder's 2015 base salary set at $37,440, equal to minimum-wage requirements in California
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Apr 2015: n/a.
ProQuest document link
Abstract:
The company said its founder will work for an annual base salary of $37,440 in 2015, equivalent to the minimum wage requirements in California.
Full text: Tesla Motors Inc. said Wednesday billionaire Chief Executive Elon Musk is getting a modest bump in his paycheck.
The company said its founder will work for an annual base salary of $37,440 in 2015, equivalent to the minimum wage requirements in California. That is up slightly from the $35,360 he earned in 2014.
The company said Mr. Musk, Tesla's biggest stockholder by far, doesn't accept the salary. The disclosure was made in the company's annual proxy filing with the Securities and Exchange Commission.
Mr. Musk's total reported compensation in 2014 was $35,360, or about half of the $69,989 in 2013. In 2012, he was awarded $78 million in stock options. Owning 26.7% of Tesla's stock, Mr. Musk's stake is valued at $7.8 billion.
Tesla also outlined compensation for certain executives, including Tech Chief JB Straubel, who earned $17.1 million in total pay in 2014.
Write to John D. Stoll at john.stoll@wsj.com
Credit: By John D. Stoll
Subject: Wages & salaries; Minimum wage
Location: California
Company / organization: Name: Securities & Exchange Commission; NAICS: 926150; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Apr 22, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1674833479
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1674833479?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Offers Slight Glimpse Into Model 3's Status; Auto maker hasn't completed an alpha engineering prototype of its less expensive Model 3 electric car
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Apr 2015: n/a.
ProQuest document link
Abstract:
Tesla has said the vehicle will achieve 200 miles on a charge and cost $35,000, about half of what a base Model S costs; it will launch at about the time General Motors Co. and other bigger rivals plan to introduce electric vehicles with similar range and with similar price tags.
Full text: Tesla Motors Inc. on Wednesday indicated the company has yet to complete a so-called "alpha" engineering prototype of its forthcoming Model 3 electric car, which is due in 2017.
The disclosure, coming in its annual proxy filing with the Securities and Exchange Commissions, offers a rare glimpse into the status of one of the company's most anticipated projects. The Silicon Valley electric car maker's past disclosures indicate there is still plenty of time to complete the prototype and still launch on target.
Tesla Motors still has more than 30 months to launch the car in order to meet its target for launching the Model 3--designed to be a far cheaper offering than the Model S sedan it currently sells and Model X SUV slated for launch in the second half of this year.
The Model 3 is expected to make the Tesla portfolio more accessible. Tesla has said the vehicle will achieve 200 miles on a charge and cost $35,000, about half of what a base Model S costs; it will launch at about the time General Motors Co. and other bigger rivals plan to introduce electric vehicles with similar range and with similar price tags.
In its filing, Tesla noted Chief Executive Elon Musk now holds 26.7% of Tesla's stock, and the stake is valued at about $7.8 billion at the current share price. Mr. Musk founded the company in 2004 and remains the company's chief vehicle architect.
The company next week will announce a grid-scale battery pack as well as a home battery, representing a new frontier for the company's product ambitions. Mr. Musk had previously said the company was working on a stationary battery storage product. In addition, he has said the company could produce batteries at its so-called gigafactory, which is under construction in Nevada, for this same market.
Among Mr. Musk's target milestones for certain equity grants is a commitment to developing alpha and beta prototypes of the Model 3, as well as completion of production of the vehicle. Tesla has already completed both prototypes for the Model X SUV, leaving only the official production of the vehicle on the CEO's to-do list.
Tesla's past disclosures help shed light on the company's timeline for completing prototypes.
In its proxy statement filed in 2012, Tesla said it completed the so-called alpha prototype of the Model S sedan in December 2010, or less than 20 months before the first delivery of the car in June of 2012. The alpha model was described as an "engineering prototype" and it was approved by the board one month after it was completed.
The company then finished its "beta" prototype--described as a validation prototype--in October 2011, about nine months before the sales launch. Tesla has delivered 57,000 vehicles world-wide, and aims to sell 55,000 in 2015.
While the company has yet to report a profit and faces considerable hurdles, Mr. Musk, 43 years old, has built Tesla into a force in the global auto industry. Its market capitalization of $27.6 billion is bigger than Fiat Chrysler Automobiles' valuation, but less half of General Motors Co. or Ford Motor Co. Tesla, however, pulls in a fraction of the revenue and has a tiny footprint compared with its Detroit rivals.
The company said its founder will work for an annual base salary of $37,440 in 2015, equivalent to the minimum wage requirements in California. That is up slightly from the $35,360 he earned in 2014.
The company said Mr. Musk, Tesla's biggest stockholder by far, doesn't accept the salary.
In 2012, Mr. Musk was awarded $78 million in stock options.
Tesla also outlined compensation for certain executives, including Tech Chief JB Straubel, who earned $17.1 million in total pay in 2014.
Write to John D. Stoll at john.stoll@wsj.com
Credit: By John D. Stoll
Subject: Automobile industry; Vehicles; Wages & salaries; Product development; Proxy statements
Location: California
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Apr 23, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1674846865
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1674846865?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Targets Pull Away From Profits; Analysts trim forecasts but they're still keen on the stock
Author: Lahart, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Apr 2015: n/a.
ProQuest document link
Abstract:
[...]much of that slight decline has been driven by more pessimistic analysts with the optimists making only slight revisions, if any, to price targets. Besides sheer conviction, that disconnect between revisions to earnings forecasts and targets reflects time horizons.
Full text: Analysts have radically cut their forecasts for how much Tesla Motors will earn this year. But so great is their faith in the company's far-off future, their views on what it is worth have hardly wavered.
As 2015 dawned, the outlook was rosy. Analysts were forecasting Tesla would earn $2.78 a share this year, according to FactSet, and had an average target price of about $269--$48 higher than where the stock traded at the time.
Then cracks began to appear in the story.
At the Detroit auto show in January, Tesla Chief Executive Elon Musk told The Wall Street Journal that sales in China had fallen, mostly as a result of consumer "misperceptions" about vehicles' charging requirements. At a later gathering of industry executives, he said Tesla likely wouldn't reach profitability under generally accepted accounting principles, or GAAP, until 2020. Analysts' estimates exclude certain items, and so don't adhere to these.
When Tesla reported fourth-quarter results the following month, they fell short of expectations, not just because of weak China sales but also shipping and production delays. Tesla also said capital spending would swell to $1.5 billion this year.
Analysts cut their estimates sharply. They now expect Tesla to earn just 53 cents a share this year--less than a fifth of what was expected just three months ago. They also cut estimates for other profit measures, such as earnings before interest, taxes, depreciation and amortization, as well as for revenue. Forecasts for beyond 2015 have also fallen.
But price targets? Not so much.
On average, analysts now say Tesla's stock is worth $251--just $19, or 7%, less than early January's valuation and still about $32 above the current price. And much of that slight decline has been driven by more pessimistic analysts with the optimists making only slight revisions, if any, to price targets.
Besides sheer conviction, that disconnect between revisions to earnings forecasts and targets reflects time horizons. Much of the value in analysts' bullish price targets for Tesla rests on their expectations that the company will be selling upward of a half million cars annually in 10 years' time. Such hopes could be buoyed further by the company's planned announcement next week of a new product line of battery systems for buildings.
Even so, the drop in near-term estimates has been significant enough that analysts might have had to cut their price targets further if not for other changes made to their models.
Since the start of the year, for example, Morgan Stanley's Adam Jonas has reduced his Ebitda estimate for Tesla through 2022 by about $3.3 billion in aggregate. But his estimate for the seven years starting 2023 has increased by $4.6 billion, partly on the back of higher expected revenue. He has trimmed his price target to $280 from $290.
Meanwhile, Stifel analyst James Albertine has lowered his estimate for Tesla's Ebitda over the next six years by about $2.4 billion. But his target price has stayed at $400. This was partly because when Tesla reported fourth-quarter results it reduced its diluted share count, primarily because a drop in its stock price affected assumptions about how many of its employee options would vest. This in turn reduced the share count, so even though the overall valuation came down with the Ebitda estimate, the target price didn't.
The promise of cash tomorrow is why investors invest. But when tomorrow is this far off, risks rise sharply. In Morgan Stanley's central model, for example, four-fifths of Tesla's net present value derives from cash flows projected beyond 2025, making it very sensitive to shifts in expectations around sales, margins and discount rates.
Ultimately, what matters isn't what sort of price targets have been put on Tesla, but whether it can grow to the size implied by a stock that now trades at more than 400 times this year's expected non-GAAP earnings. Whatever the odds of that were at the beginning of 2015, before estimates started falling, they are longer now.
Write to Justin Lahart at justin.lahart@wsj.com
Credit: By Justin Lahart
Subject: Corporate profits; Earnings; Estimates; Financial performance
Location: China Detroit Michigan
People: Musk, Elon
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Apr 24, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1675217180
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1675217180?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Motors' Twitter Account Was Hacked; Tesla's official Twitter account was hacked for about 10 minutes on Saturday around 4:50 p.m. New York time
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Apr 2015: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Motors Inc.'s official Twitter account was hacked on Saturday around 4:50 p.m. New York time by a person or people who identified themselves as the #ripprgang.
Over about a 10-minute period, the hacker sent out 11 tweets, mostly tagging other people and advertising a "free Tesla" if people called a number that routes to a computer repair shop in Oswego, Ill.
Tesla locked down the account quickly. The account stopped sending out tweets at around 5 p.m.
It is not uncommon for Twitter accounts to be hacked. Twitter's own chief financial officer, along with Burger King and even U.S. military accounts have briefly been taken over by pranksters.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Apr 25, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1675656045
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1675656045?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla's Next Big Idea: Storing Power; Giant factory in Nevada would use excess capacity to make industrial batteries to hold electricity
Author: Ramsey, Mike; Sweet, Cassandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Apr 2015: n/a.
ProQuest document link
Abstract:
Tesla's "gigafactory," under construction outside Reno, Nev., is mainly designed to produce lithium-ion batteries for Tesla automobiles, but as much as 25% of the plant's capacity could be allocated to battery packs, or "stationary power," according to company projections.
Full text: Tesla Motors Inc. has long faced questions about whether a company can make money selling electric cars. On Thursday, it will introduce an even wilder notion: vastly expanding the market for stationary batteries.
The Silicon Valley company is expected to unveil plans that foresee it dominating the small market for battery packs for homes, businesses and utilities. Such batteries can store electricity in a building, at a wind farm or next to power lines.
Tesla's "gigafactory," under construction outside Reno, Nev., is mainly designed to produce lithium-ion batteries for Tesla automobiles, but as much as 25% of the plant's capacity could be allocated to battery packs, or "stationary power," according to company projections.
Chief Executive Elon Musk will have to explain how Tesla's bet on stationary batteries is good for the bottom line. Just 3% of the batteries that Tesla's Nevada factory is expected to produce would supply the entire current global market for stationary storage battery packs this year, according to analysts at Lux Research.
"It's a little bit of a technology looking for a market," said Cosmin Laslau, a battery analyst with Lux Research.
"We see the market growing very quickly," said Mateo Jaramillo, the leader of the stationary-storage project for Tesla, in a podcast with GreenTech Media in January.
The goal adds another audacious milestone for a company known for making bullish predictions. Tesla plans to sell 500,000 vehicles by 2020 (representing a 1,300% increase from 2014), which is the first year it projects profitability.
The battery packs, which can range in size from a small refrigerator for a home, to several large shipping containers for a wind farm, store electricity when power is abundant, such as when the wind is blowing, and save it for later use.
Tesla already has a customer in SolarCity Corp.--a solar-panel company where Mr. Musk is the chairman. Tesla has built a few more than 300 home-based battery packs for people with solar panels to try to limit their use of grid electricity.
Tesla said it would show why its new battery pack is a better solution than current market offerings. The promise of the gigafactory, set to open in 2016, is to lower battery costs by 30%, but the market is small and dispersed.
Tesla's $5 billion battery factory will have a capacity to make 35 gigawatt hours of batteries and 50 gigawatt hours of battery packs a year. Most of the plant is meant to supply batteries to its electric cars, but if sales don't grow as fast as anticipated, supplying battery packs to homes and businesses could help ensure that 10-million-square-foot behemoth plant is working at capacity.
California and some other states are experimenting with batteries and other devices to store electricity generated by solar panels, wind farms, or from the grid, and spit the power back out when extra electricity is needed, or when prices are high. The Golden State is requiring its big utilities to install enough batteries or other equipment so that they can store 1,325 megawatts of electricity by 2024.
Electric grid operators in Texas and in some eastern states also are using energy storage, powered by batteries, to provide quick spurts of power to smooth the flow of electricity on transmission lines.
LG Chem and Samsung SDI are already supplying lithium-ion batteries to energy-storage projects in California and other states. AES Corp., Advanced Microgrid Solutions, and Stem, have built several energy storage projects and signed contracts to build more, buying batteries from outside suppliers.
New entrants have been joining the small U.S. energy-storage market in hopes that demand will grow as battery prices fall. Among them is Cygnus Energy Storage, a Colorado-based startup that aims to supply utilities with batteries that hang from utility poles.
The world's battery suppliers are waiting to see what type of storage product Tesla unveils, how much it will charge, and whether it has customers lined up, said Sam Jaffe, CEO of Cygnus. Venture capital investors won't consider funding any similar companies "until we see what Tesla is doing," he added.
It is unclear how much the Tesla batteries would cost. SolarCity told California regulators last year that the retail price to install an average home battery of 5 kilowatts in size was $23,429. State battery subsidies in California can cut the price by 40% or more, while federal tax credits for some projects could reduce the price further.
Write to Mike Ramsey at michael.ramsey@wsj.com and Cassandra Sweet at cassandra.sweet@wsj.com
Credit: By Mike Ramsey and Cassandra Sweet
Subject: Product introduction; Electric vehicles; Wind farms; Batteries
Location: California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Apr 28, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1676155426
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1676155426?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News -- Tesla's Next Big Idea: Electricity Storage
Author: Ramsey, Mike; Sweet, Cassandra
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Apr 2015: B.8.
ProQuest document link
Abstract:
Tesla's "gigafactory," under construction outside Reno, Nev., is mainly designed to produce lithium-ion batteries for Tesla automobiles, but as much as 25% of the plant's capacity could be allocated to battery packs, or "stationary power," according to company projections.
Full text: Tesla Motors Inc. has long faced questions about whether a company can make money selling electric cars. On Thursday, it will introduce an even wilder notion: vastly expanding the market for stationary batteries.
The Silicon Valley company is expected to unveil plans that foresee it dominating the small market for battery packs for homes, businesses and utilities. Such batteries can store electricity in a building, at a wind farm or next to power lines.
Tesla's "gigafactory," under construction outside Reno, Nev., is mainly designed to produce lithium-ion batteries for Tesla automobiles, but as much as 25% of the plant's capacity could be allocated to battery packs, or "stationary power," according to company projections.
Chief Executive Elon Musk will have to explain how Tesla's bet on stationary batteries is good for the bottom line. Just 3% of the batteries that Tesla's Nevada factory is expected to produce would supply the entire current global market for stationary storage battery packs this year, according to analysts at Lux Research.
"It's a little bit of a technology looking for a market," said Cosmin Laslau, a battery analyst with Lux Research.
"We see the market growing very quickly," said Mateo Jaramillo, the leader of the stationary-storage project for Tesla, in a podcast with GreenTech Media in January.
The goal adds another audacious milestone for a company known for making bullish predictions. Tesla plans to sell 500,000 vehicles by 2020 (representing a 1,300% increase from 2014), which is the first year it projects profitability.
The battery packs, which can range in size from a small refrigerator for a home, to several large shipping containers for a wind farm, store electricity when power is abundant, such as when the wind is blowing, and save it for later use.
Tesla already has a customer in SolarCity Corp. -- a solar-panel company where Mr. Musk is the chairman. Tesla has built a few more than 300 home-based battery packs for people with solar panels to try to limit their use of grid electricity.
Tesla said it would show why its new battery pack is a better solution than current market offerings. The promise of the gigafactory, set to open in 2016, is to lower battery costs by 30%, but the market is small and dispersed.
Tesla's $5 billion battery factory will have a capacity to make 35 gigawatt hours of batteries and 50 gigawatt hours of battery packs a year. Most of the plant is meant to supply batteries to its electric cars, but if sales don't grow as fast as anticipated, supplying battery packs to homes and businesses could help ensure that 10-million-square-foot behemoth plant is working at capacity.
California and some other states are experimenting with batteries and other devices to store electricity generated by solar panels, wind farms, or from the grid, and spit the power back out when extra electricity is needed, or when prices are high. The Golden State is requiring its big utilities to install enough batteries or other equipment so that they can store 1,325 megawatts of electricity by 2024.
Electric grid operators in Texas and in some eastern states also are using energy storage, powered by batteries, to provide quick spurts of power to smooth the flow of electricity on transmission lines.
LG Chem and Samsung SDI are already supplying lithium-ion batteries to energy-storage projects in California and other states. AES Corp., Advanced Microgrid Solutions, and Stem, have built several energy storage projects and signed contracts to build more, buying batteries from outside suppliers.
It is unclear how much the Tesla batteries would cost. SolarCity told California regulators last year that the retail price to install an average home battery of 5 kilowatts in size was $23,429. State battery subsidies in California can cut the price by 40% or more, while federal tax credits for some projects could reduce the price further.
Credit: By Mike Ramsey and Cassandra Sweet
Subject: Product introduction; Wind farms; Electric vehicles; Batteries
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.8
Publication year: 2015
Publication date: Apr 29, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1676291337
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1676291337?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla CEO Elon Musk Unveils Line of Home and Industrial Battery Packs; 'We're talking about trying to change the fundamental energy infrastructure of the world,' Musk says
Author: Berzon, Alexandra; Sweet, Cassandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 May 2015: n/a.
ProQuest document link
Abstract:
HAWTHORNE, Calif.--Tesla Motors Inc. Chief Executive Elon Musk unveiled a line of home and industrial battery packs late Thursday, representing a strategic shift as his money-losing electric car company tries to break into a crowded energy storage market. Tesla said its home products can be configured as a backup device, or to buy power at night when prices are cheap and discharge it during the day, or store power collected from solar panels for later use.
Full text: HAWTHORNE, Calif.--Tesla Motors Inc. Chief Executive Elon Musk unveiled a line of home and industrial battery packs late Thursday, representing a strategic shift as his money-losing electric car company tries to break into a crowded energy storage market.
More than just a splashy evening party in a hangar at Tesla's Southern California design studios, the event was the 43-year-old billionaire's attempt to bring attention to an alternative business unit that has long been under development.
Mr. Musk says "power wall" batteries--ranging from a $3,000 7 kilowatt-hour wall-mounted unit to a $3,500 10 kwh unit--cost far less than the going rate for large-scale batteries and can be easier to install. Palo Alto, Calif.-based Tesla aims to begin delivering units by the summer from its California car factory, and later shift production to a $5 billion battery plant under construction near Reno, Nev.
Tesla also will sell massive battery blocks for industrial users and open-source the patents for the entire range, much like the company does with electric-car technology. Mr. Musk portrayed the effort as a breakthrough toward transforming energy use in favor of renewable resources.
"We're talking about trying to change the fundamental energy infrastructure of the world," he said during a public unveiling. "This is actually within the power of humanity to do. It is not impossible."
Mr. Musk sees the potential for the battery business to match or surpass Tesla's car business in terms of the potential for energy generation. He expects demand to range from countries where solar is popular, such as Germany, to developing economies that don't have existing power lines.
Eventually, he expects Tesla will need to build more factories modeled after its Nevada factory.
Tesla's first battery customers include Green Mountain Power Corp., Vermont's largest utility. It plans to buy Tesla packs and sell them to customers that already have solar power.
Green Mountain Power Chief Executive Mary Powell said she thinks the rapid spread of solar power, combined with lower battery costs, will lead a revolution in power distribution.
Another customer is TreeHouse Inc., an Austin-based home improvement store concentrating on ecologically friendly goods. The store will sell the battery packs along with its own solar installation options.
A new market is growing for robust batteries. Initially developed for electric cars, they are now being installed at buildings, wind farms and other places that can store electricity for later use. Tesla said its home products can be configured as a backup device, or to buy power at night when prices are cheap and discharge it during the day, or store power collected from solar panels for later use.
About 62 megawatts of batteries and other energy-storage devices were installed in 2014 at 180 properties, at a value of about $128 million, up 40% from the previous year, according to energy research firm GTM Research. Battery installations this year are likely to more than triple, to 220 megawatts, the firm predicts.
Utilities such as Duke Energy Corp. and Edison International have installed large battery systems next to wind farms. The batteries store electricity that the wind turbines generate at night and release the power to the grid in the late afternoon and early evening when electricity demand spikes.
Other companies, such as Stem Inc. and Green Charge Networks are installing batteries for large retailers and hotels, to help the companies limit their power usage and cut their utility bills.
Government subsidies can reduce the cost of installing the batteries. In California, state rebates cover up to 60% of the price of the battery. Nationwide, batteries that are connected to solar panels are eligible for federal tax credits equal to 30% of the price of the battery.
California's subsidies and a mandate requiring utilities to use batteries or other devices to store power have put that state at the center of the stationary energy-storage market. Hawaii, Texas and some eastern states also are using batteries to store electricity from solar panels and wind farms, and to keep the flow of electricity on transmission lines moving smoothly.
Tesla batteries initially will use cells made by Panasonic Corp., the supplier of batteries in its Model S electric sedan. When production shifts to Reno, costs will drop by 30%, it estimates.
The new battery models include large, standing industrial-level batteries intended for use by utilities sold in units of 100 kilowatt-hours, which cost $250 per kilowatt-hour. The company already has a customer with plans to install 250 megawatt-hours-worth of such batteries, Mr. Musk said.
Its home model, called "power wall," comes in sleek black and white models and will be aimed at people who want to more efficiently use power from solar panels or go entirely off the electrical grid, Mr. Musk said. The larger home model can store enough electricity to power a home for 10 hours, Tesla said.
The Power Wall batteries will be installed through certified third parties, including SolarCity Corp., where Mr. Musk is chairman.
Mike Ramsey contributed to this article.
Write to Alexandra Berzon at alexandra.berzon@wsj.com and Cassandra Sweet at cassandra.sweet@wsj.com
Credit: By Alexandra Berzon And Cassandra Sweet
Subject: Factories; Subsidies; Product introduction; Electric utilities; Wind farms; Solar energy
Location: California Southern California
Company / organization: Name: Green Mountain Power Corp; NAICS: 221122; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: May 1, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1677304204
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1677304204?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Launches Used Car Sales Via Web; Luxury electric auto maker gears up for rash of Model S cars coming off lease this summer
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 May 2015: n/a.
ProQuest document link
Abstract:
Electric-car maker Tesla Motors Inc. has begun selling used versions of its Model S electric cars on its website, an important step for the luxury car maker as its business matures.
Full text: Electric-car maker Tesla Motors Inc. has begun selling used versions of its Model S electric cars on its website, an important step for the luxury car maker as its business matures.
Its certified vehicle program, which Tesla launched without fanfare late last month, allows buyers to obtain Tesla's cars at a lower price than its new vehicles, and comes with the manufacturer's maintenance and reliability checks. Like other luxury car makers, Tesla offers a 4-year or 50,000-mile limited warranty on its used cars.
The first batch of vehicles available for sale on the site are mostly cars whose owners swapped them for the all-wheel-drive Model S that went on sale late last year, a company spokeswoman said. Leased vehicles will begin to return to Tesla next year as the very first cars were sold in the middle of 2012 and leases began in early 2013 and generally were written for three years.
Used sales are important to Tesla to gain new customers, ensure residual values are stable and as a source of revenue.
Tesla doesn't use independent dealers, so it keeps the revenue from the sales of its used vehicles. Typically, used vehicles produce higher profit margins than new car sales at traditional new-car dealerships.
In Tesla's case, it is unclear how much profit the sales will generate. Offerings on its website last week generally were less costly than those advertised through AutoTrader.com by private sellers or used car dealers. With a limited supply of these vehicles nationally, Tesla's site recently had offerings in 11 U.S. metropolitan areas.
"There are a whole new set of buyers potentially exposed to the brand now," said Alec Gutierrez, an analyst with automotive researcher Kelley Blue Book.
Other car makers, particularly luxury brands such as BMW and Mercedes-Benz, have been successful with certified preowned vehicle sales. They give consumers comfort in buying used cars because of the manufacturers' guarantees. In turn, the demand for the used vehicles helps push residual values higher and that lowers the lease price for new cars.
One quirk, however, of Tesla's new system is how the company handles its used car inventory. Today, Tesla has very few new cars sitting in showrooms and those that are there are mostly demonstration models. With the used car program, it will be getting hundreds or thousands of cars returned from leases annually, and will have to store the vehicles until they are sold.
A Tesla spokeswoman said the cars will be kept in groups around the country, not necessarily at a retail store, but at a Tesla location. If a customer orders a used car, they can either go to the regional storage spots to retrieve it, or have it delivered to their home by Tesla.
Write to Mike Ramsey at michael.ramsey@wsj.com
Corrections & Amplifications
Tesla began leasing its vehicles in early 2013. An earlier version of this article incorrectly said it began offering leases in 2012.
Credit: By Mike Ramsey
Subject: Automobile dealers; Automobile sales; Used automobiles; Vehicles; Profits
People: Musk, Elon
Company / organization: Name: AutoTrader.com; NAICS: 511140; Name: Daimler AG; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: May 1, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1677410132
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1677410132?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla's Battery Could Power Utilities; Elon Musk's new battery packs are a threat to utilities, but they also represent an opportunity to maintain relevance
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 May 2015: n/a.
ProQuest document link
Abstract:
Batteries, by storing surplus solar power, also address any lingering perceptions about distributed generation destabilizing the grid.
Full text: Elon Musk had to resist the urge to strike a Dr. Evil pose Thursday night as he talked about "billions" of batteries like Tesla Motors' new Powerpack effectively ending the energy business as we know it.
But depending on how the heads of traditional power suppliers respond, they could be the ones who end up laughing "MWAH HA HA."
Tesla Energy , the new battery arm of the electric-vehicle maker that Mr. Musk heads, represents a moment for the distributed-energy industry, albeit not a breakthrough. Its lithium-ion technology is the same well-established one inside Tesla's Model S car and just one of several competing chemistries.
But Tesla may be taking a page from Apple's book. Decades ago, Apple took a technically difficult tool used mainly by die-hards, the personal computer, and popularized it. In the same way, Tesla's sleekly packaged take on distributed power is "talking to the 99% of people who think it can't be done and making something people think can be done," says Rob Day, partner at Black Coral Capital, a clean technology venture-capital fund.
Like its cars, though, Tesla's battery is too expensive right now for mass adoption. The bigger near-term opportunity will be businesses that often pay punitive utility fees when demand is high. A battery could help offset that. The proposition becomes even more enticing when coupled with software that helps companies better manage their energy usage. This means they could use a smaller, cheaper battery.
For utilities, though, batteries represent an existential threat over the long term. Right now, the grid and power stations are the battery, providing power on demand. When that demand shifts to a customer-controlled battery, the utility sells less electricity.
Alternatively, utilities could get on board. While their instinct is often to slow the adoption of distributed energy--for example, in the form of special charges for solar-panel owners--this is politically difficult. And, over time, it actually encourages grid defection.
Instead, utilities could join with Tesla, or its many competitors, to install batteries at a large scale in their service areas. They could be compensated through the existing model of spreading the cost across customers' bills, while meeting renewable-power obligations. Batteries, by storing surplus solar power, also address any lingering perceptions about distributed generation destabilizing the grid.
For Tesla, selling in bulk to utilities would be a faster route to boosting demand for batteries. From that, it would reap economies of scale. Such a future is probably not what many of Tesla's true believers had in mind as they cheered on Thursday night: Distributed energy is supposed to be about individual empowerment.
But don't be surprised if some utilities embrace batteries. They could prove a means to effectively maintain control of what distributed energy threatens to take away from them: the customer.
Write to Liam Denning at liam.denning@wsj.com
Credit: By Liam Denning
Subject: Electric utilities; Power; Energy industry
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: May 1, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1677415954
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1677415954?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Will Tesla's Newest Battery Pan Out? Rivals abound but key challenge will be driving down price of home battery packs
Author: Smith, Rebecca; Sweet, Cassandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 May 2015: n/a.
ProQuest document link
Abstract:
Tesla announced Thursday that it is repackaging the lithium ion batteries it now uses in its electric cars to sell them as electricity-storage devices for homes, businesses and utilities. For consumers, Tesla is offering a 7 kilowatt-hour system for $3,000 and a 10 kilowatt-hour battery pack for $3,500. Since the average house creates an electrical load of 2 to 5 kilowatts, the packs could power an entire house for a couple of hours.
Full text: The brand name won't be enough.
As Tesla Motors Inc. makes a bid to dominate the budding market for electricity storage, it faces lots of competitors and rival technologies, energy experts say. And plenty of challenges--including driving down the price of its "power walls" to a level that will prompt price-sensitive consumers to spring for them.
Tesla announced Thursday that it is repackaging the lithium ion batteries it now uses in its electric cars to sell them as electricity-storage devices for homes, businesses and utilities. The battery packs are meant to absorb electricity when it is cheap and plentiful--during a sunny afternoon for a house with rooftop solar panels, for example--and release the power when electricity is expensive or scarce.
So far the market for electricity storage remains small, though growing quickly; last year about $128 million worth of such batteries were installed around the country, mostly at utilities, according to GTM Research, which tracks the renewable energy industry. Just 1% of the capacity was installed at homes.
Tesla plans to change all that. At an event to formally announce the battery products, Elon Musk, the company's chief executive, said it is "trying to change the fundamental energy infrastructure of the world." The company's shares, which had risen by about 6% in the days before the party, ended Friday almost unchanged at $225.96, down nine cents.
A few companies, including Sungevity and Sunrun Inc., are starting to offer battery systems for consumers who have solar panels, at prices that are similar to Tesla's. For bigger users, companies including Sunverge Energy Inc., Stem Inc. and Greencharge Networks offer lithium-ion batteries made by companies like LG Chem and Samsung, with various financing options. Another group of companies sells what are known as flow batteries, which are more common for very large users like utilities.
"So many companies are fighting over a market that's practically nonexistent right now," said Haresh Kamath, energy storage expert at the Electric Power Research Center in Palo Alto, Calif. "Tesla is betting they can produce a charismatic product that consumers will want to buy--like what Apple did with the iPhone."
Tesla will have to sell eight home battery systems to equal the size of each battery pack going into one of its luxury cars, he said.
Environmentally conscious consumers--think: Nissan Leaf drivers--are likely to opt for these types of home batteries, said Venkat Srinivasan, head of the battery program at Lawrence Berkeley National Lab. But battery prices need to drop by about 75% before they go mainstream, he said. "The big catch will be decreasing the costs."
Tesla says it has an answer for that, too: the giant battery factory it is building in Reno, Nev., with Panasonic Corp., which makes the batteries it uses in its cars. Tesla says the new plant can cut 30% off the cost of producing batteries.
For consumers, Tesla is offering a 7 kilowatt-hour system for $3,000 and a 10 kilowatt-hour battery pack for $3,500. Since the average house creates an electrical load of 2 to 5 kilowatts, the packs could power an entire house for a couple of hours. Or they could run essential household circuits--a refrigerator, microwave, lights and fans--throughout the evening when solar panels don't produce, provided there was enough sun during the day to charge up the batteries.
The devices, which feature a 10-year warranty, would be bolted to a wall near an electrical panel. Special controllers would toggle between batteries and solar panels, deciding when to put power on the grid or pump it into batteries. These same smart controls would also decide when to release power from the batteries.
Batteries are only a small piece of the total cost of a solar/storage system. An integrated system includes solar panels, batteries and inverter, smart controls, building permits, labor and other costs that can add up to $20,000 or more.
Tesla's prices for installing batteries and other equipment are on the low end of the energy storage market's current range of $800 to $2,000 a kilowatt-hour, said GTM Research analyst Ravi Manghani. Those installation prices need to drop by half or more, to less than $500 a kilowatt-hour to attract a lot of demand, he predicted.
But there are other, less cost-conscious customers for energy storage. Businesses, which pay extra charges based on their peak demand for power, are already starting to use the equipment to cut their energy use and utility bills.
Utilities themselves are also interested in bigger battery systems to help them even out the fluctuating flows of electricity from solar farms or wind turbines, keeping the grid stable or eliminating the need for expensive grid upgrades.
Utilities think energy storage will become an essential part of the electric system in coming years because so much renewable energy is being added to the grid, said Mark Rawson, head of technology for the Sacramento Municipal Utility District in California.
Lithium ion technology, which Tesla uses, looks good today because it can absorb and release electricity relatively quickly and can go through many charge and discharge cycles without failing, he said. "But I wouldn't say it's a silver bullet. There's still lots of innovation happening."
Write to Rebecca Smith at rebecca.smith@wsj.com and Cassandra Sweet at cassandra.sweet@wsj.com
Credit: By Rebecca Smith And Cassandra Sweet
Subject: Prices; Houses; Electricity distribution; Energy industry; Lithium
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: May 1, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1677568131
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1677568131?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Jou rnal
Will Tesla's Newest Battery Pan Out?
Author: Smith, Rebecca; Sweet, Cassandra
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 May 2015: B.1.
ProQuest document link
Abstract:
Tesla announced Thursday that it is repackaging the lithium ion batteries it now uses in its electric cars to sell them as electricity-storage devices for homes, businesses and utilities. For consumers, Tesla is offering a 7 kilowatt-hour system for $3,000 and a 10 kilowatt-hour battery pack for $3,500. Since the average house creates an electrical load of 2 to 5 kilowatts, the packs could power an entire house for a couple of hours.
Full text: Corrections & Amplifications
Green Charge Networks was incorrectly called Greencharge Networks in a Business & Finance article Saturday about new electric-storage products offered by Tesla Motors Inc.
(WSJ May 5, 2015)
The brand name won't be enough.
As Tesla Motors Inc. makes a bid to dominate the budding market for electricity storage, it faces lots of competitors and rival technologies, energy experts say. And plenty of challenges -- including driving down the price of its "power walls" to a level that will prompt price-sensitive consumers to spring for them.
Tesla announced Thursday that it is repackaging the lithium ion batteries it now uses in its electric cars to sell them as electricity-storage devices for homes, businesses and utilities. The battery packs are meant to absorb electricity when it is cheap and plentiful -- during a sunny afternoon for a house with rooftop solar panels, for example -- and release the power when electricity is expensive or scarce.
So far the market for electricity storage remains small, though growing quickly; last year about $128 million worth of such batteries were installed around the country, mostly at utilities, according to GTM Research, which tracks the industry. Just 1% of the capacity was installed at homes.
Tesla plans to change all that. At an event to formally announce the battery products, Elon Musk, the company's chief executive, said it is "trying to change the fundamental energy infrastructure of the world." The company's shares, which had risen by about 6% in the days before the party, ended Friday almost unchanged at $225.96.
A few companies, including Sungevity and Sunrun Inc., plan to offer battery systems for consumers who have solar panels, at prices they say will be competitive with Tesla's. For bigger users, companies including Sunverge Energy Inc., Stem Inc. and Greencharge Networks offer lithium-ion batteries made by companies like LG Chem and Samsung, with various financing options. Another group of companies sells what are known as flow batteries, which are more common for users like utilities.
"So many companies are fighting over a market that's practically nonexistent right now," said Haresh Kamath, energy storage expert at the Electric Power Research Center in Palo Alto, Calif. "Tesla is betting they can produce a charismatic product that consumers will want to buy -- like what Apple did with the iPhone."
Tesla will have to sell eight home battery systems to equal the size of each battery pack going into one of its cars, he said.
Environmentally conscious consumers -- think: Nissan Leaf drivers -- are likely to opt for these types of home batteries, said Venkat Srinivasan, head of the battery program at Lawrence Berkeley National Lab. But battery prices need to drop by about 75% before they go mainstream, he said. "The big catch will be decreasing the costs."
Tesla says it has an answer for that, too: the giant battery factory it is building in Reno, Nev., with Panasonic Corp., which makes the batteries it uses in its cars. Tesla says the new plant can cut 30% off the cost of producing batteries.
For consumers, Tesla is offering a 7 kilowatt-hour system for $3,000 and a 10 kilowatt-hour battery pack for $3,500. Since the average house creates an electrical load of 2 to 5 kilowatts, the packs could power an entire house for a couple of hours. Or they could run essential household circuits -- a refrigerator, microwave, lights and fans -- throughout the night, provided there was enough sun during the day to charge up the batteries.
The devices, which feature a 10-year warranty, would be bolted to a wall near an electrical panel. Special controllers would toggle between batteries and solar panels, deciding when to put power on the grid or pump it into batteries. These same smart controls would also decide when to release power from the batteries.
Batteries are only a small piece of the total cost of a solar/storage system. An integrated system includes solar panels, batteries and inverter, smart controls, building permits, labor and other costs that can add up to $20,000 or more.
Tesla's prices for installing batteries and other equipment are on the low end of the energy storage market's current range of $800 to $2,000 a kilowatt-hour, said GTM Research analyst Ravi Manghani. Those installation prices need to drop by half or more, to less than $500 a kilowatt-hour to attract a lot of demand, he predicted.
But there are other, less cost-conscious customers for energy storage. Businesses, which pay extra charges based on their peak demand for power, are already starting to use the equipment to cut their energy use and utility bills.
Utilities themselves are also interested in bigger battery systems to help them even out the fluctuating flows of electricity from solar farms or wind turbines, keeping the grid stable or eliminating the need for expensive grid upgrades.
Utilities think energy storage will become an essential part of the electric system in coming years because so much renewable energy is being added to the grid, said Mark Rawson, head of technology for the Sacramento Municipal Utility District in California.
Lithium ion technology, which Tesla uses, looks good today because it can absorb and release electricity relatively quickly and can go through many charge and discharge cycles without failing, he said. "But I wouldn't say it's a silver bullet. There's still lots of innovation happening."
Credit: By Rebecca Smith and Cassandra Sweet
Subject: Electricity distribution; Lithium; Batteries
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8650: Electrical & electronics industries; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: May 2, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1677610166
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1677610166?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Will Tesla's Newest Battery Pan Out? Rivals abound but key challenge will be driving down price of home battery packs
Author: Smith, Rebecca; Sweet, Cassandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 May 2015: n/a.
ProQuest document link
Abstract:
Tesla announced Thursday that it is repackaging the lithium ion batteries it now uses in its electric cars to sell them as electricity-storage devices for homes, businesses and utilities. For consumers, Tesla is offering a 7 kilowatt-hour system for $3,000 and a 10 kilowatt-hour battery pack for $3,500. Since the average house creates an electrical load of 2 to 5 kilowatts, the packs could power an entire house for a couple of hours.
Full text: The brand name won't be enough.
As Tesla Motors Inc. makes a bid to dominate the budding market for electricity storage, it faces lots of competitors and rival technologies, energy experts say. And plenty of challenges--including driving down the price of its "power walls" to a level that will prompt price-sensitive consumers to spring for them.
Tesla announced Thursday that it is repackaging the lithium ion batteries it now uses in its electric cars to sell them as electricity-storage devices for homes, businesses and utilities. The battery packs are meant to absorb electricity when it is cheap and plentiful--during a sunny afternoon for a house with rooftop solar panels, for example--and release the power when electricity is expensive or scarce.
So far the market for electricity storage remains small, though growing quickly; last year about $128 million worth of such batteries were installed around the country, mostly at utilities, according to GTM Research, which tracks the renewable energy industry. Just 1% of the capacity was installed at homes.
Tesla plans to change all that. At an event to formally announce the battery products, Elon Musk, the company's chief executive, said it is "trying to change the fundamental energy infrastructure of the world." The company's shares, which had risen by about 6% in the days before the party, ended Friday almost unchanged at $225.96, down nine cents.
A few companies, including Sungevity and Sunrun Inc., plan to offer battery systems for consumers who have solar panels, at prices they say will be competitive with Tesla's. For bigger users, companies including Sunverge Energy Inc., Stem Inc. and Green Charge Networks offer lithium-ion batteries made by companies like LG Chem and Samsung, with various financing options. Another group of companies sells what are known as flow batteries, which are more common for very large users like utilities.
"So many companies are fighting over a market that's practically nonexistent right now," said Haresh Kamath, energy storage expert at the Electric Power Research Center in Palo Alto, Calif. "Tesla is betting they can produce a charismatic product that consumers will want to buy--like what Apple did with the iPhone."
Tesla will have to sell eight home battery systems to equal the size of each battery pack going into one of its luxury cars, he said.
Environmentally conscious consumers--think: Nissan Leaf drivers--are likely to opt for these types of home batteries, said Venkat Srinivasan, head of the battery program at Lawrence Berkeley National Lab. But battery prices need to drop by about 75% before they go mainstream, he said. "The big catch will be decreasing the costs."
Tesla says it has an answer for that, too: the giant battery factory it is building in Reno, Nev., with Panasonic Corp., which makes the batteries it uses in its cars. Tesla says the new plant can cut 30% off the cost of producing batteries.
For consumers, Tesla is offering a 7 kilowatt-hour system for $3,000 and a 10 kilowatt-hour battery pack for $3,500. Since the average house creates an electrical load of 2 to 5 kilowatts, the packs could power an entire house for a couple of hours. Or they could run essential household circuits--a refrigerator, microwave, lights and fans--throughout the evening when solar panels don't produce, provided there was enough sun during the day to charge up the batteries.
The devices, which feature a 10-year warranty, would be bolted to a wall near an electrical panel. Special controllers would toggle between batteries and solar panels, deciding when to put power on the grid or pump it into batteries. These same smart controls would also decide when to release power from the batteries.
Batteries are only a small piece of the total cost of a solar/storage system. An integrated system includes solar panels, batteries and inverter, smart controls, building permits, labor and other costs that can add up to $20,000 or more.
Tesla's prices for installing batteries and other equipment are on the low end of the energy storage market's current range of $800 to $2,000 a kilowatt-hour, said GTM Research analyst Ravi Manghani. Those installation prices need to drop by half or more, to less than $500 a kilowatt-hour to attract a lot of demand, he predicted.
But there are other, less cost-conscious customers for energy storage. Businesses, which pay extra charges based on their peak demand for power, are already starting to use the equipment to cut their energy use and utility bills.
Utilities themselves are also interested in bigger battery systems to help them even out the fluctuating flows of electricity from solar farms or wind turbines, keeping the grid stable or eliminating the need for expensive grid upgrades.
Utilities think energy storage will become an essential part of the electric system in coming years because so much renewable energy is being added to the grid, said Mark Rawson, head of technology for the Sacramento Municipal Utility District in California.
Lithium ion technology, which Tesla uses, looks good today because it can absorb and release electricity relatively quickly and can go through many charge and discharge cycles without failing, he said. "But I wouldn't say it's a silver bullet. There's still lots of innovation happening."
Write to Rebecca Smith at rebecca.smith@wsj.com and Cassandra Sweet at cassandra.sweet@wsj.com
Corrections & Amplifications: Green Charge Networks was misspelled as Greencharge Networks in an earlier version of this article. May 4, 2015
Credit: By Rebecca Smith and Cassandra Sweet
Subject: Prices; Houses; Electricity distribution; Energy industry; Lithium
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: May 2, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1678084785
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1678084785?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Tesla CEO Musk Is Now a Used-Car Salesman
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 May 2015: B.3.
ProQuest document link
Abstract:
Electric-car maker Tesla Motors Inc. has begun selling used versions of its Model S electric cars on its website, an important step for the luxury car maker as its business matures.
Full text: Electric-car maker Tesla Motors Inc. has begun selling used versions of its Model S electric cars on its website, an important step for the luxury car maker as its business matures.
Its certified vehicle program, which Tesla launched without fanfare late last month, allows buyers to obtain Tesla's cars at a lower price than its new vehicles, and comes with the manufacturer's maintenance and reliability checks. Like other luxury car makers, Tesla offers a four-year or 50,000-mile limited warranty on its used cars.
The first batch of vehicles available for sale on the site are mostly cars whose owners swapped them for the all-wheel-drive Model S that went on sale late last year, a company spokeswoman said. Leased vehicles will begin to return to Tesla next year as the very first cars were sold in the middle of 2012 and leases began in early 2013 and generally were written for three years.
Used sales are important to Tesla to gain new customers, ensure residual values are stable and as a source of revenue.
Tesla doesn't use independent dealers, so it keeps the revenue from the sales of its used vehicles. Typically, used vehicles produce higher profit margins than new car sales at traditional new-car dealerships.
In Tesla's case, it is unclear how much profit the sales will generate. Offerings on its website last week generally were less costly than those advertised through AutoTrader.com by private sellers or used car dealers. With a limited supply of these vehicles nationally, Tesla's site recently had offerings in 11 U.S. metropolitan areas.
"There are a whole new set of buyers potentially exposed to the brand now," said Alec Gutierrez, an analyst with automotive researcher Kelley Blue Book.
Other car makers, particularly luxury brands such as BMW and Mercedes-Benz, have been successful with certified preowned vehicle sales. They give consumers comfort in buying used cars because of the manufacturers' guarantees. In turn, the demand for the used vehicles helps push residual values higher and that lowers the lease price for new cars.
One quirk, however, of Tesla's new system is how the company handles its used car inventory. Today, Tesla has very few new cars sitting in showrooms and those that are there are mostly demonstration models. With the used-car program, it will be getting hundreds or thousands of cars returned from leases annually, and will have to store the vehicles until they are sold.
A Tesla spokeswoman said the cars will be kept in groups around the country, not necessarily at a retail store, but at a Tesla location. If a customer orders a used car, they can either go to the regional storage spots to retrieve it, or have it delivered to their home by Tesla.
Credit: By Mike Ramsey
Subject: Automobile dealers; Automobile sales; Electric vehicles; Warranties; Used automobiles
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2015
Publication date: May 5, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1678448250
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1678448250?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Loss Widens as Spending Jumps; Luxury electric-car maker posts $154 million loss even as quarterly shipments top 10,000 cars
Author: Ramsey, Mike; Steele, Anne
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 May 2015: n/a.
ProQuest document link
Abstract:
Tesla is posting record volume and says it is on track to deliver 55,000 vehicles this year, but investments in its network of fast-charging stations, and the development of its forthcoming Model X sport-utility vehicle and other future products widened losses and reduced its liquidity.
Full text: Tesla Motors Inc. was stung by rising costs in its first quarter, reporting a wider net loss compared with a year ago even as the sale of regulatory credits and Model S sedans increased sharply.
The Palo Alto, Calif., luxury electric car maker said on Wednesday its loss widened to $154 million, compared with $49.8 million in the same period a year ago. Revenue climbed 51% over a year earlier to $939 million in part as deliveries of its $75,000-and-up Model S rose 55% to a record 10,045 vehicles.
Its adjusted operating loss of 36 cents a share was better than analyst forecasts of 50-cents a share operating loss. The company said it met its automotive gross operating margin target despite currency exchange challenges and greater research, development, operations and capital expenditures.
Its shares rose 2.3% in after-hours trading on Wednesday to $235.75. It released first quarter results after the 4 p.m. halt of regular trading.
The results underscore the challenge facing one of the auto industry's most scrutinized companies. Tesla is posting record volume and says it is on track to deliver 55,000 vehicles this year, but investments in its network of fast-charging stations, and the development of its forthcoming Model X sport-utility vehicle and other future products widened losses and reduced its liquidity.
Its cash and equivalents fell to $1.5 billion on March 31, from $1.9 billion three months earlier and $2.4 billion a year ago. Chief Executive Officer Elon Musk has said the company can fund its growth plan without share sales or convertible bond offerings.
The company said it remains on track to start delivering its vital Model X late in the third quarter and that it expects to begin making battery cells and full battery packs at a new Nevada factory in late 2016--earlier than previously forecast.
The company's battery-making plans have been in focus following Mr. Musk's April 30 launch of a new stationary-storage business. The investment in battery-making capabilities is one of the company's large capital expense items.
Mr. Musk said on Wednesday that the response to its storage products has been "crazy, off the hook" and production of the home power storage gear is sold out through the middle of 2016.
Tesla has been lifting its results by selling regulatory credits. It sold $66 million such credits in the first quarter, up sharply compared with the same period a year ago; it said it expects to sell $15 million more in the current quarter.
The auto maker, like others selling zero-emission cars, has regulatory credits that can be transferred to rivals needing to improve their emissions scores. Excluding those credits, the company said the gross margin on its Model S sedan was on plan at 26% of revenue on an adjusted basis and 25% on a Generally Accepted Accounting Principles basis. Analysts closely watch gross margin because it shows the company's efficiency as it reaches higher levels of production and scale.
Tesla said it expects to produce 12,500 vehicles in the current quarter, and deliver between 10,000 and 11,000 vehicles. Tesla also said it would raise the price on Model S vehicles by an average of 5% in European markets because of the strengthening U.S. dollar against the euro.
The company said it closed on a $100 million line of credit related to its leasing business in the quarter and plans to close on additional financing in the coming months.
Tesla's share price plummeted to below $190 earlier this year after fourth-quarter volumes missed expectations in China. Its shares have since risen 22.3% since the end of the first quarter in part to the announcement of the new stationary power storage business.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey and Anne Steele
Subject: Net losses; Financial performance; Automobile industry; Vehicles; Capital expenditures
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: May 6, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1678907791
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1678907791?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla's Musk Says Model X Won't Hit Market Until Late Third Quarter; Electric vehicle maker chief says heavily anticipated SUV still in process of validating
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 May 2015: n/a.
ProQuest document link
Abstract:
In its first-quarter earnings report, the Silicon Valley electric vehicle maker said the vehicle will hit the market in "late Q3."
Full text: The group of buyers expecting to get their hands on Tesla Motors Inc.'s next product--the Model X--need to cool their jets a little bit longer. The SUV appears to be hitting another delay, but the CEO says it is for good reason.
During a call with investors, Tesla Chief Executive Elon Musk said Tesla is still in the process of validating the Model X, which follows the Model S sedan, which launched in 2012. To get the Model X on the way, "millions of miles of travel testing" needs to be completed.
The Model X is heavily anticipated, but has been subject to a couple of setbacks . In its first-quarter earnings report, the Silicon Valley electric vehicle maker said the vehicle will hit the market in "late Q3." In February, the company indicated the Model X would be on sale by mid-July.
Mr. Musk said it isn't worth splitting hairs over. "The thing that really matters is not when do the first deliveries of the Model X occur," but investors should pay attention to when significant volume is ramped up.
"It would be easy for us to kind of do some initial deliveries in August, that would be pretty easy," he said. "We want to iron everything out, make sure everything is good."
Mr. Musk said Tesla will first build a "captive fleet" of Model X SUVs before it actually releases them for sale. This is a process similar to the batch-and-release tradition employed by more established auto makers when they launch a new vehicle.
Tesla's CEO also shed more light on the company's Model 3 car, a cheaper model aimed at a broader audience. He said Tesla plans to unveil a prototype of the car next March, and put the vehicle on sale late in 2017.
Write to John D. Stoll at john.stoll@wsj.com
Credit: By John D. Stoll
Subject: Automobile industry; Financial performance; Research & development--R & D
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: May 6, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1678947408
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1678947408?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Buys Michigan Auto-Parts Maker; Electric-car maker purchases Riviera Tool, a maker of stamping die systems
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 May 2015: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. has agreed to buy a Michigan auto parts maker, Riviera Tool LLC, for an undisclosed amount.
Full text: Tesla Motors Inc. has agreed to buy a Michigan auto parts maker, Riviera Tool LLC, for an undisclosed amount.
The Grand Rapids, Mich., company makes stamping die systems used to create body panels. Tesla confirmed the agreement to buy the company after a report in the Detroit Free Press. The company has about 100 workers, which Tesla intends to keep, according to the newspaper.
Tesla confirmed the purchase of the privately held company and not a formerly publicly traded company of nearly the same name. Some investors have attempted to trade the security on Thursday even though it has been inactive for several years.
News of the acquisition came hours after the company reported a $154 million loss in the first quarter because of heavy spending related to expanding the company and launching its Model X sport-utility vehicle.
The acquisition is a sign of Tesla's growing scale and ambition. Tesla makes its Model S and forthcoming Model X out of aluminum, which is difficult to stamp and requires special expertise. Tesla brings expertise and the ability to make its own dies in-house with the move.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Acquisitions & mergers; Automotive parts
Location: Michigan Grand Rapids Michigan
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: May 7, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1678971166
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1678971166?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Loss Widens as Spending Ramps Up
Author: Ramsey, Mike; Steele, Anne
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 May 2015: B.1.
ProQuest document link
Abstract:
Tesla is posting record volume and says it is on track to deliver 55,000 vehicles this year, but investments in its network of fast-charging stations, and the development of its forthcoming Model X sport-utility vehicle and other future products widened losses and reduced its liquidity.
Full text: Tesla Motors Inc. was stung by rising costs in its first quarter, reporting a wider net loss compared with a year ago even as the sale of regulatory credits and Model S sedans increased sharply.
The Palo Alto, Calif., luxury electric car maker said on Wednesday its loss widened to $154 million, compared with $49.8 million in the same period a year ago. Revenue climbed 51% over a year earlier to $939 million in part as deliveries of its $75,000-and-up Model S rose 55% to a record 10,045 vehicles.
Its adjusted operating loss of 36 cents a share was better than analyst forecasts of 50-cents a share operating loss. The company said it met its automotive gross operating margin target despite currency exchange challenges and greater research, development, operations and capital expenditures.
Its shares rose 2.3% in after-hours trading on Wednesday to $235.75. It released first quarter results after the 4 p.m. halt of regular trading.
The results underscore the challenge facing one of the auto industry's most scrutinized companies. Tesla is posting record volume and says it is on track to deliver 55,000 vehicles this year, but investments in its network of fast-charging stations, and the development of its forthcoming Model X sport-utility vehicle and other future products widened losses and reduced its liquidity.
Its cash and equivalents fell to $1.5 billion on March 31, from $1.9 billion three months earlier and $2.4 billion a year ago. Chief Executive Officer Elon Musk has said the company can fund its growth plan without share sales or convertible bond offerings.
The company said it remains on track to start delivering its vital Model X late in the third quarter and that it expects to begin making battery cells and full battery packs at a new Nevada factory in late 2016 -- earlier than previously forecast.
The company's battery-making plans have been in focus following Mr. Musk's April 30 launch of a new stationary-storage business. The investment in battery-making capabilities is one of the company's large capital expense items.
Mr. Musk said on Wednesday that the response to its storage products has been "crazy, off the hook" and production of the home power storage gear is sold out through the middle of 2016.
Tesla has been lifting its results by selling regulatory credits. It sold $66 million such credits in the first quarter, up sharply compared with the same period a year ago; it said it expects to sell $15 million more in the current quarter.
The auto maker, like others selling zero-emission cars, has regulatory credits that can be transferred to rivals needing to improve their emissions scores. Excluding those credits, the company said the gross margin on its Model S sedan was on plan at 26% of revenue on an adjusted basis and 25% on a Generally Accepted Accounting Principles basis. Analysts closely watch gross margin because it shows the company's efficiency as it reaches higher levels of production and scale.
Tesla said it expects to produce 12,500 vehicles in the current quarter, and deliver between 10,000 and 11,000 vehicles. Tesla also said it would raise the price on Model S vehicles by an average of 5% in European markets because of the strengthening U.S. dollar against the euro.
The company said it closed on a $100 million line of credit related to its leasing business in the quarter and plans to close on additional financing in the coming months.
Tesla's share price plummeted to below $190 earlier this year after fourth-quarter volumes missed expectations in China. Its shares have since risen 22.3% since the end of the first quarter in part to the announcement of the new stationary power storage business.
Credit: By Mike Ramsey and Anne Steele
Subject: Net losses; Financial performance; Automobile industry; Vehicles; Capital expenditures
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: May 7, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1679026367
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1679026367?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Shares Down on Cash Supply Concern; Electric auto maker burned through $558 million in cash last quarter
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 May 2015: n/a.
ProQuest document link
Abstract:
[...]the auto maker burned through $558 million in cash, an amount called "eye watering" by Morgan Stanley analyst Adam Jonas as the company poured money into its Fremont, Calif. plant ahead of the launch of the Model X sport-utility.
Full text: Tesla Motors Inc.'s shares began dropping Thursday--even after an earnings report Wednesday after the market closed that appeared to be better than Wall Street expected--because the company's cash supply is dwindling.
Shares declined 2% to $228 near the opening on the Nasdaq Stock Market.
By most metrics, Tesla exceeded expectations . Its gross margins were on target, its revenue, up 55% from a year ago, was better than forecast and its adjusted losses were 36 cents a share, much better than the 50-cent loss forecast.
But the auto maker burned through $558 million in cash, an amount called "eye watering" by Morgan Stanley analyst Adam Jonas as the company poured money into its Fremont, Calif. plant ahead of the launch of the Model X sport-utility.
Mr. Jonas, who is a big believer in Tesla, was especially concerned because Tesla's forecast for the second and third quarters indicates the company's cash burn could be just as large, setting up a scenario where the company runs out of gross cash unless it borrows more.
"Does Tesla have nine months of gross cash left? (Second quarter) cash burn looks equally as deep or higher, leaving the company with less than $1 (billion) gross cash at midyear, just before the Model X intro," he said in a note to investors.
Tesla took out a line of credit during the quarter for $100 million, and drew down $78 million of it. The company also said it planned to close on more financing soon. Furthermore, CEO Elon Musk said the company would have strong positive free cash flow in the fourth quarter when the sport-utility was in full production.
Still, if the Model X launch isn't smooth and the company can't deliver a large number of vehicles in the fourth quarter, the cash supply could dwindle quickly, especially as spending on the company's giant battery factory in Reno, Nev., ramps up.
Most of the big spending on the $5 billion plant hasn't yet begun, according to the chief financial officer, Deepak Ahuja. The big spending in the quarter was to prepare for the Model X launch.
In February, he said the company should be able to finance its ambitious growth without significantly diluting existing shareholders. Last year, the company borrowed $2.3 billion through a convertible bond offering. That debt can be converted into new stock, which can lower the value of existing shares.
Tesla could borrow money in the form of a traditional bond, but because it isn't profitable and is burning cash, it likely would pay a high interest rate.
Mr. Musk estimated that sales in the fourth quarter would be roughly double that of the other quarters--or more than 20,000. But that came with a caveat.
"I do want to emphasize that, like sometimes people don't totally appreciate is that, there are several thousand unique parts in a car and if even one of those parts is not available for any reason, then you cannot ship, you cannot scale production," Mr. Musk said in a call with investors. "So essentially, the production ramp goes according to the unluckiest and worst performing supplier or project of Tesla."
Ryan Brinkman, the equity analyst for J.P. Morgan, called the cash burn "disquietingly large" and lowered his estimate for the company's stock to $163 from $165. UBS analyst Colin Langan cut his full-year adjusted profit forecast to $1 per share from $1.40.
Barclays analyst Brian Johnson suggested Tesla might be better off just being a battery supplier for stationary storage because of the worsening results in automotive.
"We see this result as likely to reverse the positive trajectory the shares enjoyed going into the stationary storage announcement," he said.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Stock prices; Investments; Suppliers; Financial performance
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: May 7, 2015
Section: ABC
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1679196108
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1679196108?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Pledges to Meet China Charging Standards; Luxury electric-car maker would adapt its vehicles to meet future requirements
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2015: n/a.
ProQuest document link
Abstract:
SHANGHAI--Tesla Motors Inc. said it would modify its battery-powered electric cars to meet China's charging standards to allay concerns over its technology's incompatibility in the country, where the company's sales have fallen short of its expectations.
Full text: SHANGHAI--Tesla Motors Inc. said it would modify its battery-powered electric cars to meet China's charging standards to allay concerns over its technology's incompatibility in the country, where the company's sales have fallen short of its expectations.
China is developing a national charging standard to promote the use of electric cars and reduce "range anxiety" over how far the cars can travel before running out of power. It remains unclear when the standard will be completed.
The lack of sufficient charging infrastructure and Tesla's current technology incompatibility with the Chinese government-initiated charging network are holding Chinese buyers back, analysts say. Tesla last year offered to license its technology patents, including for rapidly recharging batteries, at no cost to other car makers.
Statistics from U.S. research firm JL Warren Capital show that fewer than 2,500 Tesla cars were registered in China in the nine months from April 2014, when the company started deliveries there. Tesla Chief Executive Elon Musk told The Wall Street Journal a year ago that he would consider it a success if Tesla were to sell 5,000 vehicles or more in China in 2014.
Tesla declined to comment on the registration figures. The company cut jobs in China earlier this year after missing sales targets.
The American electric car maker has dished out millions of dollars to install so-called supercharging stations around the world to appeal to buyers worried about infrastructure. These direct-current chargers can deliver 120 kilowatts of electricity and recharge 80% of a 85 kilowatt-hour Model S battery in 30 minutes.
However, its rapid-charge technology isn't compatible with electric cars built by other manufacturers, raising concerns among Chinese consumers about the lack of access to charge Tesla cars.
In a statement posted on its website on Monday, Tesla said it would modify its cars to fit Chinese national charging standards. "We will fully cooperate with the Chinese government in drafting the national charging standards as well as building public charging infrastructure," Zhu Xiaotong, country head for Tesla in China, said in the statement.
The Chinese government has said it won't support the construction of charging stations that fail to meet the emerging Chinese standard. BMW AG last year struck a deal with the city government of Shanghai to build charging stations that can supply electricity for cars by other manufacturers.
Tesla's statement comes as China itself struggles to meet its own long-stated goal of reducing its dependency on imported oil by promoting alternative-energy vehicles. China wants half a million such vehicles on the road by the end of this year and 10 times that by the end of the decade. Last year around 50,000 cars out of the roughly 20 million passenger vehicles sold in China met that criteria.
Rose Yu
Subject: Automobile industry; Electric vehicles; Infrastructure
Location: China
People: Musk, Elon
Company / organization: Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: May 12, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1680060740
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1680060740?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Maryland Allows Direct Sales by Tesla; FTC Urges Michigan to Do So; Electric-car maker has had to battle car dealers who oppose manufacturer-owned dealerships
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2015: n/a.
ProQuest document link
Abstract:
Last week, the Federal Trade Commission's staff sent a letter to a Michigan state senator urging him to include a provision in a bill he had sponsored that would allow Tesla to operate in Michigan.
Full text: Tesla Motors Inc. is allowed to sell cars through four of its own retail stores in Maryland after Gov. Larry Hogan signed a bill making way for manufacturer-owned dealerships under limited circumstances.
This decision comes as Tesla's direct-sales model is also a topic in Michigan, which outlawed direct sales in October.
For several years, Tesla has had to battle in every state car dealers who are bent on making its manufacturer-to-consumer sales method illegal.
Maryland's law allows Tesla to operate four locations, and it is patterned after states such as Ohio, Pennsylvania, New Jersey and Georgia, which have allowed the electric-vehicle maker to sell cars out of its stores as long as there is a cap. All these laws also are narrowly focused on the type of manufacturer that is eligible, so that they mostly apply only to Tesla.
Last week, the Federal Trade Commission's staff sent a letter to a Michigan state senator urging him to include a provision in a bill he had sponsored that would allow Tesla to operate in Michigan. That bill seeks to open the door to direct sales for Elio Motors, a startup that is trying to launch a three-wheeled car that is expected to attain up to 84 miles per gallon on the highway.
At the time of the passage of the law, Gov. Rick Snyder said he hoped the legislature would address the issue again. A spokesman for the governor didn't respond Tuesday to a request for comment on the letter.
It isn't the first time the FTC has weighed in on the issue. The commission staff previously had written similar position pieces protesting efforts by some states to restrict Tesla's direct sales.
In many states, Tesla has come to an accommodation with dealers by agreeing to limit the number of stores in the state.
Maryland had only allowed "galleries," which are like showrooms for vehicles but the staff isn't allowed to sell the vehicles and can't handle any paperwork. Connecticut also has a prohibition on direct sales but its legislature is moving forward on a compromise bill to allow sales.
"I would like to think we are reaching the point of general agreement around the principles we've been espousing," said Diarmuid O'Connell, vice president of business development for Tesla.
In addition to Connecticut, Texas, Arizona, Michigan and West Virginia all have laws prohibiting direct sales by manufacturers. The Texas legislature, which meets only every two years, has a House and Senate bill that would allow up to 12 retail locations in the state. But since its February introduction, little action has occurred on the bill.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile dealers; Bills; Vehicles; Legislatures
Location: Georgia Pennsylvania Ohio Maryland Michigan New Jersey
People: Snyder, Rick
Company / organization: Name: Federal Trade Commission--FTC; NAICS: 926150; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: May 12, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1680216428
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1680216428?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Who's Responsible when a Driverless Car Crashes? Tesla's Got an Idea; Company to use turn signal as potential solution to liability issues over semiautonomous vehicle technology
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 May 2015: n/a.
ProQuest document link
Abstract:
The company has given sparse details on autopilot features that will be downloaded into the car in an over-the-air software update, but Chief Executive Elon Musk has indicated it will offer the most advanced capabilities of current vehicles on the road.
Full text: Tesla Motors Inc. is looking at the good old-fashioned turn signal as a potential solution to a liability debate associated with driverless vehicle technology.
The Palo Alto, Calif., electric-car maker soon will begin activating semiautonomous features, including the capability to pass other cars without driver intervention, in its Model S sedans. A driver can trigger the passing function by hitting the turn signal, according to people familiar with the technology. That action not only tells the car it can pass, but also means the driver has given thought to whether the maneuver is safe.
While it might seem a minor detail, having drivers activate the turn signal could help auto makers like Tesla avoid a regulatory pile up. As more driverless features are built into cars and trucks, auto regulators and the insurance industry are working to fine-tune liability rules that govern who is responsible if a car gets in an accident or hits a pedestrian.
By hitting a turn-signal stalk, a driver theoretically acknowledges road conditions are appropriate for a passing maneuver and therefore takes responsibility for the consequences.
Currently, cars with so-called driver-assistance features, such as those that keep a car within lane lines, are legal and typically require the driver to remain actively engaged in the vehicle's operation. For cars in which the driver doesn't necessarily have to be fully engaged, the rules are murkier.
"Tesla is venturing into the mushy middle of automation, where the human still performs part of the driving task, the computer performs other parts," said Bryant Walker Smith, an assistant professor of law at University of South Carolina who has carved out a specialty on autonomous vehicles.
The use of the turn signal to pass another car shows the human is staying engaged. But if the car can handle most tasks, it could be considered a class-3 autonomous vehicle, or a car that can drive itself without the driver having to exert control.
Several states, including California, Nevada, Florida and Michigan, would require the driver of a class-3 vehicle to have special registration.
Tesla is working on the autonomous car-passing feature, but it may not show up in the first software update due out this summer, said one of the people briefed on the matter. The company has given sparse details on autopilot features that will be downloaded into the car in an over-the-air software update, but Chief Executive Elon Musk has indicated it will offer the most advanced capabilities of current vehicles on the road.
"The upcoming autopilot updates will delight Model S drivers with cool features that increase both their safety and enjoyment behind the wheel," Tesla said.
Mr. Musk has described the autopilot as a system that will handle most driving duties on the highway and could even come pick you up on private property with no driver at all.
The self-driving features will be available only on Model S vehicles that were built since October with the required sensors.
Mr. Smith said Tesla will be pushing the boundary of the legal definitions. In addition, just because hands-free driving is made possible, it doesn't obviate other laws. For instance. New York requires drivers have one hand on the wheel. Many other states prohibit talking on the phone or texting while driving, even if the technology would make this activity safer.
"There is an incredible amount of trust being put in this human driver that they are paying attention, and there is a lot of evidence where that trust is unfounded," he said.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Traffic accidents & safety; Vehicles
Location: California Palo Alto California
People: Musk, Elon
Company / organization: Name: University of South Carolina; NAICS: 611310; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: May 13, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1680484679
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1680484679?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Tesla Takes a Turn at Liability Riddle --- Electric-car maker's autonomous passing would require a driver activate via turn signal
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 May 2015: B.8.
ProQuest document link
Abstract:
"Tesla is venturing into the mushy middle of automation, where the human still performs part of the driving task, the computer performs other parts," said Bryant Walker Smith, an assistant professor of law at University of South Carolina who has carved out a specialty on autonomous vehicles.
Full text: Tesla Motors Inc. is looking at the good old-fashioned turn signal as a potential solution to a liability debate associated with driverless vehicle technology.
The Palo Alto, Calif., electric-car maker soon will begin activating semiautonomous features, including the capability to pass other cars without driver intervention, in its Model S sedans. A driver can trigger the passing function by hitting the turn signal, according to people familiar with the technology. That action not only tells the car it can pass, but also means the driver has given thought to whether the maneuver is safe.
While it might seem a minor detail, having drivers activate the turn signal could help auto makers like Tesla avoid a regulatory pile up. As more driverless features are built into cars and trucks, auto regulators and the insurance industry are working to fine-tune liability rules that govern who is responsible if a car gets in an accident or hits a pedestrian.
By hitting a turn-signal stalk, a driver theoretically acknowledges road conditions are appropriate for a passing maneuver and therefore takes responsibility for the consequences.
Currently, cars with so-called driver-assistance features, such as those that keep a car within lane lines, are legal and typically require the driver to remain actively engaged in the vehicle's operation. For cars in which the driver doesn't necessarily have to be fully engaged, the rules are murkier.
"Tesla is venturing into the mushy middle of automation, where the human still performs part of the driving task, the computer performs other parts," said Bryant Walker Smith, an assistant professor of law at University of South Carolina who has carved out a specialty on autonomous vehicles.
The use of the turn signal to pass another car shows the human is staying engaged. But if the car can handle most tasks, it could be considered a class-3 autonomous vehicle, or a car that can drive itself without the driver having to exert control.
Several states, including California, Nevada, Florida and Michigan, would require the driver of a class-3 vehicle to have special registration.
Tesla is working on the autonomous car-passing feature, but it may not show up in the first software update due out this summer, said one of the people briefed on the matter. The company has given sparse details on autopilot features that will be downloaded into the car in an over-the-air software update, but Chief Executive Elon Musk has indicated it will offer the most advanced capabilities of current vehicles on the road.
"The upcoming autopilot updates will delight Model S drivers with cool features that increase both their safety and enjoyment behind the wheel," Tesla said.
Mr. Musk has described the autopilot as a system that will handle most driving duties on the highway and could even come pick you up on private property with no driver at all.
The self-driving features will be available only on Model S vehicles that were built since October with the required sensors.
Mr. Smith said Tesla will be pushing the boundary of the legal definitions. In addition, just because hands-free driving is made possible, it doesn't obviate other laws. For instance. New York requires drivers have one hand on the wheel. Many other states prohibit talking on the phone or texting while driving, even if the technology would make this activity safer.
"There is an incredible amount of trust being put in this human driver that they are paying attention, and there is a lot of evidence where that trust is unfounded," he said.
Credit: By Mike Ramsey
Subject: Traffic accidents & safety; Automobile driving; Product development; Automation; Electric vehicles
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 5240: Software & systems; 7500: Product planning & development; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.8
Publication year: 2015
Publication date: May 14, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1680654066
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/16806540 66?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Overheard: Tesla's Blurry Road Map
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 May 2015: n/a.
ProQuest document link
Abstract:
Tesla's report for the first quarter, filed this week with the Securities and Exchange Commission, didn't break out revenue by geographic region.
Full text: Those interested in monitoring Tesla Motors' sales performance may be asking: What's happened to the world?
Tesla's report for the first quarter, filed this week with the Securities and Exchange Commission, didn't break out revenue by geographic region. That is a departure from prior filings--and it matters to investors trying to assess the performance of a highly valued company. Just 46% of Tesla's $3.2 billion of revenue last year came from the U.S. Another 15% originated from China, with the remainder coming from Norway and "other" regions. Tesla reported $940 million of revenue in the first quarter of 2015.
The state of the Chinese business is of particular interest. Chief Executive Elon Musk called China sales "unexpectedly weak" in January, and predicted that the business would rebound "probably in the middle of the year."
China wasn't discussed on the most recent analyst conference call on May 7. Tesla may well be on track to returning its Chinese business to good health. But if that is the case, management should consider letting investors in on the secret.
Subject: Research & development--R & D
Location: China Norway United States--US
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: Securities & Exchange Commission; NAICS: 926150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: May 14, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1680780588
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1680780588?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Will Homeowners Shell Out Thousands for Super Batteries? Tesla Motors and others are jumping into budding business of electricity-storage batteries, but current market is very small
Author: Smith, Rebecca; Sweet, Cassandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 May 2015: n/a.
ProQuest document link
Abstract:
Ms. Haynes lives in a year-old house with solar panels and a battery system that cost her nothing--the $25,000 system designed by San Francisco company Sunverge Energy Inc. was covered by government subsidies and utility incentives , according to developer Pacific Housing Inc. that built her 34-house neighborhood in Sacramento.
Full text: Billionaire entrepreneur Elon Musk sees a future in which super batteries change the world , making solar power available at night and turning homes into tiny utilities.
Kellie Haynes, an event planner in Sacramento, Calif., is one of the few Americans who already lives in that world. She says she loves the benefits but didn't have to cover all the costs.
Whether people are willing to pay thousands of dollars apiece to join her remains one of the biggest questions hanging over Mr. Musk's Tesla Motors Inc. and other companies jumping into the budding business of electricity-storage batteries.
Ms. Haynes lives in a year-old house with solar panels and a battery system that cost her nothing--the $25,000 system designed by San Francisco company Sunverge Energy Inc. was covered by government subsidies and utility incentives , according to developer Pacific Housing Inc. that built her 34-house neighborhood in Sacramento.
So far, Ms. Haynes's highest monthly electricity bill has been $50, and at the moment her local electric utility owes her money, she says, because she puts more electricity on the grid than she takes off. Another plus is she can keep the lights on even if there is a utility blackout by tapping her 7-kilowatt battery pack, which is the size of two small school lockers.
Tesla "talked about it like it was revolutionary but we've already got it," Ms. Haynes said. "It's kind of exciting to be on the front lines."
The market for electricity storage is very small, especially among homeowners, analysts say. About 62 megawatts of storage systems were installed last year at 180 properties, with 99% of the power going to utilities, businesses or government buildings, according to GTM Research.
Most buyers tap generous state and federal subsidies aimed at cutting air pollution, because installing solar-battery combinations can cost tens of thousands of dollars for homeowners and industrial-size batteries can cost hundreds of thousands of dollars.
Fewer than a dozen states have programs that provide cash grants to help fund electricity storage, but those that do typically offer thousands in cash back, according to the trade group Energy Storage Association. For instance, California rebates up to 60% of the price of a battery system. At the federal level, homeowners who buy batteries to back-up their rooftop solar-panel arrays qualify for investment tax credits worth 30% of the project's price.
Government agencies that back the incentives say the burden to taxpayers is acceptable to encourage greater use of renewable energy. Batteries can be charged by solar and wind power, then provide electricity when the sun isn't shining and the wind isn't blowing. And batteries can do it silently and without air emissions typical of conventional diesel-fired generators.
Tesla and its sister company, SolarCity Corp.--Mr. Musk is chairman of both--have been testing batteries at about 300 houses, including one owned by Peter Rive, SolarCity's chief technology officer and a cousin of Mr. Musk.
Tesla plans to offer a 7 kilowatt-hour battery pack that can handle many charges and discharges a day. It will cost roughly $7,000 to buy and install, including special equipment needed to connect to solar panels and the grid.
Even Mr. Musk concedes the battery doesn't make much economic sense right now for individual homeowners; grid power is still cheaper than solar-battery combinations. But a trend toward sharply higher electricity prices may change that. The cost of traditional grid power is rising , while solar power costs are plunging.
Battery advocates say electricity storage options will become more attractive once consumers face time-of-use pricing. Some parts of the U.S., including much of California, are expected to roll out such programs in the coming years, charging higher rates for pulling power off the grid at peak times. For instance, running an air conditioner in the afternoon when it is hottest could soon cost more than double what it does at night.
SolarCity is focusing its sales push on Tesla's 10 kilowatt-hour Powerwall, which provides back-up power in the case of electricity disruptions and can also be used up to 50 times a year to reduce a home's use of the grid to cut electricity costs, Mr. Rive says.
The Powerwall starts at $5,000 to lease or $7,140 to buy, which Mr. Rive says is on par with what consumers pay to buy and install a backup generator fueled with diesel or propane. Prices include installation and must be combined with a solar lease or purchase for panels, which can range from $17,000 to $23,000 for a typical home array. When added to an average-size array of home solar panels, a Powerwall can keep a house humming for a few hours or days on end, depending on how many appliances it must keep energized.
Some companies find batteries an attractive way to save money. Glenwood Management, which owns luxury apartment buildings, is installing big battery packs at nine buildings in New York City. The 100-kilowatt packs that can keep elevators running and common areas lighted cost about $500,000 apiece, but state rebates shave off up to 45% of the price.
The batteries can provide a spurt of electricity on hot days, allowing Glenwood to trim its use of expensive grid power. The company has cut its annual electricity cost at one 396-unit high rise by 15%, saving $82,000 in one year, says Josh London, a vice president at Glenwood.
Some experts say it will take years for home battery storage to catch on. Darren Hammell, chief technology officer for Princeton Power Systems, is one of them. His New Jersey-based company furnishes electronics to Tesla for its batteries and designs big commercial-scale electric storage systems, including one recently installed on San Francisco's Alcatraz island.
"Some people will go for anything with the name Tesla on it," he says, adding that the economics for residential batteries are so complicated that household use is "not compelling today and likely not for many years."
The budding industry will face significant headwinds if a 30% federal tax credit for solar projects set to expire in 2016 is allowed to lapse. And most players in the small network of companies that can sell and install solar-storage systems today would rather sell a single large battery system to a power utility or major industrial customer rather than sell a lot of tiny units to individual homeowners.
Still, if the costs come down far enough, the residential market could turn out to be a big one, says Haresh Kamath of the Electric Power Research Institute in Palo Alto, Calif. "It won't be the first time a product has gone from being a novelty to an essential item in the home."
Write to Rebecca Smith at rebecca.smith@wsj.com and Cassandra Sweet at cassandra.sweet@wsj.com
Credit: By Rebecca Smith And Cassandra Sweet
Subject: Solar energy; Electric utilities; Costs; Subsidies
Location: California Sacramento California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: May 28, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1683619857
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1683619857?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
The Savior Elon Musk; Tesla's impresario is right about one thing: Humanity's preservation is a legitimate government interest.
Author: Jenkins, Holman W, Jr
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 May 2015: n/a.
ProQuest document link
Abstract:
Barely developed in passing is that Tesla likely might not even exist without a former State Department official whom Mr. Musk hired (as Mr. Vance puts it) to explore "what types of tax credits and rebates Tesla might be able to drum up around its electric vehicles," which eventually would include a $465 million government-backed loan.
Full text: There is often a large difference between what people imagine they are doing and what they are actually doing. Especially in politics, any relationship between the effect of policy, the goal of policy and the stated goal is often incidental to the point of randomness.
Adding to the complexity, the doers themselves are often confused about the relationship between rhetoric and reality.
Which naturally brings us to a new biography of Elon Musk, whose entrepreneurial energy is a marvel; the world would be better off if there were more like him, even if a "nonstop horrible" childhood was a precursor to his adult achievements. That said, the "change the world" stuff, let alone the "save humanity" stuff, that fills Ashlee Vance's admired "Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future" is a tad overdone.
Jimmy Carter put solar panels on the White House roof. GM rolled out its EV1 electric car in 1996. Mr. Musk has been selling back to affluent, middle-aged baby boomers their own youthful ideals in the shape of roof panels and plug-in cars. These items sell not because the moment is ripe to transition the world economy to solar but as vanity trinkets for the rich that even the rich wouldn't buy without a large helping of taxpayer money.
Yes, Mr. Musk deserves credit for organizing his enterprises and getting them off the ground. The bureaucratic obstacles to starting a car business are especially daunting. And his Tesla Model S is a lovely object and wonderful machine.
Nowhere in Mr. Vance's book, though, does the figure $7,500 appear--the direct taxpayer rebate to each U.S. buyer of Mr. Musk's car. You wouldn't know that 10% of all Model S cars have been sold in Norway--though Tesla's own 10-K lists the possible loss of generous Norwegian tax benefits as a substantial risk to the company.
Barely developed in passing is that Tesla likely might not even exist without a former State Department official whom Mr. Musk hired (as Mr. Vance puts it) to explore "what types of tax credits and rebates Tesla might be able to drum up around its electric vehicles," which eventually would include a $465 million government-backed loan.
And how Tesla came by its ex-Toyota factory in California "for free," via a "string of fortunate turns" that allowed Tesla to float its IPO a few weeks later, is just a thing that happens in Mr. Vance's book, not the full-bore political intrigue it actually was.
The fact is, Mr. Musk has yet to show that Tesla's stock market value (currently $32 billion) is anything but a modest fraction of the discounted value of its expected future subsidies. In 2017, he plans to introduce his Model 3, a $35,000 car for the middle class. He expects to sell hundreds of thousands a year. Somehow we doubt he intends to make it easy for politicians to whip away the $7,500 tax credit just when somebody besides the rich can benefit from it--in which case the annual gift from taxpayers will quickly mount to several billion dollars each year.
Mother Jones, in a long piece about what Mr. Musk owes the taxpayer, suggested the wunderkind could be a "bit more grateful, a bit more humble." Unmentioned was the shaky underpinning of this largess. Even today's politicized climate modeling allows the possibility that climate sensitivity to carbon dioxide is far less than would justify incurring major expense to change the energy infrastructure of the world (and you certainly wouldn't begin with luxury cars). Were this understanding to become widespread, the subliminal hum of government favoritism could overnight become Tesla's biggest liability.
Mr. Musk's other enterprise is SpaceX, about which it's possible to be a lot more admiring. Any government is going to be a buyer of services; it's only sensible that Washington buy more of its space services from competitive private contractors rather than try to produce them in-house by NASA.
As Mr. Musk has maintained (and so have we), humanity's ultimate preservation is a legitimate government interest. He's not the first to suggest that dramatically reducing the cost of earth orbit is a key to future space endeavors. He isn't the only dot-com millionaire to turn his attention to space.
If he succeeds, though, in delivering his cheap, reusable heavy-lift vehicle, vast new possibilities will open up. Fifty years from now if there are hotels and factories in orbit, they may well be SpaceX hotels and factories. If a human outpost materializes on Mars, it may well be a SpaceX outpost. If human intelligence has safely spread beyond the solar system when the next errant rock comes along, Mr. Musk may well be one of those whom distant posterity will thank--along with H.G. Wells, Robert Goddard, Neil Armstrong, Stanley Kubrick, Robert Zubrin, Mr. Spock and many others.
But all this is a long way off. Let's hope Mr. Musk isn't distracted by too many biographers in the meantime.
Credit: By Holman W. Jenkins, Jr.
Subject: Research & development--R & D; Baby boomers; Automobile industry
Location: California
People: Carter, Jimmy
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: May 29, 2015
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1684021276
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1684021276?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Motors CFO to Retire This Year; Luxury electric-car maker's first finance chief helped lead its IPO
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 June 2015: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. Chief Financial Officer Deepak Ahuja plans to retire later this year when the electric-car maker appoints his replacement, a move disclosed on Tuesday at the company's annual shareholder meeting.
Full text: Tesla Motors Inc. Chief Financial Officer Deepak Ahuja plans to retire later this year when the electric-car maker appoints his replacement, a move disclosed on Tuesday at the company's annual shareholder meeting.
The 52-year-old joined the company in 2008. He said the decision was "akin to letting go of a child," but he had "other things on my bucket list to check off."
One of Tesla's longest-serving executives, Mr. Ahuja played an important role in the company's rise from startup to highly-valued electric car maker. He was its first finance chief and helped guide it through its initial public offering in addition to handling its post-IPO financing.
"He has done an amazing job," Elon Musk, chief executive and a co-founder of the Palo Alto, Calif.-based company, said at the end of the company's shareholder meeting.
Mr. Musk also told shareholders that an autopilot feature developed for newer versions of its Model S car and which will allow for predominantly autonomous highway driving should be available to some "early access" customers later this month. He described the limited availability as a "beta" test.
"I am testing the latest version every week. We are making gradual progress toward [supplying a] releaseable bit of software," Mr. Musk said.
Mr. Musk also updated an estimate to between one and three years before a driver could "fall asleep in your car and wake up at your destination." Last year, he estimated it would take five years.
He said that in response to some criticism of the capabilities of the company's Powerwall home battery systems announced in late April, Tesla has increased the capabilities on the power storage packs to a peak output of 7 kilowatts from 3.3 kilowatts.
Mr. Musk said the Model X sport-utility vehicle would start deliveries in between three and four months from now. The range could mean another slight delay and put first deliveries toward the very end of the third quarter. Much of Tesla's sales goals and financial projections count on selling thousands of Model X vehicles in the fourth quarter.
Separately, Mr. Musk said his Space Technologies Corp., or SpaceX, wouldn't file for a public offering any time soon. "We will probably go public once we have regular flights to Mars," he said.
There were two shareholder questions at the meeting, both asking Tesla to stop using leather and other animal products in its manufacture of its vehicles. Tesla directors recommended against approving that measure.
Tesla shares were off fractionally in late trading after falling 29 cents to $256 in 4 p.m. Nasdaq trading.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Shareholder meetings; Automobile industry; Vehicles; NASDAQ trading
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jun 9, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1686855514
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1686855514?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Motors Obtains Credit Line From Five Banks; Credit could be extended to $750 million by meeting certain conditions
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 June 2015: n/a.
ProQuest document link
Abstract:
The filing said the agreement was with Deutsche Bank, Bank of America, Goldman Sachs, J.P. Morgan Chase, Morgan Stanley, Wells Fargo and Credit Suisse.
Full text: Tesla Motors Inc., which burned through more than $500 million in cash in the first quarter, obtained a credit line of up to $750 million, the company disclosed in a regulatory filing Friday after the stock market closed.
The filing said the revolving line of credit, secured by property, inventory and equipment owned by Tesla, was for $500 million but could be extended to $750 million by meeting certain conditions.
The filing said the agreement was with Deutsche Bank, Bank of America, Goldman Sachs, J.P. Morgan Chase, Morgan Stanley, Wells Fargo and Credit Suisse.
Tesla has been using up its cash reserves as it spends ahead of the launch of the Model X sport-utility vehicle, which has been delayed and is due out in August or September. The company has said it would begin generating free cash flow in the fourth quarter, but a further delay in the Model X could mean its cash supplies could dip to dangerously low levels.
Following the reporting of first quarter earnings , analysts described Tesla's cash-use as "eye-watering" and "disquietingly large."
Tesla revealed in the first quarter that it had already taken out a $100 million line of credit.
This type of asset-backed lending doesn't lead to dilution of shareholders, which could be a concern after the company borrowed $2.3 billion in 2014 through a convertible bond offering. That borrowing can be turned into stock.
The company said during its first quarter earnings report that it had closed on a $100 million credit line related to its leasing program and that it expected to close on additional lines of credit soon.
Its cash and equivalents fell to $1.5 billion on March 31 from $1.9 billion three months earlier and $2.4 billion a year ago.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Lines of credit
Company / organization: Name: JPMorgan Chase & Co; NAICS: 522110, 522292, 523110; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Bank of America Corp; NAICS: 522110, 551111; Name: Wells Fargo & Co; NAICS: 522110, 551111; Name: Credit Suisse Group; NAICS: 522110; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120; Name: Deutsche Bank AG; NAICS: 522110, 551111; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jun 12, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1687757490
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1687757490?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Overheard: Tesla Motors Races the Clock
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 June 2015: n/a.
ProQuest document link
Abstract:
When it comes to the rollout of the Model X SUV, Tesla Motors shareholders ought to keep an eye on the calendar.
Full text: When it comes to the rollout of the Model X SUV, Tesla Motors shareholders ought to keep an eye on the calendar.
Tesla chief Elon Musk said during last week's shareholder meeting that Model X deliveries will begin "probably in the next three to four months." Tesla later reaffirmed that they would begin late in the third quarter.
Still, for investors, the timetable could be a worry. Tesla has forecast 55,000 deliveries this year, and will need a strong Model X launch to meet its goal. That is because deliveries of its Model S sedan aren't growing especially quickly. Tesla expects 10,000 to 11,000 in the second quarter, after recording 10,045 in the first quarter. Together that amounts to about 40% of the full-year guidance. So the year's last few months are shaping up to be critical for Tesla. Analysts expect automotive revenue of $1.9 billion in the fourth quarter, according to FactSet. That comes out to 36% of the full-year forecast.
With Tesla's stock up about 24% this year, investors have to hope Mr. Musk's forecast doesn't get stuck in traffic.
Subject: Investments; Shareholder meetings
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jun 14, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1687912615
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1687912615?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla's Mass-Market Portfolio to Include Sedan, Crossover; Company sees a million Tesla vehicles on the world's roads by 2020
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 June 2015: n/a.
ProQuest document link
Abstract:
At some point in the future, Tesla executives believe lithium-ion battery technology will become so inexpensive and widely available that electric powertrains "will become the predominant and primary fuel for light vehicles," replacing internal combustion engines as the industry's mainstay propulsion system.
Full text: Tesla Motors Inc. is developing electric cars that go beyond the coming mass-market Model 3 offering, and projects there will be a million Teslas on the world's roads by 2020.
JB Straubel, Tesla's chief technical officer, disclosed additional details of the luxury electric-car maker's plans at a conference in Washington, D.C. on Monday, saying the third-generation vehicles currently under development will be available as both sedans and crossovers. Due in 2017, the Model 3 lineup is expected to cost about $35,000 and give drivers 200 miles worth of battery range.
Rivals including General Motors Co. are expected to launch similar models by then, taking the industry to "the spot where we see mass market adoption taking off," he said.
At some point in the future, Tesla executives believe lithium-ion battery technology will become so inexpensive and widely available that electric powertrains "will become the predominant and primary fuel for light vehicles," replacing internal combustion engines as the industry's mainstay propulsion system. The Palo Alto, Calif.-based company is building a battery plant in Nevada to accelerate the shift.
Mr. Straubel said several times during his presentation that Tesla is developing cars to come after the Model 3, but didn't elaborate. By 2020, Tesla should be able to sell 500,000 annually, he said, reiterating the sales target set by Chief Executive Elon Musk.
The new details come a few days after Tesla said it arranged an additional up to $750 million in funding . The credit facility provides breathing room for a company that burned through $500 million in cash during its first quarter.
Within four months, the company will launch the Model X crossover. Building on technology used for the Model S, the Model X will play in a U.S. crossover market forecast by WardsAuto.com to exceed 5 million vehicles in 2015, more than 13% higher than 2014 and double the size of that market a decade ago.
Mr. Musk has said the company faces a delicate balancing act in timing the Model X launch. Vehicle debuts consume an enormous amount of capital, and even slight delays in the timing of the launch could deepen Tesla's losses or accelerate its cash burn.
On Monday, Standard & Poor's Ratings Services said Tesla's cash burn in 2015 "will likely be worse than we had previously expected" and "meaningfully negative." The asset-backed credit facility "should boost its otherwise weaker year-over-year liquidity and help it fund its substantial growth-related cash investments over the next 12 months," S&P said.
S&P affirmed a B- corporate credit rating with a stable outlook on the company. "In our opinion, the company could still tap additional sources of liquidity over the next 12 months to fund its ongoing growth investments," the firm said.
Although highly anticipated, relatively little is known about the Model 3. In an April proxy filing with the Securities and Exchange Commission, Tesla indicated the company had yet to complete a so-called "alpha" engineering prototype of the Model 3.
Tesla's past disclosures indicate there is still plenty of time to complete the prototype and still launch on target. Tesla's past disclosures help shed light on the company's timeline for completing prototypes.
In 2012 disclosure, Tesla said it completed the so-called alpha prototype of the Model S sedan in December 2010, or less than 20 months before the first delivery of the car in June of 2012. The alpha model was described as an "engineering prototype" and it was approved by the board one month after it was completed.
Write to John D. Stoll at john.stoll@wsj.com
Credit: By John D. Stoll
Subject: Vehicles; Product development; Automobile industry; Batteries
Location: Washington DC
People: Musk, Elon
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jun 15, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1688021561
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1688021561?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Partners With Battery Researcher to Lower Costs; Nova Scotia professor Jeff Dahn is known for work innovating lithium batteries
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 June 2015: n/a.
ProQuest document link
Abstract:
JB Straubel, Tesla's chief technologist, said this week that lithium-ion battery costs need to come down significantly in coming years so the auto maker can offer lower-priced vehicles.
Full text: Tesla Motors Inc. has locked a leading advanced battery researcher into an exclusive partnership designed to help the Palo Alto, Calif., electric-car maker sharply lower the cost of its batteries.
Jeff Dahn, a professor at Dalhousie University in Nova Scotia known for his work innovating lithium-ion batteries like those Tesla uses to power its Model S sedan, will cooperate with Tesla researchers. Now working on a project with 3M Co., he will enter a research partnership with Tesla when his current work is completed.
Financial terms weren't available, but Tesla said it would sponsor Mr. Dahn's research efforts roughly 6,400 kilometers from Northern California in return for his help solving Tesla's cost problem. JB Straubel, Tesla's chief technologist, said this week that lithium-ion battery costs need to come down significantly in coming years so the auto maker can offer lower-priced vehicles.
Tesla is the largest user of lithium-ion batteries in the world, and its cost of between $20,000 and $25,000 to produce a battery for the 85-kilowatt-hour Model S sedan is considered to be the lowest cost for a battery of that size. Based on Mr. Straubel's expectation, battery costs will need to be cut in half for Tesla to meet a sales target of a cumulative one million vehicles by 2020.
"At this point, we don't believe that range is the thing slowing EV growth. It's cost," Mr. Straubel said in an interview. "If we had twice the range, it would be more range than people needed. We are definitely on a road map to achieve half the cost."
Mr. Dahn will focus on trying to put more voltage into batteries without damaging their longevity and reducing the cost of materials.
He patented a nickel-cobalt-manganese chemistry for battery cathodes that is now commonly used in the industry. He is also the leading researcher on why lithium-ion batteries fail.
"I am very excited in putting our tools to work to help improve the energy density and longevity of their cells," Mr. Dahn said in a joint interview with Mr. Straubel.
Tesla's Nevada factory is expected to produce 50 gigawatt hours of battery packs a year. In 2014, all the lithium-ion battery plants in the world only produced 30 gigawatt hours.
It was Tesla's factory goals that attracted Mr. Dahn. "Once I heard of that I went to Tesla and wanted to know if they would be interested in sponsoring our work."
One of his areas of expertise is silicon anodes, an alternative to graphite, which is more expensive.
In addition to improvements in chemistry, Tesla is aiming to reduce its battery costs by bringing in-house the suppliers and processing of lithium, cobalt, graphite and nickel. Experts estimate that materials make up 60% of battery costs.
"We are making steady progress on all that. Want to be cautious and take our time and make sure we have partners that have the right road map," said Mr. Straubel. "I am happy with where those internal discussions are at."
Venkat Viswanathan, a Carnegie Mellon Universitybattery researcher, said news of the partnership has swept through elite research institutions.
"It's a pretty big deal. The partnership with Jeff makes perfect sense. He is a true pioneer in the field," Mr. Viswanathan said.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Lithium; Batteries; Research; Costs; Researchers
Location: Northern California Palo Alto California Nova Scotia Canada
Company / organization: Name: 3M Co; NAICS: 334417, 325412, 322230, 332216; Name: Dalhousie University; NAIC S: 611310; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jun 17, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1689325985
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1689325985?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesla's Need for Cash Should Cow Investors; Car company's high stock price and need for cash to fuel its ambitions are a risky combination
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 June 2015: n/a.
ProQuest document link
Abstract:
In its history as a public company, Tesla's capital expenditures have outpaced its operating cash flow, adjusted for changes in working capital, by a cumulative $2.7 billion, according to FactSet.
Full text: Tesla Motors has given itself more room to maneuver as it works toward profitability. But with its stock almost back to its high, don't rule out the company raising more money while it can.
Tesla recently took out a revolving credit agreement with several major banks, with capacity to borrow up to $750 million as needed for general corporate purposes. Company assets have been pledged as collateral for the majority of the credit line. The announcement came three days after current finance chief Deepak Ahujasaid he would retire , pending the naming of his successor.
Mr. Ahuja's successor will likely need to make use of the new funding. Auto manufacturing is capital intensive, especially when developing a new type of car, so spending money is nothing new for Tesla. In its history as a public company, Tesla's capital expenditures have outpaced its operating cash flow, adjusted for changes in working capital, by a cumulative $2.7 billion, according to FactSet.
Tesla's spending has increased just as rapidly as its ambitions. Chief Executive Elon Musk expects to deliver 55,000 vehicles this year and almost 10 times that number in 2020. Deliveries of the new Model X crossover vehicle are scheduled to begin "late in the third quarter," according to the company's most recent guidance. And Tesla is working on other projects besides cars, such as its home and utility-scale batteries .
To meet these longer-term goals, however, Tesla will need a lot of cash.
The company ended the first quarter with $1.5 billion in cash on its balance sheet, down from $2.3 billion as of last September. Last quarter's free cash outflow of $558 million was the largest on record at the company, but Tesla said in May that it expects to be cash-flow positive in the fourth quarter, the first full period in which the company will offer the Model X.
How smoothly that launch goes will have a significant impact on the rate at which Tesla continues to burn cash. A successful launch could mean a cash outflow of $1 billion over the final three quarters of 2015, according to Morgan Stanley's estimates. But should the Model X stumble out of the gate, the cash burn could exceed $1.5 billion. In the gloomier scenario, Tesla likely would end 2015 with less than $1 billion in available liquidity, even as it looks set to outspend cash flow again next year.
That is what makes Tesla's sky-high stock price such a tempting prospect--for the company to sell. Assume that Tesla were to issue stock at a steep discount of roughly 25% to the current market price, or at $200 apiece. This would raise $750 million in gross proceeds, while putting only 3.75 million new shares into the market, equal to just 3% of Tesla's diluted shares outstanding at the end of March. The minimal dilution isn't a bonus in this instance but a mark of overvaluation for a cash-hungry company.
Faced with such math, why wouldn't Tesla capitalize on the market's enthusiasm to fund its ambitions and issue even more? It can't assume such buoyant conditions will last indefinitely, even if investors right now seem to be pricing in exactly that.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Cash flow; Capital expenditures
People: Musk, Elon
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jun 21, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1690118811
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1690118811?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Owners Frustrated by Recharge Waits; Complaints about long lines to top-off batteries has sparked warnings to frequent users
Author: Ramsey, Mike; Proper, Ellen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 June 2015: n/a.
ProQuest document link
Abstract:
During the company's annual shareholder meeting in June, he indicated the Superchargers are too often being used by people who are driving around town instead of those needing energy for longer road trips, creating lines of people waiting for juice.
Full text: AMSTERDAM--Matthijs van Seventer won't take his Model S electric sedan to the Tesla charging station in the southeast part of the city if he is in a hurry. The chargers are typically loaded with taxicabs serving Schiphol airport.
"It's barely viable," he said standing near a row of superchargers, which for Tesla owners are the equivalent of gas pumps to quickly recharge their battery-powered vehicles. "When I arrived there was just one spot left."
Mr. van Seventer's frustration reflects a rare rift in what has typically been a cozy relationship between Tesla Motors Inc. and its thousands of owners around the world.
Free charging at company-run stations is one of a handful of unique incentives aimed at Tesla owners. Federal and local tax credits are available in many markets, and in some cities, including Oslo, Norway, electric vehicles can drive in high-speed lanes normally reserved for buses.
Even as Tesla has poured millions of dollars in creating a global network of free charges, owners of the $76,200 and up luxury sedans feel there still aren't enough.
Mimi Kim Jamil recently slipped into the last spot at the San Juan Capistrano (Calif.) Supercharger station where there are eight stalls and plugged in her 85 kilowatt-hour Model S. A moment later, two other Model S drivers pulled in behind.
Superchargers can recharge 80% of an 85 kilowatt-hour battery in about 30 minutes. While that's much longer than the about five minutes needed to refuel a gasoline-powered car, it is more than 10 times faster than a typical Tesla home charger.
"I felt bad for them," Ms. Jamil said, noting that the other seven Model S sedans were unattended, a sign that their owners may be picking up items at the nearby shopping center while their cars charged. The two drivers needing to charge "were just waiting, waiting, waiting."
Tesla is installing superchargers at a rate of about one new station a day around the world to keep up with sales that have reached 60,000 vehicles since it launched three years ago. The company's pipeline includes a sport-utility vehicle launching this fall, and ambitions to sharply increase annual sales through 2020.
Sales growth could put additional strain on the Tesla Supercharger network that currently includes 453 stations and 2,519 chargers, which are capable of cutting charge times from several hours to about 40 minutes.
"Tesla sales will drop if they don't build more supercharger stations," said Roger Chou in San Diego, who has ordered a Model X, but has been driving his brother's Model S. "If they want to start charging people, that is fine, but be clear about it, so people can make their decision before spending $100,000-plus on a car."
The trend has caught the attention of Chief Executive Elon Musk. During the company's annual shareholder meeting in June, he indicated the Superchargers are too often being used by people who are driving around town instead of those needing energy for longer road trips, creating lines of people waiting for juice.
"There are a few people who are quite aggressively using it for local supercharging," he said. "We'll sort of send them just a reminder note that it's cool to do this occasionally, but it's meant to be a long-distance thing."
That didn't sit well with some owners, because use of the chargers is included in the price of a Tesla, and advertised as being "free for life." While many of its rivals spend big money on advertising, Tesla has invested millions of dollars in charging stations meant to be an extra incentive for buyers to consider its pricey electric car.
After Mr. Musk addressed the issue at the shareholders meeting, about 500 comments reacting to his stance were made on my.teslamotors.com before site administrators closed it. At that point, the forum on Tesla's official website was restricted to car owners, who were asked to not speak to the press for fear of airing the issue publicly.
Tesla is looking for solutions and has taken additional action beyond sending the letters Mr. Musk referenced. Recognizing the cabs in Amsterdam might cause a problem, the company built a private supercharger for one of the cab companies operating Teslas; but cabs still use the public stations.
"We continue to build out our supercharger network to provide the current and future needs of our customers," Tesla said in a statement in response to the query on how the company will address supercharger use in the future.
Write to Mike Ramsey at michael.ramsey@wsj.com and Ellen Proper at Ellen.Proper@wsj.com
Credit: By Mike Ramsey and Ellen Proper
Subject: Shareholder meetings; Automobile industry; Vehicles; Automobile sales
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jun 30, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1692064069
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1692064069?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Owners Gripe Over Charging Up
Author: Ramsey, Mike; Proper, Ellen
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]01 July 2015: B.1.
ProQuest document link
Abstract:
During the company's annual shareholder meeting in June, he indicated the Superchargers are too often being used by people who are driving around town instead of those needing energy for longer road trips, creating lines of people waiting for juice.
Full text: AMSTERDAM -- Matthijs van Seventer won't take his Model S electric sedan to the Tesla charging station in the southeast part of the city if he is in a hurry. The chargers are typically loaded with taxicabs serving Schiphol airport.
"It's barely viable," he said standing near a row of superchargers, which for Tesla owners are the equivalent of gas pumps to quickly recharge their battery-powered vehicles. "When I arrived there was just one spot left."
Mr. van Seventer's frustration reflects a rare rift in what has typically been a cozy relationship between Tesla Motors Inc. and its thousands of owners around the world.
Free charging at company-run stations is one of a handful of unique incentives aimed at Tesla owners. Federal and local tax credits are available in many markets, and in some cities, including Oslo, Norway, electric vehicles can drive in high-speed lanes normally reserved for buses.
Even as Tesla has poured millions of dollars in creating a global network of free charges, owners of the $76,200 and up luxury sedans feel there still aren't enough.
Mimi Kim Jamil recently slipped into the last spot at the San Juan Capistrano (Calif.) Supercharger station where there are eight stalls and plugged in her 85 kilowatt-hour Model S. A moment later, two other Model S drivers pulled in behind.
Superchargers can recharge 80% of an 85 kilowatt-hour battery in about 30 minutes. While that's much longer than the about five minutes needed to refuel a gasoline-powered car, it is more than 10 times faster than a typical Tesla home charger.
"I felt bad for them," Ms. Jamil said, noting that the other seven Model S sedans were unattended, a sign that their owners may be picking up items at the nearby shopping center while their cars charged. The two drivers needing to charge "were just waiting, waiting, waiting."
Tesla is installing superchargers at a rate of about one new station a day around the world to keep up with sales that have reached 60,000 vehicles since it launched three years ago. The company's pipeline includes a sport-utility vehicle launching this fall, and ambitions to sharply increase annual sales through 2020.
Sales growth could put additional strain on the Tesla Supercharger network that currently includes 453 stations and 2,519 chargers, which are capable of cutting charge times from several hours to about 40 minutes.
"Tesla sales will drop if they don't build more supercharger stations," said Roger Chou in San Diego, who has ordered a Model X, but has been driving his brother's Model S. "If they want to start charging people, that is fine, but be clear about it, so people can make their decision before spending $100,000-plus on a car."
The trend has caught the attention of Chief Executive Elon Musk. During the company's annual shareholder meeting in June, he indicated the Superchargers are too often being used by people who are driving around town instead of those needing energy for longer road trips, creating lines of people waiting for juice.
"There are a few people who are quite aggressively using it for local supercharging," he said. "We'll sort of send them just a reminder note that it's cool to do this occasionally, but it's meant to be a long-distance thing."
That didn't sit well with some owners, because use of the chargers is included in the price of a Tesla, and advertised as being "free for life." While many of its rivals spend big money on advertising, Tesla has invested millions of dollars in charging stations meant to be an extra incentive for buyers to consider its pricey electric car.
After Mr. Musk addressed the issue at the shareholders meeting, about 500 comments reacting to his stance were made on my.teslamotors.com before site administrators closed it. At that point, the forum on Tesla's official website was restricted to car owners, who were asked to not speak to the press for fear of airing the issue publicly.
Tesla is looking for solutions and has taken additional action beyond sending the letters Mr. Musk referenced.
"We continue to build out our supercharger network to provide the current and future needs of our customers," Tesla said in a statement in response to the query on how the company will address supercharger use in the future.
Credit: By Mike Ramsey and Ellen Proper
Subject: Shareholder meetings; Automobile sales; Electric vehicles
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Jul 1, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1692223203
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1692223203?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Model S Deliveries Surge 52%; Results top company forecast; still needs sharp ramp to meet delivery goal for the year
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 July 2015: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc.'s second-quarter sales jumped 52%, higher than the company had forecast, giving the Silicon Valley auto maker important momentum ahead of the debut of its Model X sport-utility later this year.
Full text: Tesla Motors Inc.'s second-quarter sales jumped 52%, higher than the company had forecast, giving the Silicon Valley auto maker important momentum ahead of the debut of its Model X sport-utility later this year.
Tesla's shares rose 2% to $274.75 in morning trading following the disclosure Thursday. Tesla sold 11,507 Model S sedans for the three months that ended June 30, a company record. The global sales results were better than the 10,000 to 11,000 forecast the company had given two months ago in its first quarter earnings release .
While most companies throughout the world are struggling to sell their electric cars in an environment with continued low fuel prices, Tesla has established that it is appealing to a different buyer than its competitors.
The company has been successful by offering a long-range electric car--up to 270 miles on a charge--compared with most other electric cars that are under 100 miles. In addition, the Model S can carry up to seven passengers, has sports car acceleration of 5 seconds to 60 MPH or less and has a 17-inch touch screen display that allows Web surfing. In addition, Tesla continues to add features to the car through software updates, something other car makers are only just beginning.
Tesla likely has become the biggest seller of electric vehicles in the U.S.--though the company's obscure sales reporting methods, which don't normally break out monthly or regional results, make it difficult to determine.
In June, Nissan Motor Co. sold 9,816 Leafs in the first six months of 2015 in the U.S. Meanwhile, Tesla sold 21,552 globally in that period. Tesla doesn't normally break out regional results, but more than half of its sales in 2014 were from the U.S. The Tesla, which starts at $76,000, is likely outselling the $28,500 Leaf.
Importantly, the higher-than-expected sales should benefit Tesla's financial results. In the first quarter, the company burned through more than $500 million in cash and its losses widened to $154 million.
The average Tesla sells for around $100,000 based on the company's financial reports. That means an additional 500 to 1,000 sales of Model S vehicles are the equivalent of $50 million to $100 million in revenues.
Tesla is expected to begin selling a sport-utility vehicle called the Model X in September. With thousands of reservations on hand, Tesla is expected to get a jolt in sales in the final quarter of the year.
Dan Galves, an equity analyst with Credit Suisse, correctly forecast the higher-than-expected sales in a note out earlier this week. He said the stock had "substantially more upside" and raised his price target to $325 from $290.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Financial performance; Automobile sales; Electric vehicles
Location: United States--US
Company / organization: Name: Credit Suisse Group; NAICS: 522110; Name: Nissan Motor Co Ltd; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jul 2, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1692722832
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1692722832?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla's Chinese Check-Up; Auto maker's stock slumps 4% as China markets sell off
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 July 2015: n/a.
ProQuest document link
Abstract:
Nine out of 21 analysts surveyed by FactSet now have the equivalent of a buy rating on the stock, with an average price target of $280.84 among all surveyed.
Full text: All of a sudden, some sell-side analysts are starting to cool on Tesla Motors. Is the Chinese stock selloff part of the problem?
Analysts from two firms , Deutsche Bank and Pacific Crest Securities, have downgraded Tesla from "buy" to "hold" within the past two days, based on valuation. Nine out of 21 analysts surveyed by FactSet now have the equivalent of a buy rating on the stock, with an average price target of $280.84 among all surveyed. The stock was down 4% to $257 by midday Wednesday.
While Pacific Crest said in its note that Tesla is beginning to "turn the corner" in its China operations, that country's unfolding stock-market crash could be one reason for the sudden jitters.
After all, Chief Executive Elon Musk has long said he expects China to be a major source of revenue for the company. Some 15% of Tesla's $3.2 billion in sales originated from China in 2014.
In January, Mr. Musk dubbed Chinese sales "unexpectedly weak" and predicted the business would rebound "probably in the middle of the year." However, in the most recent quarterly report filed with the Securities and Exchange Commission, Tesla didn't break out its revenue by geographic segment.
Now that the middle of the year has brought major uncertainty to global markets, Tesla shareholders should be clamoring for an update.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Corporate profiles; Financial performance
Location: China
People: Musk, Elon
Company / organization: Name: Pacific Crest Securities; NAICS: 523110; Name: Tesla Motors Inc; NAICS: 336999; Name: Securities & Exchange Commission; NAICS: 926150; Name: Deutsche Bank AG; NAICS: 522110, 551111
Publication title: Wall Street Journal (Onli ne); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jul 8, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1694743996
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1694743996?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Hires Former Fashion Executive; Electric-car maker hires ex-Burberry executive Ganesh Srivats as it speeds up retail push
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 July 2015: n/a.
ProQuest document link
Abstract:
A former fashion executive has joined Tesla Motors Inc. as the company's vice president of North American sales, a move signaling Chief Executive Elon Musk's aim to gear up retail operations amid big growth plans.
Full text: A former fashion executive has joined Tesla Motors Inc. as the company's vice president of North American sales, a move signaling Chief Executive Elon Musk's aim to gear up retail operations amid big growth plans.
Ganesh Srivats, formerly retail and strategy executive with Burberry Group PLC, joined the Silicon Valley electric-car marker as it works to launch an SUV and meet its 55,000-vehicle sales target for 2015. Mr. Srivats's hiring was first reported by Bloomberg News. He joins a brand that primarily is considered to be a high-end luxury purchase, positioned against Porsche AG, Daimler AG's Mercedes-Benz and BMW AG.
Tesla's retail strategy is unique among U.S. auto makers. General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles deal with sprawling independent dealer networks that limit the manufacturer's control over the selling process. Tesla, relying heavily on internet-based selling tools and nontraditional advertising schemes, owns its retail network.
As the California auto maker grows and the Tesla models on the road age, however, its retail strategy will have to evolve to handle more service requests and a potential growth in deliveries . The company also plans to go down market within the next two years with a car priced at around $35,000, or less than half of what it costs to buy a Model S.
The U.S. remains Tesla's biggest market, although the company is expanding globally. In addition to a company-owned retail network, Tesla is installing a network of fast-charging stations for its owners to use. These superchargers juice up electric cars in a fraction of the time it takes a traditional charger, but can become clogged with owners in areas where Tesla is most popular.
Mr. Srivats most recently ran Burberry's America's retail operations. His move to the auto business marks the latest in a series of executive changes that have taken place at Tesla as it looks to transition from being a high-price niche brand to a more mainstream player.
Tesla earlier this month said it recorded another record sales quarter in the April through June period, delivering 11,507 Model S sedans over the period. Although that represents a 52% increase over the same period in 2014, the company needs a sharp increase in its quarterly sales pace if it hopes to meet the 55,000 target this year.
A new seven-seat crossover SUV, the Model X, is slated to go on sale in the second half of 2015, and Mr. Musk has said its addition will lead to a sales increase. A lower priced Model 3 lineup of sedans and crossovers will debut later in the decade and it will be priced to compete with mainstream brands, including Nissan Motor Co. and GM's Chevrolet.
Mr. Srivats couldn't immediately be reached for comment.
Write to John D. Stoll at john.stoll@wsj.com
Credit: By John D. Stoll
Subject: Automobile sales; Automobile industry; Market strategy
Location: California United States--US
People: Musk, Elon
Company / organization: Name: Fiat Chrysler Automobiles NV; NAICS: 336111; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Nissan Motor Co Ltd; NAICS: 336111; Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Porsche AG; NAICS: 336111; Name: Bloomberg News; NAICS: 519110; Name: Burberry Group PLC; NAICS: 448140, 315210; Name: Tesla Motors Inc; NAICS: 336999; Name: Daimler AG; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jul 10, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1695231319
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/169523 1319?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla's Nevada Holdings Nearly Triples; Auto maker's purchases add to area designated for 'gigafactory' construction
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 July 2015: n/a.
ProQuest document link
Abstract:
The land purchases, occurring in April and May, happened during a period when Tesla's finances already are strained by retooling its assembly plant in California for a new product, building fast-charging stations globally and constructing the battery plant.
Full text: Tesla Motors Inc. has nearly tripled its land holdings in Nevada in recent months, purchasing nearly 2,000 additional acres near Reno as it continues work on a factory intended to build batteries for electric cars and stationary backup batteries.
Tesla originally purchased 1,000 acres in 2014, when it struck a deal to locate outside Reno in nearby Storey County. But that agreement included options to purchase additional land in a region with relatively little in the way of manufacturing activities.
The land purchases, occurring in April and May, happened during a period when Tesla's finances already are strained by retooling its assembly plant in California for a new product, building fast-charging stations globally and constructing the battery plant.
Tesla recently received credit lines that could go up to $750 million to buoy its operations. The money is needed as the Silicon Valley electric car maker develops a cheaper lineup of electric cars for release later in the decade.
The majority of the land--1,863 acres--is buffer land, on which Tesla won't build structures but could place solar arrays to provide power to the plant, a spokeswoman said. The remaining 110 acres is for industrial purposes, though Tesla says it hasn't planned to expand beyond its original footprint yet.
The $5 billion plant--named the "gigafactory" by Chief Executive Elon Musk--is an important cog in Tesla's plans to build 500,000 electric cars and lower the cost of its batteries by 30% or more. About 25% of the capacity of the plant may be used for Tesla's stationary storage business, which is now selling backup batteries for homes, businesses and utilities.
Mr. Musk said in May that initial demand for the stationary storage batteries was so high that the company might have to consider expanding its already ambitious plans for the battery factory.
The battery factory is being built in phases. Currently, the steel structure and roof of the initial building is finished.
The battery factory will begin producing cells at the end of 2016. It will be expanded through 2020 to add capacity, eventually taking up 10 million square feet and producing up to 50 gigawatt-hours of battery packs annually. The single plant in Nevada will be able to produce more batteries than all the existing plants in the world today combined.
The nearly 3,000-acre site takes up about 2% of Storey County's land area and dwarfs most factory locations. The Tesla spokeswoman says the company has options to purchase several thousand more acres as well.
Tesla received incentives that could be worth up to $1.3 billion from the state of Nevada for the factory, which will employ up to 6,500 people when finished.
Pat Whitten, the Storey County administrator, said the factory announcement has been followed by a rush of developments by other companies, including those connected to Tesla.
Panasonic Corp., Tesla's primary partner in the battery factory, is bringing up to 15 additional companies to provide components, according to a presentation by Storey County building and community development director Dean Haymore.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Factories; Electric vehicles; Lines of credit
Location: Nevada California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jul 14, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1696062157
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1696062157?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Grabs Large Plot Of Land In Nevada
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 July 2015: B.1.
ProQuest document link
Abstract:
The land purchases, occurring in April and May, happened during a period when Tesla's finances are already strained by retooling its assembly plant in California for a new product, building fast-charging stations globally and constructing the battery plant.
Full text: Tesla Motors Inc. has boosted its land holdings in Nevada in recent months, purchasing about 2,000 additional acres near Reno as it continues work on a factory intended to build batteries for electric cars and stationary backup batteries.
Tesla originally purchased 1,000 acres in 2014 when it struck a deal to locate outside of Reno in nearby Storey County. But that agreement included options to purchase additional land in a region with relatively little in the way of manufacturing activities.
The land purchases, occurring in April and May, happened during a period when Tesla's finances are already strained by retooling its assembly plant in California for a new product, building fast-charging stations globally and constructing the battery plant.
Tesla recently received credit lines that could go up to $750 million to buoy its operations. The money is needed as the Silicon Valley electric car maker develops a cheaper lineup of electric cars for release later in the decade.
The majority of the land -- 1,863 acres -- is buffer land, on which Tesla won't build structures but could place solar arrays to provide power to the plant, a spokeswoman said.
The remaining 110 acres is for industrial purposes, though Tesla says it hasn't planned to expand beyond its original footprint yet.
The $5 billion plant -- named the "gigafactory" by Chief Executive Elon Musk -- is an important cog in Tesla's plans to build 500,000 electric cars and lower the cost of its batteries by 30% or more.
About 25% of the capacity of the plant may be used for Tesla's stationary storage business, which is now selling backup batteries for homes, businesses and utilities.
Mr. Musk said in May that initial demand for the stationary storage batteries was so high that the company might have to consider expanding its already ambitious plans for the battery factory.
The battery factory is being built in phases. Currently, the steel structure and roof of the initial building is finished.
The battery factory will begin producing cells at the end of 2016. It will be expanded through 2020 to add capacity, eventually taking up 10 million square feet and producing up to 50 gigawatt-hours of battery packs annually.
The single plant in Nevada will be able to produce more batteries than all the existing plants in the world today combined.
Tesla received incentives that could be worth up to $1.3 billion from the state of Nevada for the factory, which will employ up to 6,500 people when finished.
Credit: By Mike Ramsey
Subject: Automobile industry; Factories; Electric vehicles; Lines of credit; Land purchases
Location: Nevada
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Jul 15, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1696141403
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1696141403?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or d istribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla to Offer Three New Model S Versions; Offerings include increased electric range, new performance and lower-cost entry-level models
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 July 2015: n/a.
ProQuest document link
Abstract:
[...]Tesla is offering a $70,000 Model S with a 70 kwh battery pack, which is $5,000 less than the all-wheel-drive version that had been its entry-level model.
Full text: Tesla Motors Inc. said it would begin offering three new versions of its Model S, including an increase in its top-end electric range, a new, faster performance version and a lower-cost entry-level model.
New buyers will be able to purchase a 90 kilowatt-hour battery pack, which should add about 15 miles of range to the 85 kwh Model S that currently has a 265-mile range for an additional $3,000 option.
The Palo Alto, Calif.-based company also will begin selling a new "Ludicrous Mode" version of its "Performance" Model S that will be able to accelerate from 0-60 mph in 2.8 seconds, a rate that puts it alongside pricier performance cars in acceleration. That option would cost $10,000 to new buyers and existing owners who have the performance model can get the upgrade for $5,000. Finally, Tesla is offering a $70,000 Model S with a 70 kwh battery pack, which is $5,000 less than the all-wheel-drive version that had been its entry-level model.
"With the announcement today, we are improving both the low end and the high end," said Chief Executive Officer Elon Musk in a call with reporters. "We will continue to make improvements."
The new, more energy-dense battery pack is a result of the forthcoming Model X SUV, which is heavier and needs more energy to get about the same range as the Model S, Mr. Musk said. It is the same size and weight of the current pack, but uses a new chemistry.
The "Ludicrous Mode" could boost Tesla's sales of its most-expensive models, which already sell for more than $130,000. Using new circuitry, the battery can dump 1,500 amperes into the motors, driving blazing acceleration.
"It's just like having your own roller coaster. It requires a fairly advanced and exotic electronics. But it's still a great thing," he said. "You can't hide that light under a bushel."
He said timing of the launch of the Model X SUV and lower-cost Model 3 are on track. While being vague, he said the hotly anticipated Model X will be available in a "few" months, and the Model 3 lineup of $35,000 crossovers and sedans is coming in "a few years."
Mr. Musk also said the company would produce a new version of its Roadster sports car in about four years. The two-seat model went out of production in 2011 after selling about 2,600 globally.
Tesla shares rose 2.99% to $274.66 on Friday. Tesla's share price has been steadily rising since March 27, when it hit $181.
About 25% of Tesla shares were held by investors betting the price would decline on June 30, according to Nasdaq. Investors are wary of Tesla's big capital spending, including upgrading its Fremont, Calif., plant and building a large $5 billion battery factory in Nevada, combined with delays to its important Model X sport-utility vehicle.
Tesla's financial position strengthened when it obtained a credit line that could be tapped for up to $750 million. It had been running down its cash supply as losses increased. Tesla also reassured investors by delivering a 52% increase in global sales for the second quarter.
Jefferies analyst Dan Dolev said in a note to investors on Friday that cash concerns for Tesla were "overblown" and that he expected strong cash generation in the fourth quarter as Tesla ramped up sales of its Model X.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Product design; Product introduction
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jul 17, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1696930949
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1696930949?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Tesla CEO Powers Up 'Ludicrous' Model S
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 July 2015: B.4.
ProQuest document link
Abstract:
Tesla Motors Inc. said it would begin offering three new versions of its Model S, including an increase in its top-end electric range, a new, faster performance version, and a lower-cost entry-level model.
Full text: Tesla Motors Inc. said it would begin offering three new versions of its Model S, including an increase in its top-end electric range, a new, faster performance version, and a lower-cost entry-level model.
New buyers will be able to purchase a 90 kilowatt-hour battery pack, which should add about 15 miles of range to the 85 kwh Model S that currently has a 265-mile range for an additional $3,000 option.
The Palo Alto, Calif.-based company also will begin selling a new "Ludicrous Mode" version of its "Performance" Model S that will be able to accelerate from 0-60 mph in 2.8 seconds, a rate that puts it alongside pricier performance cars in acceleration. That option would cost $10,000 to new buyers and existing owners who have the performance model can get the upgrade for $5,000.
Tesla is offering a $70,000 Model S with a 70 kwh battery pack, which is $5,000 less than the all-wheel-drive version that had been its entry-level model.
"With the announcement today, we are improving both the low end and the high end," said Chief Executive Officer Elon Musk in a call with reporters. "We will continue to make improvements."
The new, more energy-dense battery pack is a result of the forthcoming Model X SUV, which is heavier and needs more energy to get about the same range as the Model S, Mr. Musk said. It is the same size and weight of the current pack, but uses a new chemistry.
The "Ludicrous Mode" could boost Tesla's sales of its most-expensive models, which already sell for more than $130,000. Using new circuitry, the battery can dump 1,500 amperes into the motors, driving blazing acceleration.
"It's just like having your own roller coaster. It requires a fairly advanced and exotic electronics. But it's still a great thing," he said. "You can't hide that light under a bushel."
He said timing of the launch of the Model X SUV and lower-cost Model 3 are on track. While being vague, he said the hotly anticipated Model X will be available in a few months, and the Model 3 lineup of $35,000 crossovers and sedans is coming in "a few years."
Mr. Musk also said the company would produce a new version of its Roadster sports car in about four years. The two-seat model went out of production in 2011 after selling about 2,600 globally.
Tesla shares rose 3% to $274.66 on Friday. Tesla's share price has been steadily rising since March 27, when it hit $181.
About 25% of Tesla shares were held by investors betting the price would decline on June 30, according to Nasdaq. Investors are wary of Tesla's big capital spending, including upgrading its Fremont, Calif., plant and building a large $5 billion battery factory in Nevada, combined with delays to its important Model X SUV.
Tesla's financial position strengthened when it obtained a credit line that could be tapped for up to $750 million. It had been running down its cash supply as losses increased. Tesla also reassured investors by delivering a 52% increase in global sales for the second quarter.
Jefferies analyst Dan Dolev said Friday that cash concerns for Tesla were overblown and that he expected strong cash generation in the fourth quarter.
Credit: By Mike Ramsey
Subject: Product design; Product introduction; Automobiles
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2015
Publication date: Jul 18, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1696993558
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1696993558?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without p ermission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Launches Referral Program to Juice Sales; Tesla CEO says incentive an experiment aimed at lowering cost of sales
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 July 2015: n/a.
ProQuest document link
Abstract:
Tesla has been able to sustain demand for its Model S without traditional sales incentives and discounts, although it has worked to cut the cost of leases and relies on government tax credits to lower the cost of its cars.
Full text: Tesla Motors Inc. is launching a $2,000 referral program for buyers and owners, attaching a rare direct financial incentive to a Model S sedan lineup that typically carries a waiting list.
The move, disclosed by Chief Executive Officer Elon Musk Wednesday afternoon, comes as the company prepares to launch its second higher-volume product, the Model X SUV . That vehicle, a roomier and heavier offering that uses similar components as the Model S, has been delayed and is due for launch in coming months.
Tesla's referral program offers current owners $1,000 to refer new customers. If the new customer buys a Model S, they too will get an incentive. Owners referring multiple customers are eligible for other rewards.
Base prices for various versions of the Model S range between $70,000 and $105,000.
Mr. Musk said the effort, currently slated to run 90 days, is designed to promote online sales and avoid using retail outlets. Estimating it costs about $2,000 to sell a vehicle through its stores, he said the discounts are an "experiment" aimed at assessing whether it is more cost effective to sell electric cars through personal referrals, or open new stores.
"We are asking ourselves the question 'how many stores should we open and how does word-of-mouth compare to store-based sales?'" Mr. Musk said. "This is something we are going to try out. If it works out well we are going to keep going."
Tesla currently has no plans to close stores, Mr. Musk added.
While Tesla doesn't employ traditional advertising techniques, such as running commercials, it does spend on marketing. Such costs increased to $48.9 million in 2014, up from $9 million in 2013 and $3.9 million in 2012--equivalent to $1,493 per vehicle in 2014 vs. $400 in 2013.
Tesla has been able to sustain demand for its Model S without traditional sales incentives and discounts, although it has worked to cut the cost of leases and relies on government tax credits to lower the cost of its cars. It also has offered a resale-value guarantee.
Mr. Musk says the company will eventually do more traditional advertising but will need more of a mass-market model, such as the cheaper Model 3 slated for 2017, to justify that switch.
Sales in the second quarter rose 52% and set a record. This sales incentive could produce a big bump in demand as it races to sell 55,000 cars this year, a substantial increase over the nearly 33,000 sold last year.
As part of the new incentive plan, Tesla owners will be able to work toward other incentives.
For instance, owners who refer five people get invited to an opening party at the company's battery factory under construction in Nevada. Ten referrals wins an owner the right to buy a "Founder Series" Model X--a model not available otherwise.
The first people to refer 10 customers in North America, Europe and Asia, get a Model X for free. The referrals must come before Oct. 31.
Mr. Musk has been limited in his attempt to use local dealers to reach out to customers because the company is banned from setting up stores in some states.
"This is a way to have a guerrilla battle with the car-dealer associations in certain states," Mr. Musk said. "We have Tesla owners in every state, but Tesla representatives are not allowed to do sales in any state, but Tesla customers can refer their friends."
Tesla's shares, which closed Wednesday at $263.82, have been surging since March 27, when the stock closed at $181. A series of new product announcements, including the launch of a stationary storage battery business, has propelled interest in the company.
The Palo Alto, Calif., company announced three new options for its Model S, including a longer-range model, a superfast sports car version and a lower-cost entry level model. Tesla is set to report its second-quarter results on Aug. 5.
Christina Rogers contributed to this article.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jul 29, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1699701177
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1699701177?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Presses Its Case on Fuel Standards; Tougher fuel-economy targets could benefit the electric-car maker, while posing a challenge for rivals
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Aug 2015: n/a.
ProQuest document link
Abstract:
"Auto makers are offering consumers more choice than ever in energy-efficient vehicles, but that's not enough," said a spokeswoman for the Alliance of Automobile Manufacturers, an industry lobbying group representing a dozen auto makers including GM, Toyota and Ford Motor Co. "We need consumers to buy them in high volumes to meet the steep climb in fuel-economy standards ahead."
Full text: PALO ALTO, Calif.--Auto makers have been laying the groundwork to seek relief from U.S. regulators on lofty fuel-economy targets. But Tesla Motors Inc. is rowing in the opposite direction, saying it wants to make the rules even tougher.
The Silicon Valley electric-car maker is preparing to make a public case this week for leaving mileage and emissions regulations intact, or making them even more stringent, a Tesla executive said. The company also will fight to keep other auto makers from loosening regulations in California, which has more ambitious targets than the federal government.
U.S. fuel-economy targets call for manufacturers to sell vehicles averaging 54.5 miles a gallon by 2025.
Tougher regulations could benefit Tesla, while challenging other auto makers that make bigger profits on higher-margin trucks and sport-utility vehicles.
Tesla's vice president of development, Dairmuid O'Connell, plans to argue to auto executives and other industry experts attending a conferenceon the northern tip of Michigan that car companies can meet regulations as currently written.
"We are about to hear a lot of rhetoric that Americans don't want to buy electric vehicles," Mr. O'Connell said in an interview ahead of a Tuesday presentation in Traverse City, Mich. "From an empirical standpoint, the [regulations] are very weak, eminently achievable and the only thing missing is the will to put compelling products on the road."
The presentation likely will further Tesla's reputation as industry agitator, a role often taken on by founder Elon Musk, who rankles rivals with proclamations about their apparent lack of progress in building viable electric vehicles. It also will mark a significant departure from other auto makers that historically have tried to soften fuel-economy regulations.
The industry typically has agreed to tougher standards under political pressure and only after thorough negotiations. In Detroit earlier this year, Mr. Musk urged auto makers to continue advancing electric vehicles amid falling oil prices, even while disclosing his company likely won't be profitable until 2020.
General Motors Co. and Toyota Motor Corp. are increasingly selling less-efficient pickup trucks and SUVs amid a sustained run of lower gasoline prices and are readying arguments for less-strict rules when federal regulators review mileage targets in 2017 and California reviews its regulations that require a minimum percentage of electric cars in 2016.
One route for relief would be getting progress points for autonomous features such as automatic braking that they argue both improve safety and save fuel to offset vehicles that are less fuel efficient than the target.
"Auto makers are offering consumers more choice than ever in energy-efficient vehicles, but that's not enough," said a spokeswoman for the Alliance of Automobile Manufacturers, an industry lobbying group representing a dozen auto makers including GM, Toyota and Ford Motor Co. "We need consumers to buy them in high volumes to meet the steep climb in fuel-economy standards ahead."
The 15 fully electric vehicles on sale last year registered 0.4% of overall auto purchases in the U.S., the spokeswoman said. The share of sales doesn't brighten much when adding other more-efficient vehicles with so-called alternative powertrains into the mix.
Hybrids, plug-in hybrids, electric vehicles and clean-diesel vehicles represented about 5.6% of sales in 2014, according to the Alliance. Trucks and SUVs, meanwhile, made up more than half of sales. Electric vehicles, while fuel-efficient, are tougher sells amid low gas prices because of their heftier price tags, even with offsetting tax credits.
Still, Tesla has established itself by selling electric cars starting around $70,000 and able to travel more than twice as far on a single battery charge than competing vehicles. Founded in 2003, it boasts a market capitalization exceeding $33 billion, more than half that of GM.
Traditional auto makers aren't sitting still. GM is readying the Chevrolet Bolt, a 200-mile range electric car due out in 2017. Germany's Audi and Nissan Motor Co. of Japan also have promised electric vehicles with ranges similar to Tesla's models.
Tesla can make extra money by trading regulatory credits it earns for selling cars that make zero pollution in states like California. Tesla reaped $216.3 million from selling credits in 2014. It banked $194.4 million and $40.5 million selling credits in 2013 and 2012, respectively.
Tesla contends that other auto makers have earned enough of their own credits and made such strides in improving fuel economy that they should be able to meet California regulatory mileage targets through 2022, according to an analysis the company plans to unveil Tuesday. Auto makers can meet current standards even without adding additional so-called zero-emission vehicles to the roads, Tesla says.Fiat Chrysler Automobiles NV Chief Executive Sergio Marchionne earlier this year suggested the U.S. government give auto makers more time to meet higher targets.
Regulators so far have been cool to relaxing standards. The Environmental Protection Agency will conduct an evaluation to "decide whether the standards for model years 2022-2025, established in 2012, are still appropriate given the latest available data and information," an agency official said. The "EPA's decision could go one of three ways: the standards remain appropriate, the standards should be less stringent, or the standards should be more stringent."
Other auto executives often argue that electric vehicles will need to make up a far larger share of sales to meet loftier fuel-economy targets, a tough mandate when gasoline prices are low.
In addition to federal fuel-economy targets, California and a group of 11 other states require auto makers to sell a certain percentage of their fleets with zero emissions--usually electric cars running on batteries or hydrogen fuel-cell vehicles. Mr. Marchionne, among the industry's more outspoken executives, has bemoaned losing money on cars manufactured to meet those regulations.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Electric vehicles; Automobile industry; Automobile sales; Prices; Trucks
Location: United States--US California
People: Musk, Elon
Company / organization: Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Aug 2, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1700577614
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1700577614?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
WSJ.D Technology: Tesla Presses Case on Fuel Standards --- Tougher targets could benefit the electric-car maker, while posing a challenge for its rivals
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Aug 2015: B.5.
ProQuest document link
Abstract:
"Auto makers are offering consumers more choice than ever in energy-efficient vehicles, but that's not enough," said a spokeswoman for the Alliance of Automobile Manufacturers, an industry lobbying group representing a dozen auto makers including GM, Toyota and Ford Motor Co. "We need consumers to buy them in high volumes to meet the steep climb in fuel-economy standards ahead."
Full text: PALO ALTO, Calif. -- Auto makers have been laying the groundwork to seek relief from U.S. regulators on lofty fuel-economy targets. But Tesla Motors Inc. is rowing in the opposite direction, saying it wants to make the rules even tougher.
The Silicon Valley electric-car maker is preparing to make a public case this week for leaving mileage and emissions regulations intact, or making them even more stringent, a Tesla executive said. The company also will fight to keep other auto makers from loosening regulations in California, which has more ambitious targets than the federal government. U.S. fuel-economy targets call for manufacturers to sell vehicles averaging 54.5 miles a gallon by 2025.
Tougher regulations could benefit Tesla, while challenging other auto makers that make bigger profits on higher-margin trucks and sport-utility vehicles.
Tesla's vice president of development, Diarmuid O'Connell, plans to argue to auto executives and other industry experts attending a conferencethat car companies can meet regulations as currently written.
"We are about to hear a lot of rhetoric that Americans don't want to buy electric vehicles," Mr. O'Connell said in an interview ahead of a Tuesday presentation in Traverse City, Mich. "From an empirical standpoint, the [regulations] are very weak, eminently achievable and the only thing missing is the will to put compelling products on the road."
The presentation likely will further Tesla's reputation as industry agitator, a role often taken on by founder Elon Musk, who rankles rivals with proclamations about their apparent lack of progress in building viable electric vehicles. It also will mark a significant departure from other auto makers that historically have tried to soften fuel-economy regulations.
The industry typically has agreed to tougher standards under political pressure and only after thorough negotiations. In Detroit earlier this year, Mr. Musk urged auto makers to continue advancing electric vehicles amid falling oil prices, even while disclosing Tesla likely won't be profitable until 2020.
General Motors Co. and Toyota Motor Corp. are increasingly selling less-efficient pickup trucks and SUVs amid a sustained run of lower gasoline prices and are readying arguments for less-strict rules when federal regulators review mileage targets in 2017 and California reviews its regulations that require a minimum percentage of electric cars in 2016.
One route for relief would be getting progress points for autonomous features such as automatic braking that they argue both improve safety and save fuel to offset vehicles that are less fuel efficient than the target.
"Auto makers are offering consumers more choice than ever in energy-efficient vehicles, but that's not enough," said a spokeswoman for the Alliance of Automobile Manufacturers, an industry lobbying group representing a dozen auto makers including GM, Toyota and Ford Motor Co. "We need consumers to buy them in high volumes to meet the steep climb in fuel-economy standards ahead."
The 15 fully electric vehicles on sale last year registered 0.4% of overall auto purchases in the U.S., the spokeswoman said. The share of sales doesn't brighten much when adding other more-efficient vehicles with so-called alternative powertrains into the mix. Hybrids, plug-in hybrids, electric vehicles and clean-diesel vehicles represented about 5.6% of sales in 2014, according to the Alliance. Trucks and SUVs, meanwhile, made up more than half of sales. Electric vehicles are tougher sells amid low gas prices because of their heftier price tags, even with tax credits.
Tesla can make extra money by trading regulatory credits it earns for selling cars that make zero pollution in states like California. Tesla reaped $216.3 million from selling credits in 2014. It banked $194.4 million and $40.5 million selling credits in 2013 and 2012, respectively.
Tesla contends that other auto makers have earned enough of their own credits and made such strides in improving fuel economy. Fiat Chrysler Automobiles NV Chief Executive Sergio Marchionne earlier this year suggested the U.S. give auto makers more time to meet higher targets. Regulators so far have been cool to relaxing standards.
The Environmental Protection Agency will conduct an evaluation to "decide whether the standards for model years 2022-2025, established in 2012, are still appropriate given the latest available data and information," an agency official said.
Credit: By Mike Ramsey
Subject: Automobile industry; Gasoline prices; Electric vehicles; Emission standards; Federal regulation; Energy efficiency; Fuel economy standards
Location: United States--US California
Company / organization: Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110; Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 4310: Regulation; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2015
Publication date: Aug 3, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1700640092
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1700640092?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Motors Earnings: What to Watch; Model X, China will be in focus when auto maker reports results
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Aug 2015: n/a.
ProQuest document link
Abstract:
Tesla has tripled its land holdings around its $5 billion battery factory in Nevada and CEO Elon Musk has mentioned that the huge plant may quickly be filled beyond capacity as demand for its stationary energy storage business grows.
Full text: Tesla Motors Inc. will deliver its second-quarter earnings report after the market closes on Aug. 5. Here's what you need to know:
EARNINGS FORECAST: Adjusted losses of 59 cents a share is the consensus of analysts polled by Thomas Reuters, compared with an 11-cent a share profit a year earlier. Net losses are forecast to come in at $117 million, more than the $61.9 million loss a year earlier, as Tesla ramped up spending on buildings, engineering and new staff to prepare for growth.
REVENUE FORECAST: Tesla's revenue is expected to rise 36% to $1.17 billion, on an adjusted basis. Tesla gives an adjusted revenue figure because of the way it accounts for a residual value guarantee that is linked to its lease program. The company already has reported that its vehicle deliveries rose 52% in the three months that ended June 30, but not all of the company's revenues come from vehicle sales.
WHAT TO WATCH: MODEL X: Tesla is likely to give more performance details about its Model X sport-utility vehicle and perhaps a more definitive timing to start of production. It has been delayed several times, hurting the company's cash generation. The electric SUV will have a 90 kilowatt-hour battery pack and unique, falcon-wing doors
CHINA: Tesla had a rough start in China last year, but recently the company says it is showing signs of strengthening in the world's largest auto market. The company may give details on how it is improving its operations there.
GIGAFACTORY: Tesla has tripled its land holdings around its $5 billion battery factory in Nevada and CEO Elon Musk has mentioned that the huge plant may quickly be filled beyond capacity as demand for its stationary energy storage business grows. Mr. Musk could give an update on where it stands and how it may grow.
AUTOPILOT: Tesla is working on an autopilot function for its Model S. Mr. Musk says he is driving a Model S several times a week that has the software, which will drive a car on the highway and even pass other vehicles on the road. The company may give a timeline for when this feature will be available to customers through an over-the-air update.
POWERWALL: How big of a business will Tesla's stationary storage business become? In April, Tesla unveiled back up batteries for homes, utilities and businesses. Tesla is likely to give more details on this business and perhaps begin breaking it out from automotive operations in its financial statements.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Net losses; Financial performance; Automobile industry; Earnings
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Aug 3, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1700787161
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1700787161?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Executive Presses Auto Makers on Electrification; Electric-car maker executive Diarmuid O'Connell says GM, other manufacturers lack a 'compelling product'
Author: Spector, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Aug 2015: n/a.
ProQuest document link
Abstract:
The 15 fully electric vehicles on sale last year registered 0.4% of overall auto purchases in the U.S., according to the Alliance of Automobile Manufacturers, an industry lobbying group in Washington that represents nearly a dozen auto makers including GM, Ford Motor Co. and Toyota.
Full text: TRAVERSE CITY, Mich.--Tesla Motors Inc. came to a conference here with a tough message for other auto makers: stop building compliance cars.
An executive at the Silicon Valley electric-car maker on Tuesday bemoaned the inability of General Motors Co. and other manufacturers to have better success selling their own battery-powered vehicles.
Instead, most other auto makers are producing electric cars to meet minimum regulatory standards while continuing to build and sell less-efficient gas-engine vehicles in droves, said Diarmuid O'Connell, Tesla's vice president of business development.
Mr. O'Connell said in an interview with The Wall Street Journal the problem for other companies is a lack of "compelling product" in showrooms. Other electric cars tend to be more utilitarian with uninspiring designs and a focus on low cost, he said.
"For the most part, everyone else is producing compliance vehicles," Mr. O'Connell said. "I look at some of the vehicles and think of toasters." He said cars are aspirational and electric vehicles should be designed accordingly to attract shoppers.
GM and other auto makers contend selling electric vehicles, hybrids and other cleaner cars is challenging as low gasoline prices send consumers flocking to less-efficient--but more profitable--pickup trucks and sport-utility vehicles.
Sales of trucks currently make up more than half the U.S. market. "Is that a bad thing? No, it's a representation of the market," said John Bozzella, head of the Association of Global Automakers, a Washington advocacy group representing Toyota Motor Corp., Honda Motor Co. and others, in a presentation Tuesday.
"It's a big country out there," Mr. Bozzella said. "Right now, customers are choosing light-truck segments."
Tesla, founded in 2003, gained success selling electric cars starting around $70,000 and able to travel more than twice as far on a single battery charge than other vehicles. Tesla has a market capitalization surpassing $33 billion, more than half the value of GM, despite founder Elon Musk's guidance earlier this year that the company likely won't be profitable until 2020.
Other auto makers are investing in electric vehicles. GM is readying the Chevrolet Bolt, a 200-mile range electric car due out in 2017. Germany's Audi and Nissan Motor Co. of Japan also have promised electric vehicles with ranges similar to Tesla's models.
But they point to significant challenges getting customers to buy electric vehicles or other cleaner cars. The 15 fully electric vehicles on sale last year registered 0.4% of overall auto purchases in the U.S., according to the Alliance of Automobile Manufacturers, an industry lobbying group in Washington that represents nearly a dozen auto makers including GM, Ford Motor Co. and Toyota.
Hybrids, plug-in hybrids, electric vehicles and clean-diesel vehicles represented about 5.6% of sales in 2014, according to the Alliance.
Tesla's Mr. O'Connell said he nevertheless "absolutely" advocates toughening federal fuel-economy standards that require auto makers sell vehicles averaging 54.5 miles a gallon by 2025. The mileage target suggests manufacturers should jump to develop electric vehicles, he said.
Other auto makers are more cautious, looking forward to a review of the standards in 2017.
Mr. O'Connell said other manufacturers in coming years can meet the federal standards and separate regulations for zero-emission vehicles in California.
Fuel prices, he said, will rebound. "The inexorable trend of gasoline prices is ever higher," he said. "We are going to see a return to higher gas prices."
Tesla benefits from earning money trading credits for exceeding regulatory targets. Mr. O'Connell acknowledged the benefit but emphasized Tesla's goal of producing mass-market electric vehicles. "We didn't set up the company to make money on credits," he said.
Mr. O'Connell said the adoption of electric plug-in vehicles has been more rapid during a similar time frame than for hybrids.
He pointed to 480 charging stations across the U.S. providing necessary infrastructure to charge electric cars to 170 miles of traveling range in a half-hour.
Write to Mike Spector at mike.spector@wsj.com
Credit: By Mike Spector
Subject: Electric vehicles; Gasoline prices; Automobile industry; Standards; Trucks
Location: United States--US California
People: Musk, Elon
Company / organization: Name: Alliance of Automobile Manufacturers; NAICS: 813910, 541820; Name: Honda Motor Co Ltd; NAICS: 336111, 336991, 336390; Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110; Name: Association of Global Automakers; NAICS: 813910; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Aug 4, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1701165138
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1701165138?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Takes Big Lead in China's Green Vehicle Market; Company has more than 80% of segment for imported plug-in hybrid, electric cars
Author: Bennett, Jeff
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Aug 2015: n/a.
ProQuest document link
Abstract:
While Tesla is currently the big player, Yonghe Huang, a director with the research group, expects other foreign companies to enter the China market with these types of vehicles and challenge the Silicon Valley electric-vehicle maker.
Full text: Tesla Motors Inc. is dominating China's "new energy" vehicle market, grabbing more than 80% of the segment for imported plug-in hybrid or electric cars, according to a Chinese auto research group Wednesday.
In a rare snapshot of Tesla's operations in China, the China Automotive Technology and Research Center said at an industry conference that 2,147 of the 2,645 green vehicles shipped to China and sold in the country during the first half were Tesla vehicles.
While Tesla is currently the big player, Yonghe Huang, a director with the research group, expects other foreign companies to enter the China market with these types of vehicles and challenge the Silicon Valley electric-vehicle maker. Tesla officials couldn't immediately comment.
The disclosure comes shortly before Tesla is slated to release its second-quarter earnings . Analysts are keeping a close eye on its progress in China after the company had a slow start in that market last year and was forced to retrench.
Separately, the analyst said the green-vehicle market is rapidly growing in China although it remains only a tiny sliver of the overall market.
More than 84,700 green vehicles were produced in the country last year--more than the previous four years combined. Through the first half of this year more than 83,000 vehicles have been produced. Electric and plug-in hybrids comprised 0.32% of overall sales in 2014 and grew to 0.61% for the first half of 2015.
Write to Jeff Bennett at jeff.bennett@wsj.com
Credit: By Jeff Bennett
Subject: Natural gas vehicles; Financial performance
Location: China
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Aug 5, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1701623674
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1701623674?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla's Loss Nearly Tripled in the Second Quarter; Luxury electric-car maker's spending on future initiatives offset higher sales
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Aug 2015: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc.'s second-quarter loss nearly tripled from a year earlier, as hefty spending on future initiatives overwhelmed the benefits of higher sales and reinforced concern about the electric-car maker's ability to turn a profit.
Full text: Tesla Motors Inc.'s second-quarter loss nearly tripled from a year earlier, as hefty spending on future initiatives overwhelmed the benefits of higher sales and reinforced concern about the electric-car maker's ability to turn a profit.
Tesla is plowing money into growth initiatives, including its Model X SUV due later this quarter and a Nevada battery factory slated to open in 2016. It has long-term ambitions to enter the lower-end of the electric-vehicle market and will unveil a preview of the cheaper Model 3 in 2016 with plans to launch it a year later.
The plan is costly and continues to mire the company in red ink. Cash, meanwhile, is relatively scarce given its costly capital-expenditure targets.
The company posted a net loss of $184 million in the second quarter, compared with $62 million a year ago, even as revenue climbed 24% to $955 million.
Tesla's operating loss of $61 million, or 48 cents a share, solidly outperformed analysts expectations for a loss of 60 cents a share. But the company lowered its annual sales outlook and indicated pricing is under pressure due to currency effects and a shift in the mix of Model S sedans it is selling.
Shares fell 3% after hours after closing up 1.45% at $270.13 in Wednesday's session. In a note to shareholders, the company said it is focused on building a long-term success story instead of meeting quarterly sales targets.
The Palo Alto, Calif., auto maker has generated excitement among investors with the rollout of a new stationary battery storage business and the promise of new models. Earlier this week, an executive created waves at an auto-industry conference in Michigan , saying many of the rival electric-car offerings on the market resemble toasters and suggesting the auto industry is still underachieving when it comes to improving vehicle emissions.
Tesla lowered its forecast for deliveries to 50,000 to 55,000 for the year from an earlier 55,000 estimate and said its gross margins may decline in the third quarter. Tesla said it also gained $20 million in new revenue in the second quarter from sales of certified preowned Model S. vehicles.
Tesla's deliveries rose 52% to 11,532 in the second quarter. It expects to sell about the same number of vehicles in the third quarter, which ends on Sept. 30 and to begin deliveries of the Model X late in the quarter.
"We do think it's going to be quite a challenging production ramp on the X," Tesla CEO Elon Musk said in a conference call with investors. "We only want to deliver great cars. We don't want to drive to a number that's greater than our ability to deliver high-quality vehicles."
The auto maker is confident it will have the demand for a production level of between 1,600 and 1,800 Model S and Model X vehicles a week in 2016. That would equate to 83,200 to 93,600 vehicles in 2016, substantially higher than 2015. Mr. Musk said he is still confident the company can achieve 500,000 vehicle sales by 2020.
Resources, however, are under pressure. Tesla's cash fell to $1.15 billion at the end of the quarter, down $359 million from the end of the first quarter. This decline came even as the company drew down $50 million of its $500 million revolving credit line.
Tesla spent $405 million on expanding its Fremont, Calif., plant and the so-called Gigafactory battery plant.
Mr. Musk said the company should have enough cash going forward without raising money through an equity sale, but he didn't close the door on it.
Adjusted gross margins in the quarter were 23.4%, about one percentage point lower than the company had expected. The gross margin indicates how much money the company makes excluding costs for expanding plants or doing research and development.
Tesla said it expects the pricing on the Model S to erode slightly as more buyers take the less-expensive Model S 70D model vs. the higher-end version.
Mr. Musk said that the company has booked reservations for $1 billion of stationary storage batteries, which will go into production this quarter. He said the company plans to sell about $40 million of the batteries in 2015, then jump to $400 million to $500 million in 2016.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile sales; Net losses; Automobile industry; Financial performance; Vehicles; Revolving credit
Location: Nevada
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Aug 5, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1701632628
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1701632628?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla: Small Skids Matter at This Speed; Tesla Motors' lowered delivery guidance could spell trouble for investors
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Aug 2015: n/a.
ProQuest document link
Abstract:
Tesla put the reduced expectation on deliveries down to concerns about the ability of some of its suppliers meeting the auto maker's quality standards: "In a choice between a great product or hitting quarterly numbers, we will take the former."
Full text: When your stock trades at more than four times forward revenue estimates, you have to deliver--literally, in Tesla's case.
Tesla Motors' second-quarter results, released late Wednesday, actually beat expectations on revenue and earnings. Yet the stock fell 6% in after-hours trading.
The disappointment all stemmed from the delivery--or rather the lack of it. Tesla tweaked its guidance for vehicle deliveries this year down to between 50,000 and 55,000 from a prior level of 55,000. This cut came despite the company confirming that its hotly anticipated Model X crossover vehicle is still scheduled to begin production next month.
Tesla put the reduced expectation on deliveries down to concerns about the ability of some of its suppliers meeting the auto maker's quality standards: "In a choice between a great product or hitting quarterly numbers, we will take the former."
Tesla added that it is "highly confident" of meeting its guidance for deliveries next year of between 82,000 and 94,000 vehicles.
Hitting that target--profitably--is becoming an urgent matter for investors . After negative free cash flow in the second quarter of $565 million, the largest on record, Tesla now has $1.2 billion in cash and equivalents on its balance sheet, and has drawn $50 million on its new line of credit. Net debt has almost tripled since the start of the year, to $1.47 billion.
The company's annual capital expenditure guidance of about $1.5 billion implies perhaps a 20% drop in spending in the second half of the year compared with the first. Still, that would slow the cash burn rather than eliminate it. Indeed, Tesla chief Elon Musk refused to comment in response to an analyst's question on Wednesday's call regarding whether Tesla might issue more equity.
And with very high growth expectations embedded in its valuation, Tesla's investors should be sensitive to even small signs of slippage.
Credit: By Charley Grant
Subject: Financial performance; Investments; Automobile industry
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Aug 5, 2015
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1701637298
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1701637298?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Tesla Spending Takes Its Toll --- Quarterly losses nearly triple but auto maker plans to stay on costly road, push Model X SUV
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 Aug 2015: B.3.
ProQuest document link
Abstract:
Tesla Motors Inc.'s second-quarter loss nearly tripled from a year earlier, as hefty spending on future initiatives overwhelmed the benefits of higher sales and reinforced concern about the electric-car maker's ability to turn a profit.
Full text: Tesla Motors Inc.'s second-quarter loss nearly tripled from a year earlier, as hefty spending on future initiatives overwhelmed the benefits of higher sales and reinforced concern about the electric-car maker's ability to turn a profit.
Tesla is plowing money into growth initiatives, including its Model X SUV due later this quarter and a Nevada battery factory slated to open in 2016. It has long-term ambitions to enter the lower-end of the electric-vehicle market and will unveil a preview of the cheaper Model 3 in 2016 with plans to launch it a year later.
The plan is costly and continues to mire the company in red ink. Cash, meanwhile, is relatively scarce given its costly capital-expenditure targets.
The company posted a net loss of $184 million in the second quarter, compared with $62 million a year ago, even as revenue climbed 24% to $955 million.
Tesla's operating loss of $61 million, or 48 cents a share, solidly outperformed analysts expectations for a loss of 60 cents a share. But the company lowered its annual sales outlook and indicated pricing is under pressure due to currency effects and a shift in the mix of Model S sedans it is selling.
Shares fell 3% after hours after closing up 1.45% at $270.13 in Wednesday's session.
The Palo Alto, Calif., auto maker has generated excitement among investors with the rollout of a new stationary battery storage business and the promise of new models. Earlier this week, an executive created waves at an auto-industry conference in Michigan, saying many of the rival electric-car offerings on the market resemble toasters and suggesting the auto industry is still underachieving when it comes to improving vehicle emissions.
Tesla lowered its forecast for deliveries to 50,000 to 55,000 for the year from an earlier 55,000 estimate and said its gross margins may decline in the third quarter.
"We do think it's going to be quite a challenging production ramp on the X," Tesla CEO Elon Musk said in a conference call with investors. "We only want to deliver great cars. We don't want to drive to a number that's greater than our ability to deliver high-quality vehicles."
The auto maker is confident it will have the demand for a production level of between 1,600 and 1,800 Model S and Model X vehicles a week in 2016. That would equate to 83,200 to 93,600 vehicles in 2016, substantially higher than 2015. Mr. Musk said he is still confident the company can achieve 500,000 vehicle sales by 2020.
Resources, however, are under pressure. Tesla's cash fell to $1.15 billion at the end of the quarter, down $359 million from the end of the first quarter. This decline came even as the company drew down $50 million of its $500 million revolving credit line.
Credit: By Mike Ramsey
Subject: Net losses; Automobile industry; Financial performance; Automobile sales; Revolving credit
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2015
Publication date: Aug 6, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1701707222
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1701707222?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Electric Cars as a Source of Capital; Electric cars, at least, can be capital goods even when not being driven. Vehicle-to-grid (V2G) technology can turn the big battery in a Tesla, Volt, or other electric car into a power plant
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Aug 2015: n/a.
ProQuest document link
Abstract:
Vehicle-to-grid (V2G) technology can turn the big battery in a Tesla, Volt or other electric car into a power plant, useful in reducing peak loads and hardening the grid against brownouts, outages and other problems.
Full text: The Aug. 3 Notable & Quotable about Uber increasing capital-stock formation is an intriguing notion and, I'm sure, correct as far as it goes. But as economist Don Boudreaux points out, an Uber car is only "a capital good for however long the car owner chooses to operate as an Uber driver." Presumably the drivers eat and sleep and may have lives.
Electric cars, at least, can be capital goods even when not being driven. Vehicle-to-grid (V2G) technology can turn the big battery in a Tesla, Volt or other electric car into a power plant, useful in reducing peak loads and hardening the grid against brownouts, outages and other problems. Combined with a rooftop solar installation, it can also produce income, or at least reduce outgo, and lead to greater energy security. And owners of electric cars can still drive their new capital for Uber when they're feeling ambitious.
Richard Factor
Sedona, Ariz.
Subject: Capital goods; Electric vehicles; Automobile industry
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Aug 7, 2015
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1701979858
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1701979858?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Is a Compliance Company; The electric-car maker's entire business model is rapidly becoming a regulatory creation.
Author: Jenkins, Holman W, Jr
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Aug 2015: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla's $70,000 Model S is as much a "compliance" vehicle as the electric cars built by other auto makers. That's one truth the audience didn't hear from Diarmuid O'Connell, Tesla vice president of business development, who made a much-noted appearance at a Michigan automotive seminar this week.
Mr. O'Connell called on Washington to stiffen the already-stiff Obama fuel-mileage mandates. He criticized electric cars churned out by other car makers as mere "compliance vehicles" that are not "compelling" to consumers.
Uh huh. The kettle speaks. Tesla benefits from a $7,500 buyers tax credit, and generates millions in revenues by selling emissions credits to other car makers under California's zero-emissions-vehicle mandate and federal greenhouse rules.
Tesla is a compliance company. Don't take our word for it. Mr. O'Connell said if other makers don't want to build electric cars, "they can buy credits from us, and we will invest in electric vehicles for them."
As for the Model S, Tesla's big seller may be "compelling" to its customers but it's also an absurd, anachronistic take on the electric automotive future it's supposed to herald. Form eschews function: It apes the conventional sports car with a long, sweeping hood to conceal a powerful piston engine that isn't there. It appeals to confused consumers who simultaneously want to display ostentation and green virtue.
Which brings us to Mr. O'Connell's vocal support for increased mileage mandates. These, in theory, are a mixed bag for Tesla. They generate tradable credits but also pollute the market for electric cars with vehicles built and dumped at a loss. But the rules also prop up Tesla's share price by making the company a potential acquisition target for a full-line auto maker looking to offset its pickups and SUVs.
In reality, Mr. O'Connell's conspicuous plumping for tougher mileage mandates is about something else. Tesla seeks to foster a political mood favorable to the extension of the tax credit without, you know, actually publicly lobbying for a grotesquely regressive handout. Yet it's easy to extrapolate that Tesla's entire market capitalization of $34 billion is nothing but the discounted present value of its expected future subsidies. Tesla, like any business, doesn't leave money on the table in its pricing. And the tax credit will become even more important, and a bigger part of Tesla's implicit revenue, when it launches its $35,000 Model 3 for the mass market.
All this emerges right now because of the coming "midterm review" of the Obama 54.5 miles-per-gallon target for 2025, which seems increasingly problematic when gas is selling for $2.63 nationally.
An instant classic in the annals of central planning is a new report from the National Academy of Sciences, which congratulates the administration on its success so far and predicts continued success. Included is only a slight caveat: The Obama rules require auto makers to make plug-in green cars but don't require consumers to buy them, and "there is evidence that consumers will not widely adopt technologies that interfere with driver experience, comfort or perceived utility even for large improvements in fuel economy."
Weight reduction also is playing a bigger role than Team Obama anticipated, so "there could be a negative impact on safety due to variance in the distribution of the mass across the vehicle fleet."
Speaking up as well are previously faceless myrmidons like Margo Oge, the recently retired chief of the Environmental Protection Agency's fuel-mileage efforts, and Mary Nichols, head of California's all-important Air Resources Board.
In interviews with the media, both exude confidence in Obama plans to sweep the gasoline engine into history's trash heap but are imprecise about the benefits of doing so. Ms. Nichols drives an electric Honda Fit around Sacramento--where more than half of electric supply comes from fossil fuels. Ms. Oge, who drives a rechargeable Chevy Volt, is a habitué of D.C. and suburban Virginia, where 60% of the electricity is generated from carbon-emitting sources, predominantly coal.
But never mind: If every car in America were electric and recharged using only renewables, the impact would be less than 2% of global emissions. Even the new Obama power-plant rules, which would be far more consequential, would prevent only 0.03 degrees Celsius of warming by 2100 (and then only if climate models predicting substantial warming are right).
So expect the Obama mileage rules to be felt widely--in the steepening price of new cars, in reduced revenues for traditional auto companies and their workers, in growing wealth for Tesla founder Elon Musk. One place the rules won't have meaningful impact is climate change.
Credit: By Holman W. Jenkins, Jr.
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Aug 7, 2015
column: Business World
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1702155895
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1702155895?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla to Raise $500 Million From Stock Sale; Financing to help pay for new vehicle launch and factory; CEO Musk to buy $20 million
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Aug 2015: n/a.
ProQuest document link
Abstract:
The company's market capitalization is $30.8 billion, more than half the value of much larger rivals General Motors Co. and Ford Motor Co. Detroit's auto giants are richly profitable amid strong sales of trucks and sport-utility vehicles in the U.S., and they sell millions of vehicles annually.
Full text: Tesla Motors Inc. proposed to sell $500 million worth of shares in a new round of fundraising that suggests the cost of disrupting the global auto industry with its pricey electric vehicles is more expensive than Chief Executive Elon Musk initially thought.
The stock sale comes on top of more than $4 billion Tesla has raised since the beginning of 2013. The auto maker has sold convertible notes and obtained lines of credit during that period to fund its ambitious bid to move from niche luxury-vehicle maker to a sizable force in the car business.
While the Palo Alto, Calif., auto maker consistently has expanded revenue during that two-year period, its net losses have deepened. And the company continues to burn large sums of cash on capacity expansions and new products.
Before Thursday's disclosure, the company's stock was down 12% since reporting a $184 million second quarter net loss on Aug. 5. Its shares rose 1.8% to $242.51 on Thursday.
"Tesla is able to very inexpensively raise money through share sales without much dilution," said Efraim Levy, an equity analyst at researcher S&P Capital IQ. "It demonstrates the power of an expensive stock."
Mr. Levy noted that existing investors will be hit with a 1.6% dilution based on Wednesday's $238.17 closing share price. Tesla plans to sell 2.1 million shares, including a $20 million allotment to be bought by Mr. Musk and $75 million worth purchased by underwriters.
Mr. Musk has said in recent years he didn't think Tesla would need to sell new shares to fund its next generation vehicles. Tesla said on Thursday that proceeds from the stock offering would be used for a variety of purposes, including growth of its showrooms, service centers and energy-storage business.
The company's market capitalization is $30.8 billion, more than half the value of much larger rivals General Motors Co. and Ford Motor Co. Detroit's auto giants are richly profitable amid strong sales of trucks and sport-utility vehicles in the U.S., and they sell millions of vehicles annually.
Like most of its global competitors, Tesla is spending heavily on future products that meet stringent regulations and consumer demand for high-tech features such as automated-driving. The company's 2015 capital expenditures bill is expected to hit $1.5 billion, roughly 15% of GM's budget. But GM sells nearly 10 million vehicles annually, or about 200 times more than Tesla's volume.
Tesla is "really getting the benefit of investor optimism and sometimes that's all you need until it flows into reality," Mr. Levy said. Mr. Musk has said the company won't achieve a profit by standard accounting measures until 2020, although it expects to stanch cash outflows by next year.
Tesla has reported a combined $1.8 billion in net losses since it was founded, including one profitable quarter in 2013.
In the first six months of 2015, Tesla's cash supply dropped to $1.15 billion from $1.9 billion as spending on several growth initiatives and daily operating costs increased. The losses and cash burn came despite a 24% climb in revenue to $955 million.
Tesla could fall short of its initial 55,000 delivery goal for 2015 as it scrambles to launch next month the Model X, a SUV based on the Model S sedan that was launched three years ago. It aims to sell 500,000 vehicles by 2020, and aims to start selling a lower-cost Model 3 line of vehicles in late 2017.
The auto maker has warned the Model X is complicated to build, and said that delays introducing the SUV could be costly.
Tesla's billionaire founder owns about 27% of the company's shares, and has placed a big bet on building its own advanced batteries.
A factory now under construction near Reno, Nev., is set to start production next year and produce batteries for automobiles and for storing electricity for homes and businesses.
Write to Mike Ramsey at mike.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Net losses; Automobile industry; Vehicles; Capital expenditures; Lines of credit
Location: Nevada
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Aug 13, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1703566350
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1703566350?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla's New Deal: Fewer Cars, More Shares; Plan for stock sale cheers investors, fueling nearly 3% stock gain
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Aug 2015: n/a.
ProQuest document link
Abstract:
The $500 million target equates to only around one-quarter of the company's cash-burn rate, based on the trailing four quarters.
Full text: Tesla Motors, having sent its stock into a funk with weak vehicle delivery numbers, has apparently saved the day by delivering more shares.
Before Thursday, the stock had dropped 12% since Tesla earlier this month lowered its projection for how many cars it will deliver this year to a range of 50,000 to 55,000, down from 55,000. Yet the announcement of plans to sell about $500 million of stock pushed the shares up nearly 3% on Thursday.
Perhaps investors were relieved the company wasn't looking for more. It could certainly use the cash, especially as much needs to go right if Tesla is going to hit even its lowered guidance on deliveries.
Tesla delivered 21,562 of its Model S sedans through the first half of 2015, a record for the company. It expects third-quarter deliveries to be similar to the last quarter's total of 11,532.
Adding it up, this implies Tesla will need to deliver more than 16,000 cars in the fourth quarter to hit the low end of its guidance, implying a jump of around 40% versus what is expected this quarter.
In Tesla's latest quarterly filing , it reaffirmed that deliveries of its new SUV, the Model X, will begin in the third quarter, which is a positive sign.
There is more to the story, though, with Tesla also writing that various factors "including the initiation and ramp of our production capacity required to bring Model X to market" could delay its introduction. Furthermore, Tesla wrote: "Since Model X shares certain production facilities with the Model S, Model S production may be impacted if the introduction and ramp of Model X is not as efficient as we plan."
Tesla said in its earnings release earlier this month that each one week push-out in the unspecified ramp period would slow Model X production by perhaps 800 vehicles.
Tesla's valuation rests overwhelmingly on long-term cash flow growth rather than the next couple of years, so meeting a short-term delivery goal might seem of secondary importance.
But Tesla's Chief Executive Elon Musk has said he expects deliveries to reach between 1,600 and 1,800 a week next year, when he expects the company will earn positive cash flow. The midpoint of that guidance implies about 22,000 deliveries per quarter, another significant boost in production.
And while valuation is tied to long-term projections, with Tesla currently holding less than $2 billion of available liquidity, attaining profitability soon isn't a trivial matter--as the latest equity issue demonstrates. The $500 million target equates to only around one-quarter of the company's cash-burn rate, based on the trailing four quarters.
Strong demand for the Model S will be needed, and this is another issue to watch. Tesla announced last month a Model S referral program worth $2,000 apiece last month. Mr. Musk called this an "experiment." But it is unclear why an unprofitable company with a highly regarded luxury product is using discounts at all.
Tesla's stock is 16% below last year's peak, but expectations remain high: The company is valued at 4.3 times forward sales, according to FactSet. That is ambitious when Tesla's own ambitious targets look under pressure.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Production capacity; Cash flow
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Aug 13, 2015
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1703669199
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1703669199?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Taps Investors Again for Cash
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 Aug 2015: B.1.
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Abstract:
The company's market capitalization is $30.8 billion, more than half the value of much larger rivals General Motors Co. and Ford Motor Co. Detroit's auto giants are richly profitable amid strong sales of trucks and sport-utility vehicles in the U.S., and they sell millions of vehicles annually.
Full text: Tesla Motors Inc. proposed to sell $500 million worth of shares in a new round of fundraising that suggests the cost of disrupting the global auto industry with its pricey electric vehicles is more expensive than Chief Executive Elon Musk initially thought.
The stock sale comes on top of more than $4 billion Tesla has raised since the beginning of 2013. The auto maker has sold convertible notes and obtained lines of credit during that period to fund its ambitious bid to move from niche luxury-vehicle maker to a sizable force in the car business.
While the Palo Alto, Calif., auto maker consistently has expanded revenue during that two-year period, its net losses have deepened. And the company continues to burn large sums of cash on capacity expansions and new products.
Before Thursday's disclosure, the company's stock was down 12% since reporting a $184 million second quarter net loss on Aug. 5. Its shares rose 1.8% to $242.51 on Thursday.
"Tesla is able to very inexpensively raise money through share sales without much dilution," said Efraim Levy, an equity analyst at researcher S&P Capital IQ. "It demonstrates the power of an expensive stock."
Mr. Levy noted that existing investors will be hit with a 1.6% dilution based on Wednesday's $238.17 closing share price. Tesla plans to sell 2.1 million shares, including a $20 million allotment to be bought by Mr. Musk and $75 million worth purchased by underwriters.
Mr. Musk has said in recent years he didn't think Tesla would need to sell new shares to fund its next generation vehicles. Tesla said on Thursday that proceeds from the stock offering would be used for a variety of purposes, including growth of its showrooms, service centers and energy-storage business.
The company's market capitalization is $30.8 billion, more than half the value of much larger rivals General Motors Co. and Ford Motor Co. Detroit's auto giants are richly profitable amid strong sales of trucks and sport-utility vehicles in the U.S., and they sell millions of vehicles annually.
Like most of its global competitors, Tesla is spending heavily on future products that meet stringent regulations and consumer demand for high-tech features such as automated-driving. The company's 2015 capital expenditures bill is expected to hit $1.5 billion, roughly 15% of GM's budget. But GM sells nearly 10 million vehicles annually, or about 200 times more than Tesla's volume.
Tesla is "really getting the benefit of investor optimism and sometimes that's all you need until it flows into reality," Mr. Levy said. Mr. Musk has said the company won't achieve a profit by standard accounting measures until 2020, although it expects to stanch cash outflows by next year.
In the first six months of 2015, Tesla's cash supply dropped to $1.15 billion from $1.9 billion as spending on several growth initiatives and daily operating costs increased. The losses and cash burn came despite a 24% climb in revenue to $955 million.
Tesla could fall short of its initial 55,000 delivery goal for 2015 as it scrambles to launch next month the Model X, a SUV based on the Model S sedan.
Credit: By Mike Ramsey
Subject: Net losses; Automobile industry; Securities offerings
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Aug 14, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1703882349
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1703882349?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Boosts Stock Offering; After investors cheered Thursday's share sale, the electric-car maker boosted the amount it will sell
Author: Dulaney, Chelsey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Aug 2015: n/a.
ProQuest document link
Abstract:
The auto maker has sold convertible notes and obtained lines of credit during that period to fund its ambitious bid to move from niche luxury-vehicle maker to a sizable force in the car business.
Full text: Tesla Motors Inc. on Friday boosted the size of its stock offering, unveiled just a day earlier, by more than $140 million.
Shares of Tesla, which rose on Thursday after the stock sale was announced , added another 1% to $244.75 a share in premarket trading.
The electric-car maker said it now plans to sell about 2.69 million shares, up from the 2.1 million shares it said it would sell on Thursday. At the offering price of $242 a share, the sale would raise about $652 million.
That figure excludes an option for the offering's underwriters to purchase shares. If the underwriters purchase those shares, the offering would total $750 million.
The new round of fundraising that suggests the cost of disrupting the global auto industry with its pricey electric vehicles is more expensive than Chief Executive Elon Musk initially thought.
The stock sale comes on top of more than $4 billion Tesla has raised since the beginning of 2013. The auto maker has sold convertible notes and obtained lines of credit during that period to fund its ambitious bid to move from niche luxury-vehicle maker to a sizable force in the car business.
While the Palo Alto, Calif., auto maker consistently has expanded revenue during that two-year period, its net losses have deepened. And the company continues to burn large sums of cash on capacity expansions and new products.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Credit: By Chelsey Dulaney
Subject: Automobile industry; Stock offerings; Lines of credit
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Aug 14, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1703915052
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1703915052?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Outlook for Tesla Shares Given a Boost
Author: Cox, Josie
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]19 Aug 2015: B.5B.
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Abstract:
The Morgan Stanley analysts write that Tesla "has been the most outspoken auto company on the use of autonomous technology to improve inefficiencies and safety of today's road transport."
Full text: Tesla Motors Inc. shares have had a stellar run over the past 2 1/2 years. If a Morgan Stanley note out Monday is anything to go by, the rally is far from over.
Analysts at the U.S. investment bank have raised their price target for the Palo Alto, Calif.-based company to $465 per share from $280 -- an increase of 66%.
"Ten trillion vehicle miles are driven annually," the analysts write.
"Firms with expertise in autonomous tech and networked machine learning can exploit the inefficiencies in the current model," they add.
They write that Tesla "may be uniquely positioned to dominate" and that their target price increase reflects Tesla's "potential to lead the revolution in shared mobility."
They have an overweight recommendation on the stock and list it as one of their "Top Picks."
Tesla shares have increased more than sevenfold since the start of 2013 and finished trading at $254.99 apiece on Monday.
The Morgan Stanley analysts write that Tesla "has been the most outspoken auto company on the use of autonomous technology to improve inefficiencies and safety of today's road transport."
All of Tesla's cars "are electric, connected, and able to "learn" through over-the-air firmware updates at any time. No other established auto maker can claim this today."
They write that they expect all car companies "will eventually see nearly 100% of their revenues shift from the sale of human-driven/individually owned cars to robot-driven/shared cars."
Credit: By Josie Cox
Subject: Automobile industry; Financial performance; Earnings per share
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5B
Publication year: 2015
Publication date: Aug 19, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1704928546
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1704928546?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
The Tesla Model S: Form Follows Function; The Tesla Model S exemplifies the adage "form follows function."
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Aug 2015: n/a.
ProQuest document link
Abstract:
[...]the energy efficiency of all cars at highway speeds is highly-related to the wind drag coefficient.
Full text: Regarding Holman Jenkins's "Tesla Is a Compliance Company " (Business World, Aug. 8): The Tesla Model S exemplifies the adage "form follows function." The absence of an obsolete internal combustion engine is immaterial to the car's design. Frontal crash safety is directly-related to the length of the crumple zone whose purpose is to absorb crash energy before passengers incur serious injury. The National Highway Traffic Safety Administration gives Tesla its highest rating for this most important area of risk (as well as for all other tested risks, including rollover, side impact, rear impact and crush).
Secondly, the energy efficiency of all cars at highway speeds is highly-related to the wind drag coefficient. With its "long, sweeping hood" the Model S is reported to have the lowest wind drag coefficient (0.24) of any production car.
Robert C. Dean
New Smyrna Beach, Fla.
Subject: Traffic accidents & safety
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Aug 23, 2015
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1706088584
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1706088584?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
The Tesla Model S: Form Follows Function
Author: Anonymous
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 Aug 2015: A.12.
ProQuest document link
Abstract:
[...]the energy efficiency of all cars at highway speeds is highly-related to the wind drag coefficient.
Full text: Regarding Holman Jenkins's "Tesla Is a Compliance Company" (Business World, Aug. 8): The Tesla Model S exemplifies the adage "form follows function." The absence of an obsolete internal combustion engine is immaterial to the car's design. Frontal crash safety is directly-related to the length of the crumple zone whose purpose is to absorb crash energy before passengers incur serious injury. The National Highway Traffic Safety Administration gives Tesla its highest rating for this most important area of risk (as well as for all other tested risks, including rollover, side impact, rear impact and crush). Secondly, the energy efficiency of all cars at highway speeds is highly-related to the wind drag coefficient. With its "long, sweeping hood" the Model S is reported to have the lowest wind drag coefficient (0.24) of any production car.
Robert C. Dean
New Smyrna Beach, Fla.
Subject: Traffic accidents & safety
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.12
Publication year: 2015
Publication date: Aug 24, 2015
Section: Letters to the Editor
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1706157918
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1706157918?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
China's Tesla Could Lose Power; Chinese government support is key to BYD's sales of hybrid and electric cars
Author: Bhattacharya, Abheek
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Aug 2015: n/a.
ProQuest document link
Abstract:
Key to this performance is Chinese government support. Besides subsidies for both consumers and companies, officials in some cities freely issue license plates for many electric and hybrid vehicles, the shortage of which is a major obstacle for conventional car sales.
Full text: While more investors are plugging into the reality of China's slowdown these days, the country's version of Tesla is at risk of being disconnected from it--maybe literally.
Electric-car maker BYD reported revenue for the first half of the year up 21% year-over-year, even as China's overall car-sales growth decelerated to 4.7%, the slowest pace since 2009. BYD can certainly boast that its new-age vehicles electrify its relative performance. It sold about four times as many electric and hybrid cars in this period as the year before, many of these plug-in hybrids.
Key to this performance is Chinese government support. Besides subsidies for both consumers and companies, officials in some cities freely issue license plates for many electric and hybrid vehicles, the shortage of which is a major obstacle for conventional car sales.
In exchange for a free license, though, officials in Shanghai require consumers to prove that they have a charging pole to plug in the hybrid. BYD says it refers consumers to a third party that can certify the consumer ordered a pole, even if it isn't installed.
It is not hard to imagine that more than a few consumers in China own a certificate but not actually a pole to connect to. It is also not hard to imagine authorities, conscious of such workarounds in a struggling economy, tightening enforcement and affecting BYD sales in the process.
Even if government support stays steady, BYD is sure to face competition. Many of its peers will launch electrics and hybrids in the next two years, notes Macquarie's Janet Lewis. Indigenous car maker Great Wall Motor is one of them, and will likely price its cars cheap. BMW and Tesla already offer electric models perhaps more attractive to the status-conscious.
Electric and hybrid vehicles make up just 19% of BYD's total revenue. The rest is made up of conventional cars, batteries, solar cells and handsets, not exactly businesses whose profit potential excites these days. BYD's first-half net-profit margin was 1.5%, compared with double digits at local car makers Geely and Great Wall.
BYD's biggest disconnect is that its Hong Kong shares trade at 28 times forward earnings when no car maker trades above 10 times in the current slowdown. True, BYD's valuation has fallen since it peaked at 68 times in early 2014, including substantially this year as investors fled highflying Chinese stocks. But that just means another dose of reality could cause the shares to fall further.
Write to Abheek Bhattacharya at abheek.bhattacharya@wsj.com
Credit: By Abheek Bhattacharya
Subject: Automobile industry; Hybrid vehicles; Automobile sales; Profits
Location: China
People: Lewis, Janet
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Aug 28, 2015
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Busines s And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1707773777
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1707773777?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Secures Lithium Hydroxide Supply for Its Battery Factory; Electric-vehical maker in long-term contract with Bacanora Minerals and Rare Earth Minerals
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Aug 2015: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. has secured a North American supply of lithium hydroxide through a long-term contract with mining company Bacanora Minerals Ltd. and Rare Earth Minerals PLC, giving the electric car maker a key base material used to produce lithium-ion batteries used its electric vehicles.
Full text: Tesla Motors Inc. has secured a North American supply of lithium hydroxide through a long-term contract with mining company Bacanora Minerals Ltd. and Rare Earth Minerals PLC, giving the electric car maker a key base material used to produce lithium-ion batteries used its electric vehicles.
Tesla is building a $5 billion battery factory in Nevada that aims to reduce battery costs by 30% or more, partly by bringing in in-house materials suppliers. The agreement with the two companies gives Tesla access to below-market-rate lithium in exchange for minimum purchase amounts over a five-year period, according to a statement.
The first phase of the battery factory, under construction near Reno, is expected to be completed next year. When the battery factory is fully built out, it will be capable of making 35 gigawatt-hours of battery cells, which is more than all of the current lithium-ion battery plants in the world today combined.
The two companies in partnership with Tesla have rights to land in northern Mexico, where lithium can be obtained from mineral-rich clay, according to the release. The two companies are calling themselves the "Sonora Lithium Project Partners."
The mine and processing facility are expected to have an initial capacity of 35,000 tons of lithium compounds and could be expanded to 50,000 tons.
Most of the world's supply of lithium comes from South America. While a key component of the battery, other materials like copper, nickel and graphite make up more of the actual material in most lithium-ion batteries.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Lithium; Batteries
Location: Nevada
Company / organization: Name: Bacanora Minerals Ltd; NAICS: 213114; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Aug 28, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1707813783
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1707813783?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Wants Obama Administration to Press China on Auto-Industry Rules; Tesla Motors says China's restrictions on foreign auto makers should be discussed during President Xi's visit
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Aug 2015: n/a.
ProQuest document link
Abstract:
[...]Nick Sampson, Faraday's "product architect," was an engineer instrumental in Tesla's development of the Model S. Mr. Sampson said the company, which aims to sell a car by 2017 carrying a battery bigger than the one powering the Model S, has "very ambitious" goals. "Because of [our] ability, capability and, yes, funding, we are confident we can deliver," Mr. Sampson said in an email.
Full text: Tesla Motors Inc. plans to press Obama administration officials to talk to Xi Jinping about making it easier for auto makers to do business in China during the Chinese president's visit to the U.S. next month.
The issue has gained urgency for Tesla as several new electric-car startups in the U.S. have emerged with Chinese financial backing. China prohibits foreign car makers from assembling vehicles in that market without a Chinese partner, which can make it much more difficult to operate there.
All the big global car companies, including General Motors Co. and Ford Motor Co., produce vehicles in China, mostly through joint ventures. Chinese car makers have yet to attempt to assemble vehicles with their brands in the U.S., but Tesla is concerned that they have a much easier road to travel. "The China-owned companies are not expected to sell controlling stakes to American companies and are free from other trade hurdles that we face," Tesla spokesman Ricardo Reyes said.
"The requirement that Tesla establish a joint venture for local manufacturing and other obstacles to our activities, such as much higher import duties in China compared to the United States, put American car companies at a significant disadvantage," he said.
The White House didn't immediately offer comment.
China is pushing hard for greater electric-vehicle use, and most major cities offer exemptions from high fees and a lottery system that buyers of gasoline-fueled vehicles must endure. Still, Tesla struggled last year in its launch of sales in China, and the recent devaluation of the yuan to the dollar makes it even more difficult to make money importing vehicles from its plant in California.
Meanwhile, new U.S.-based electric-car companies--some with Chinese backing--are expected to develop vehicles for sale in the U.S. and China. They include Faraday Future Inc., Atieva Inc. and Fisker Automotive Inc., as well as Chinese tech firm Leshi Internet & Technology Co. With significant funding but little publicity, they are hiring dozens of engineers from a list of established auto makers that includes Tesla.
Tesla also faces looming competition from some high-profile names, like Audi AG, which is developing an electric sport-utility vehicle, and Apple Inc., which is working on an electric car.
The electric-vehicle market remains tepid, with only a few players selling battery-powered cars in significant volumes despite big improvements in capability and hefty government incentives aimed at juicing EV sales. In recent years, several companies have either fizzled or failed to gain traction, including Los Angeles-based Coda Automotive Inc., Norway's Think Global A/S, Canada's Feel Good Cars Inc., and Aptera Motors
Tesla's early success in the electric-vehicle market has been unique. The Palo Alto, Calif.-based company founded by Elon Musk is on track to sell at least 50,000 vehicles in 2015 and plans to launch a sport utility in September and a cheaper model in 2017. While mired in red ink, its model sets the template for smaller ventures, including those with Chinese backing.
Fisker Automotive, which is based in Southern California, has revived its hopes after China's Wanxiang Group Corp. bought the failed hybrid-electric supercar maker out of bankruptcy in 2014. The company has secured a manufacturing facility in Southern California and is planning to re-launch the brand in coming years.
Beijing-based Leshi Internet & Technology, or LeTV, has hired more than 100 engineers in the U.S. from Tesla, Ford and others to build an electric vehicle. Earlier this month, the company unveiled plans for an electric sports car called Le Supercar, slated for sale in China, the U.S. and other markets. The company says it has teams in the U.S. and China working on the car.
Faraday Future, which was started in 2014, has drawn from Tesla's example. Like Tesla, which bears the name of inventor Nikol Tesla, the California-based company is named after scientist Michael Faraday. In addition, Nick Sampson, Faraday's "product architect," was an engineer instrumental in Tesla's development of the Model S.
Mr. Sampson said the company, which aims to sell a car by 2017 carrying a battery bigger than the one powering the Model S, has "very ambitious" goals. "Because of [our] ability, capability and, yes, funding, we are confident we can deliver," Mr. Sampson said in an email.
Tesla officials say they believe LeTV has provided funding for Faraday, though an LeTV spokesman called the suggestion "speculation."
Mr. Sampson declined to specifically comment on a LeTV connection. "While currently California-based, and with definitive future plans to be an American company in all aspects of R&D manufacturing and administration, [Faraday] is nonetheless a global company with a very diverse funding strategy, working directly with organizations not just in the U.S., but Asia and Europe as well," he wrote.
The company said it now has 300 employees.
A Faraday spokesman said the company is hunting for a manufacturing site in Nevada, Louisiana, Georgia or California and aims to secure suppliers for its vehicle. The company has reached out to auto-supply powerhouses like Michigan-based Delphi Automotive PLC, and to Silicon Valley's Nvidia Corp., whose offerings include computing technology for the auto industry.
LeTV and Beijing Automobile Industry Co. announced last year that they had jointly invested in Atieva. The company, which is based in Menlo Park, Calif., has been quiet on its business plan; its single-page website says the company is creating "a breakthrough electric car in the heart of Silicon Valley." The site advertises nearly 100 job openings, up sharply in the past few weeks.
Atieva has nearly a dozen former Tesla engineers and other professionals on staff, based on public profiles posted on LinkedIn. Chief Executive Bernard Tse is a former board member and vice president at Tesla. He declined to comment.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Vehicles; Engineers; Funding
Location: China California United States--US Southern California
People: Xi Jinping
Company / organization: Name: Fisker Automotive Inc; NAICS: 336111; Name: Atieva Inc; NAICS: 335912; Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Apple Inc; NAICS: 511210, 334111, 334220; Name: Audi AG; NAICS: 336111; Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Aug 28, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1707897923
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1707897923?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Consumer Reports Spends Its Juice, Badly; The product reviewer raves that a new Tesla 'broke' its rating system, but the real culprit is in the mirror.
Author: Jenkins, Holman W, Jr
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Aug 2015: n/a.
ProQuest document link
Abstract:
[...]why is CR gushing over acceleration at all? A Tesla's battery must be recharged with either fossil fuels or renewable energy that otherwise would be displacing fossil fuels elsewhere in the economy.
Full text: If, with their own money, Tesla and its customers want to revel in electric cars, that's wonderful. Nobody should object. But why should taxpayers subsidize their hobby as if some vital public purpose is being served? And why should Consumer Reports prostitute itself in its latest review of the Tesla Model S P85D, calling it basically the best car ever, with a higher-than-possible rating of 103?
Prostitute is not too strong a word. Consumer Reports does not give away its content for free. It makes money not from advertising but from its reputation for systematic, unbiased product reviews, which it expects customers to pay for (and Tesla shoppers can certainly afford to pay).
Not this time: "The Ratings of this ground-breaking vehicle are too good to keep to ourselves so we're sharing them with all our visitors," says the online version.
And, at least until Thursday night when the website went down for "maintenance," the reason became instantly apparent to any visitor who found himself waylaid on almost every page by a full-screen pop-up invitation: "Tesla's innovation shows we don't have to compromise. Stand with Consumer Reports as we fight for better cars."
CR is shilling not only for the car but the government policies that subsidize it. Or as CR's auto testing chief Jake Fisher says in an accompanying video, "At Consumer Reports, we believe improving fuel efficiency is a vital initiative."
Unfortunately, one product that doesn't get CR's withering eye is the public policy of shoveling taxpayer handouts at Tesla, which any close examination would quickly conclude is a case of costs without benefits.
Harder to remedy, even with an overnight overhaul of its website, will be the impression that CR abused its own rating process to inflate the score for the $127,000 Tesla Model S P85D. The magazine claims the pricey Model S is so good, it "broke" CR's rating system. But it looks more like CR broke its own rating system. Hard to reconcile is a perfect score in a review where the words "glaring omission at this price" or some variation are commonplace in reference to everything from sun visors to cup holders to malfunctioning door handles. Plus the car gets only an "average" on reliability, which already seems generous in light of complaints from Tesla owners on enthusiast message boards.
Let's postulate something else: A traditionally scrupulous CR review--even while praising the car's features--might well give any Tesla vehicle an "unacceptable" rating simply because it takes at least five hours to recharge except at one of Tesla's own supercharger stations (where it still takes 30 minutes).
But most bizarre is its reviewers' obsession with acceleration, as if 0-to-60 times are the most important consideration in CR's auto ratings.
Blindingly fast acceleration is useful on the street almost never; blindingly fast acceleration, in an electric car, eats up battery juice, which must be replenished at considerable inconvenience. As one of CR's three reviewers finally admits in a lengthy ancillary video that few will watch, the Tesla's acceleration is basically a "parlor trick," good for "giggles."
To which we might add: Buy a 10-year old 600cc sport bike on Craigslist for 1/50th the price. You will experience even faster acceleration and then you can put it away and still have plenty of money left over for a car (or three) that better serves the functions of a car, namely to transport people and their gear conveniently around town and around the country.
But why is CR gushing over acceleration at all? A Tesla's battery must be recharged with either fossil fuels or renewable energy that otherwise would be displacing fossil fuels elsewhere in the economy. If the goal is saving the planet, shouldn't CR be advising its readers to drive more slowly and efficiently, to avoid unnecessary trips, not to buy and use cars for joy-riding?
Let's hope that at least being corrected is the reliance on manipulative wording to minimize the impact of those criticisms its reviewers were apparently prepared to insist on. Two examples:
The Model S's standard fabric seats are actually a virtue because they "give buyers an option to skip the otherwise ubiquitous leather in this class."
And "While the Tesla outsells most conventional luxury sedans, its spartan interior comes up short on decadence."
It took Google 0.55 seconds to establish that Mercedes E-Class and S-Class and the BMW 5 and 7 series each sell more cars than Tesla does. But these sentences should get someone fired for another reason--basic writerly integrity. If it's necessary to say the car's interior is spartan, say it. Don't intentionally muddy the statement with cretinous word choices and misleading comparisons.
Maybe heads were rolling behind the "site under maintenance" sign that blocked access to CR's review for most of Friday. Let's hope so. In the meantime nothing here should be construed as encouraging anyone not to buy a Tesla Model S and love the car if that's how they feel about it.
All vehicles come with trade-offs. Some of the vehicles we love most come with quirks that would likely earn them a low rating in a traditionally scrupulous CR review. It's the taxpayer subsidies that are unjustified, as is CR's decision to throw away its reputation to propagandize for a public policy that it doesn't subject to any serious analysis.
Credit: By Holman W. Jenkins, Jr.
Subject: Fossil fuels; Product reviews
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Aug 28, 2015
column: Business World
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1707920490
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1707920490?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
China's Tesla Could Lose Power; Chinese government support is key to BYD's sales of hybrid and electric cars
Author: Bhattacharya, Abheek
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Aug 2015: n/a.
ProQuest document link
Abstract:
Key to this performance is Chinese government support. Besides subsidies for both consumers and companies, officials in some cities freely issue license plates for many electric and hybrid vehicles, the shortage of which is a major obstacle for conventional car sales.
Full text: While more investors are plugging into the reality of China's slowdown these days, the country's version of Tesla is at risk of being disconnected from it--maybe literally.
Electric-car maker BYD reported revenue for the first half of the year up 21% year-over-year, even as China's overall car-sales growth decelerated to 4.7%, the slowest pace since 2009. BYD can certainly boast that its new-age vehicles electrify its relative performance. It sold about four times as many electric and hybrid cars in this period as the year before, many of these plug-in hybrids.
Key to this performance is Chinese government support. Besides subsidies for both consumers and companies, officials in some cities freely issue license plates for many electric and hybrid vehicles, the shortage of which is a major obstacle for conventional car sales.
In exchange for a free license, though, officials in Shanghai require consumers to prove that they have a charging pole to plug in the hybrid. BYD says it refers consumers to a third party that can certify the consumer ordered a pole, even if it isn't installed.
It is not hard to imagine that more than a few consumers in China own a certificate but not actually a pole to connect to. It is also not hard to imagine authorities, conscious of such workarounds in a struggling economy, tightening enforcement and affecting BYD sales in the process.
Even if government support stays steady, BYD is sure to face competition. Many of its peers will launch electrics and hybrids in the next two years, notes Macquarie's Janet Lewis. Indigenous car maker Great Wall Motor is one of them, and will likely price its cars cheap. BMW and Tesla already offer electric models perhaps more attractive to the status-conscious.
Electric and hybrid vehicles make up just 19% of BYD's total revenue. The rest is made up of conventional cars, batteries, solar cells and handsets, not exactly businesses whose profit potential excites these days. BYD's first-half net-profit margin was 1.5%, compared with double digits at local car makers Geely and Great Wall.
BYD's biggest disconnect is that its Hong Kong shares trade at 28 times forward earnings when no car maker trades above 10 times in the current slowdown. True, BYD's valuation has fallen since it peaked at 68 times in early 2014, including substantially this year as investors fled highflying Chinese stocks. But that just means another dose of reality could cause the shares to fall further.
Write to Abheek Bhattacharya at abheek.bhattacharya@wsj.com
Credit: By Abheek Bhattacharya
Subject: Automobile industry; Hybrid vehicles; Automobile sales; Profits
Location: China
People: Lewis, Janet
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Aug 29, 2015
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Busines s And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1707936958
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1707936958?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Tesla Motors Seeks U.S. Help on China
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Aug 2015: B.4.
ProQuest document link
Abstract:
All the global car companies, including General Motors Co. and Ford Motor Co., produce vehicles in China, through joint ventures.
Full text: Tesla Motors Inc. plans to press Obama administration officials to talk to Xi Jinping about making it easier for auto makers to do business in China during the Chinese president's visit to the U.S. next month.
The issue has gained urgency for Tesla as several new electric-car startups in the U.S. have emerged with Chinese financial backing. China prohibits foreign car makers from assembling vehicles in that market without a Chinese partner, which can make it much more difficult to operate there.
All the global car companies, including General Motors Co. and Ford Motor Co., produce vehicles in China, through joint ventures. Chinese car makers have yet to attempt to assemble vehicles with their brands in the U.S., but Tesla is concerned that they have a much easier road to travel. "The China-owned companies are not expected to sell controlling stakes to American companies and are free from other trade hurdles that we face," Tesla spokesman Ricardo Reyes said.
"The requirement that Tesla establish a joint venture for local manufacturing and other obstacles to our activities, such as much higher import duties in China compared to the United States, put American car companies at a significant disadvantage," he said.
The White House didn't immediately offer comment.
China is pushing greater electric-vehicle use, and most major cities offer exemptions from high fees and a lottery system that buyers of gasoline-fueled vehicles face. Still, Tesla struggled last year in its launch of sales in China, and a recent devaluation of the yuan to the dollar makes it more difficult to make money importing vehicles from its plant in California.
Meanwhile, new U.S.-based electric-car companies -- some with Chinese backing -- are expected to develop vehicles for sale in the U.S. and China. They include Faraday Future Inc., Atieva Inc. and Fisker Automotive Inc., as well as Chinese tech firm Leshi Internet Information & Technology Corp.
Tesla also faces looming competition from some high-profile names, like Audi AG, which is developing an electric sport-utility vehicle, and Apple Inc., which is working on an electric car.
Tesla's early success selling electric-vehicle has been unique. The Palo Alto, Calif.-based company founded by Elon Musk is on track to sell at least 50,000 vehicles in 2015 and plans to launch a sport utility in September and a cheaper model in 2017. While mired in red ink, its model sets the template for smaller ventures, including those with Chinese backing.
Fisker Automotive, which is based in Southern California, has revived its hopes after China's Wanxiang Group Corp. bought the failed hybrid-electric supercar maker out of bankruptcy in 2014. The company has secured a manufacturing facility in Southern California and is planning to relaunch the brand in coming years.
Beijing-based Leshi Internet Information & Technology, or LeTV, has hired more than 100 engineers in the U.S. from Tesla, Ford and others to build an electric vehicle. Earlier this month, the company unveiled plans for an electric sports car called Le Supercar, slated for sale in China, the U.S. and other markets. The company says it has teams in the U.S. and China working on the car.
Faraday Future, which was started in 2014, has drawn from Tesla's example. Like Tesla, which bears the name of inventor Nikola Tesla, the California-based company is named after scientist Michael Faraday. In addition, Nick Sampson, Faraday's "product architect," was an engineer instrumental in Tesla's development of its Model S.
Mr. Sampson said the company, which aims to sell a car by 2017 carrying a battery bigger than the one powering the Model S, has "very ambitious" goals. "Because of [our] ability, capability and, yes, funding, we are confident we can deliver," Mr. Sampson said in an email.
Tesla officials say they believe LeTV has provided funding for Faraday, though LeTV called the suggestion "speculation."
Mr. Sampson declined to specifically comment on LeTV. Faraday, he said, is "a global company with a very diverse funding strategy, working directly with organizations not just in the U.S., but Asia and Europe as well," he wrote.
The company has reached out to auto-supply powerhouses like Michigan-based Delphi Automotive PLC, and to Nvidia Corp., which sells computing technology to the auto industry.
LeTV and Beijing Automobile Industry Co. said last year they had jointly invested in Atieva. The Menlo Park, Calif., company's website says it is creating "a breakthrough electric car in the heart of Silicon Valley."
Atieva has nearly a dozen former Tesla engineers and other professionals on staff, based on public profiles posted on LinkedIn. Chief Executive Bernard Tse is a former board member and vice president at Tesla. He declined to comment.
Credit: By Mike Ramsey
Subject: Automobile industry; Vehicles; Trade relations
Location: United States--US China
People: Musk, Elon Xi Jinping Obama, Barack
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9180: International; 8680: Transportation equipment industry; 1300: International trade & foreign investment
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2015
Publication date: Aug 29, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1707976830
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1707976830?ac countid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
WSJ.D Technology: Tesla Signs Long-Term Supply Deal For Lithium
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]31 Aug 2015: B.4.
ProQuest document link
Abstract:
Tesla Motors Inc. has secured a North American supply of lithium hydroxide through a long-term contract with mining company Bacanora Minerals Ltd. and Rare Earth Minerals PLC, giving the electric-car maker a key base material used to produce lithium-ion batteries for its electric vehicles.
Full text: Tesla Motors Inc. has secured a North American supply of lithium hydroxide through a long-term contract with mining company Bacanora Minerals Ltd. and Rare Earth Minerals PLC, giving the electric-car maker a key base material used to produce lithium-ion batteries for its electric vehicles.
Tesla is building a $5 billion battery factory in Nevada that aims to reduce battery costs by 30% or more, partly by bringing in in-house materials suppliers. The agreement with the two companies gives Tesla access to below-market-rate lithium in exchange for minimum purchases amounts over a five-year period, according to a statement.
The first phase of the battery factory, under construction near Reno, is expected to be completed next year. When the battery factory is fully built out, it will be capable of making 35 gigawatt-hours of battery cells, which is more than all of the current lithium-ion battery plants in the world today combined.
The two companies in partnership with Tesla have rights to land in northern Mexico, where lithium can be obtained from mineral-rich clay, according to the release. The two companies are calling themselves Sonora Lithium Project Partners.
The mine and processing facility are expected to have an initial capacity of 35,000 tons of lithium compounds and could be expanded to 50,000 tons.
Most of the world's supply of lithium comes from South America. While a key component of the battery, other materials like copper, nickel and graphite make up more of the actual material in most lithium-ion batteries.
Credit: By Mike Ramsey
Subject: Lithium; Batteries; Automobile industry
Location: Nevada
Company / organization: Name: Bacanora Minerals Ltd; NAICS: 213114; Name: Rare Earth Metals Corp; NAICS: 212221; Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2015
Publication date: Aug 31, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1708127267
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1708127267?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Opens Ordering Process for New Model X Electric SUV; Silicon Valley auto maker is allowing certain buyers to configure a preordered Model X ahead of delivery
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Sep 2015: n/a.
ProQuest document link
Abstract:
First announced in 2012 , the SUV has flash falcon rear doors and is designed to fit as many as seven passengers.
Full text: Tesla Motors Inc. has opened the ordering process for its new Model X, giving a fresh glimpse of the features buyers can expect on an electric SUV with a top-end price higher than a Porsche 911 street racer.
The Silicon Valley auto maker, currently selling the Model S sedan , is allowing certain buyers to configure a preordered Model X ahead of delivery. First announced in 2012 , the SUV has flash falcon rear doors and is designed to fit as many as seven passengers.
But the package comes at a steep price. The high-end "Signature" model costs $132,000, slightly more than the base price for Porsche AG's 911 GT3. Tesla's SUV, completely battery powered, can travel from 0 to 60 miles per hour in 3.8 seconds, a half-second slower than the Porsche but far quicker than most vehicles on the market.
By adding a $10,000 "Ludicrous Speed Upgrade," the 0-60 mph speed falls to 3.2 seconds. A "Subzero Weather Package" (including a heated steering wheel and washer nozzle heaters) can be added for $1,000, and a towing package runs an additional $750.
Details of other versions of the Model X will be made available at a later date. Less expensive models will be sold, with the base price likely coming close to the $75,000 base price that is charged for a Model S with a 70 kwh battery and all-wheel drive.
Tesla estimates a $7,500 federal tax credit, $10,000 in fuel savings over five years, and state tax credits (which vary), could drop the cost of the Signature version to $112,000.
The Model X's debut is a big milestone for Tesla, which started operating about a decade ago selling an electric roadster. Using much of the same vehicle architecture as the Model S , the X is expected to boost Tesla's volume and help it transition from niche car maker to a player with higher volumes.
Tesla aims to sell between 50,000 to 55,000 vehicles in 2015 , a sharp increase compared with 2014, and is aiming to eventually boost annual global volume to 500,000. Following the Model X launch, attention will turn to the auto maker's planned introduction of the lower-priced Model 3 family of electric cars, due in 2017.
Write to John D. Stoll at john.stoll@wsj.com
Credit: By John D. Stoll
Subject: Automobile industry; Vehicles
Company / organization: Name: Porsche AG; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999
Product name: Porsche 911
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Sep 1, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1708622862
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1708622862?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Beijing Auto Group Opens Center in Silicon Valley; China's state-owned company aims to supercharge electric vehicle push as it looks to compete with Tesla
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Sep 2015: n/a.
ProQuest document link
Abstract:
Faraday Future Inc., a fast-growing electric car company based in the Bay Area, also is expanding rapidly with backing from China's Leshi Internet Information and Technology Co. Last year, Shanghai Automotive Industry Corp., the largest Chinese auto maker, said it would establish a Silicon Valley investment arm aimed at finding advanced technology.
Full text: One of China's prominent domestic auto manufacturers is setting up shop in Silicon Valley, aiming to supercharge its electric vehicle push and investing in a California startup looking to compete with Tesla Motors Inc.
Beijing Automobile Industry Holding Corp., or BAIC, opened a technical center in Northern California shortly before Labor Day, employing a couple dozen people. The Chinese auto maker joins a growing cadre of parts makers and car companies with a Silicon Valley office, a trend fueled by the increasing amount of software, electrification and autonomous features being introduced on vehicles.
BAIC, in a news release issued this week, confirmed it is the largest shareholder in Menlo Park., Calif.-based Atieva Inc., a startup electric car maker led by a former Tesla executive. BAIC and Atieva will release a jointly-developed vehicle in April at an auto show in Beijing.
BAIC's development office is located in Fremont, the same city where Tesla makes the Model S and Model X electric vehicles. It is working from California with a number of production and parts suppliers, including contract manufacturer Foxconn Technology Group, electronics manufacturer Qingdao Tgood Electric Co. and Germany's Siemens AG.
"It's certainly a beachhead," Xavier Mosquet, a Boston Consulting Group automotive analyst said in reference to BAIC's new office in California. "Chinese companies have been very interested in electric vehicles...they are looking [in the U.S.] and particularly in Silicon Valley for the innovations."
The moves represent a significant step for BAIC's ambition to transform from a national player with domestic joint ventures with Daimler AG and Hyundai Motor Co. to a global player capable of standing on its own. The state-owned auto maker plans to research and develop four to six models a year in California, and increase its electric vehicle production to 200,000 by 2020 in China, with 30% being exported.
BAIC currently sells about 1,000 electric vehicles a month, and is one of several domestic and international players--including Tesla--vying for a piece of a growing segment of so-called new-energy vehicles in China. Sales of battery electric vehicles and plug-in hybrids in China grew to about 90,000 units during the first half, a sharp increase vs. the same period in 2014 but still only a fraction of the market.
Although China's patchwork of domestic auto makers have tied up with global giants via government-mandated joint ventures, none have succeeded in penetrating mature markets such as Western Europe or the U.S. Passenger car sales registered a third-consecutive year-over-year decline in August, heightening concerns about a glut of production capacity.
Mr. Mosquet noted Chinese companies haven't had the electric-vehicle breakthroughs they were hoping for, and the global push could better equip them to flourish. BAIC aims to create electric cars capable of achieving distances of between 200 kilometers and 400 kilometers (124 miles to 249 miles) on a charge, allowing it to compete against General Motors Co., Audi AG or Tesla.
Ateiva, BAIC's American partner, is one of several electric car startups with Chinese financial backing. Wanxiang Group, which owns Fisker Automotive, is planning to start building plug-in hybrids in Southern California.
Faraday Future Inc., a fast-growing electric car company based in the Bay Area, also is expanding rapidly with backing from China's Leshi Internet Information and Technology Co. Last year, Shanghai Automotive Industry Corp., the largest Chinese auto maker, said it would establish a Silicon Valley investment arm aimed at finding advanced technology.
Tesla., based in Palo Alto, has lost a number of engineers and other professionals to the startups. Executives at Tesla are planning to talk to Obama administration officials about pressing China to make it easier to do business in China for foreign companies ahead of a planned visit to the U.S. by Chinese President Xi Jinping this month.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Production capacity; Startups; Electric vehicles
Location: China California Northern California Southern California
People: Zetsche, Dieter
Company / organization: Name: Hyundai Motor Co Ltd; NAICS: 336111; Name: Daimler AG; NAICS: 336111; Name: Boston Consulting Group; NAICS: 541611
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Sep 10, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1710701513
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1710701513?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla's Stock Ignores the Competition; Valuation assumes rivals won't gain ground in electric car market
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Sep 2015: n/a.
ProQuest document link
Abstract:
The Chevrolet Volt and Nissan Leaf, for instance, each produced disappointing sales figures in their first several years on the market, due in part to limited driving range.
Full text: The gaudy valuation enjoyed by Tesla Motors is based on an increasingly common product.
Chief Executive Elon Musk last week said the mass-market Model 3 sedan will begin production "in about two years." Priced at about $35,000 before tax credits, it is a key part of Tesla's goal to sell 500,000 cars in 2025 versus about 55,000 this year.
If everything goes according to plan, the Model 3 will help Tesla transition into a mainstream car company that consistently generates free cash flow. Investors need to check their sums, though. Not only aren't the pitfalls to reaching that goal reflected in the share price but, even if everything goes perfectly, the stock looks rich.
Electric-vehicle competition is due to grow sharply in coming years. To be sure, Tesla's cars have been generally very well-received by consumers. Other early iterations of the electric car, in contrast, haven't lived up to expectations. The Chevrolet Volt and Nissan Leaf, for instance, each produced disappointing sales figures in their first several years on the market, due in part to limited driving range.
Despite the troubles, neither General Motors nor Nissan Motor has dropped tools on the project. Nissanannounced on Thursday that the 2016 Leaf will have a driving range of 107 miles, a big improvement from 84 miles for the 2015 model.
It isn't yet known what the Model 3 will offer--Tesla's Model S luxury sedan has a range above 200 miles--but the Leaf also carries a relatively modest price tag of $26,700 after tax credits.
Others are joining Nissan and GM, including Volkswagen, BMW and Mercedes-Benz. Meanwhile, Silicon Valley giants such as Apple or Googlemay have ambitions of entering the passenger-car business.
Tesla itself lays out the challenge in its risk factors section of its latest quarterly filing. "Virtually all of our competitors have more extensive customer bases and broader customer and industry relationships than we do and almost all of these companies have longer operating history and greater name recognition than we do."
Tesla might have added financial strength to its list of disadvantages. Tesla has attempted to shore up its situation--its recent equity issuance raised $738 million in net proceeds. But if its most recent financial results are any indicator, that money won't last all that long. Tesla experienced a free-cash outflow of $1.1 billion in the first six months of 2015.
And risks for the stock abound even if Tesla can conquer the electric-vehicle market. Analysts polled by FactSet project Tesla will generate $18 billion in sales and earn $11.37 per share in 2019. But even that bold consensus view implies a current valuation of more than 21 times 2019 earnings. By contrast, Ford, GM, Toyota Motor, BMW and Volkswagen command an average 2019 multiple a third as high.
Tesla may yet conquer the numerous challenges in its path. But the stock's valuation assumes it will have a clear road to travel. If congestion develops, the stock will have to slow down.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Automobile industry; Valuation
People: Musk, Elon
Company / organization: Name: Nissan Motor Co Ltd; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999; Name: Daimler AG; NAICS: 336111
Product name: Chevrolet Volt
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Sep 11, 2015
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1711104573
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1711104573?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
REVIEW --- The Week -- Game On: Playing for Profit, From Trump to Tesla
Author: Chabris, Christopher
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Sep 2015: C.4.
ProQuest document link
Abstract:
Markers on the board show how the cost of resources changes according to supply and demand, and there are trade-offs galore between buying cheaper but less efficient plants or saving up for higher-tech ones.
Full text: When the Republican candidates debate this Wednesday night, only one of them will hold the distinction of being the subject of a Milton Bradley board game. Published in 1989, Trump: The Game plays like a hyped-up version of Monopoly. The smallest denomination of currency is $10 million; the properties are casinos, airlines and tropical islands; and players compete as business titans, trying to wrangle the best deals.
In Monopoly, which dates from the early 20th century, one player winds up with all the wealth, and the rest go bankrupt. In Trump, the game ends when the players run out of deals to make and have milked as much as they can from their properties. Whoever has the most money wins. As Mr. Trump says on the box, "It's not whether you win or lose. It's whether you win."
When Mr. Trump declared his candidacy this summer, I bought a copy of the original game on eBay (where copies could be had recently for around $30; reviewers say to avoid the simplified, "Apprentice"-themed 2004 reissue). It was surprisingly fun to play, as long as you don't mind seeing the candidate's face on $100 million bills and moving a T-shaped pawn around a black-and-gold board. The experts at BoardGameGeek.com aren't so excited about it: In their ranking of all games, Trump recently placed at No. 10,438 out of 11,199.
With a few exceptions, games based on entertainment franchises or celebrities deserve their bad reputations. Those centered on business and economics, however, are a thriving genre. The designer's challenge is to create a set of rules and game elements that model reality simply enough to constitute a playable board game, realistically enough not to seem arbitrary or annoying, and engagingly enough to hold players' interest. In these respects, Monopoly and Trump have been surpassed by newer games like Power Grid, by Friedemann Friese, and Tesla vs. Edison, by Dirk Knemeyer.
In Power Grid, introduced in 2004 and the No. 12 game on BoardGameGeek.com, players compete to deliver electricity to more cities by building more efficient generating plants and acquiring natural resources to power them. Markers on the board show how the cost of resources changes according to supply and demand, and there are trade-offs galore between buying cheaper but less efficient plants or saving up for higher-tech ones.
Tesla vs. Edison, published just this year, is similarly infused with economic ideas, with some added aspects of invention and finance. The players control companies that are competing to electrify American cities in the late 1800s, but the winner is whoever's stock portfolio is worth the most at the end. You can own stock in your own company or in any of the other players' companies, so forecasting which players will do well and investing in them early is a key skill. Smaller elements of the game add to the realism: You pay royalties to patent holders whenever you decide to use their technology.
As with the best of the new generation of board games, there are random elements in Power Grid and Tesla vs. Edison, but their effect on the game's outcome is subtle. In Monopoly or Trump, a single roll of the dice (or draw of a "Trump Card") can swing fortunes wildly. The former is a classic and the latter is worth a try, but there are many better choices for players looking to do business over the board.
Credit: By Christopher Chabris
Subject: Candidates; Games
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2015
Publication date: Sep 12, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: Featu re
ProQuest document ID: 1711181721
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1711181721?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Porsche Plans a Tesla Rival --- Battery-powered car under consideration can go 0-to-62 mph in just 3.5 seconds
Author: Boston, William
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Sep 2015: B.3.
ProQuest document link
Abstract:
Pricing hasn't yet been determined; a gasoline-powered two-door 911 is priced starting at $84,300 and goes up to $195,000 for a Cabriolet S Turbo in the U.S. Porsche watched closely as BMW AG, the Munich-based luxury car maker, launched its i3 battery-driven compact and i8 plug-in hybrid sports car.
Full text: FRANKFURT -- Porsche, the German sports car maker, on Monday unveiled a prototype battery-driven sports car with which it aims to challenge Tesla Motors Inc., the upstart maker of high-end electric cars whose success has shaken more established car makers.
The new road-hugging design, dubbed "Mission E," is unmistakable as an offspring of Porsche's iconic 911 but carries an 800-volt electric powertrain with 600 horsepower that can accelerate to 100 kilometers per hour (62 mph) in 3.5 seconds.
"When we designed this car, we knew it had to be a real Porsche," Chief Executive Matthias Muller said in an interview on the eve of the Frankfurt Motor Show. "It had to feel like a 911."
Porsche, which is owned by Volkswagen AG, calls Mission E the first four-door battery-driven sports car that is fit for everyday use. The prototype can travel up to 500 kilometers, about 310 miles, on a full charge. It could be recharged to 80% of capacity in about 15 minutes, Mr. Muller said.
A final decision on whether to build the car is expected at the end of the year. If all goes according to plan, Porsche's electric sports car could hit the streets in 2019, executives said.
Porsche rolled out the Mission E at a presentation on the eve of Germany's prestigious biennial car show in Frankfurt. Mr. Muller and his colleagues at Porsche spent months developing the first prototype.
Pricing hasn't yet been determined; a gasoline-powered two-door 911 is priced starting at $84,300 and goes up to $195,000 for a Cabriolet S Turbo in the U.S.
Porsche watched closely as BMW AG, the Munich-based luxury car maker, launched its i3 battery-driven compact and i8 plug-in hybrid sports car. Both received numerous accolades for their innovative design, but have sold far fewer vehicles than expected. BMW's experience reinforced Mr. Muller's cautious approach to electric cars, he said.
"We have mastered the technology," he said. "But there is no point coming out too soon if the market isn't there yet."
But Porsche has realized there also is a danger of waiting too long.
Tesla proved with its Model S that there is a niche market for battery-driven luxury vehicles, even if global demand for electric vehicles has trailed the hype. In March, Mr. Muller appeared reluctant to move forward with the project. But Tesla's continued success and regulatory pressure to cut carbon dioxide emissions forced the company to enter the field.
"We have great respect for Tesla," Mr. Muller said. "They are the only one who have brought an electric vehicle on the market that you have to take seriously."
"We are happy that more companies are deciding to put electric vehicles on the road," said Tesla spokeswoman Khobi Brooklyn.
Luxury car maker Audi, another VW-owned brand, is unveiling at Frankfurt a concept for a battery-driven, midsize sport-utility vehicle -- called the e-tron Quattro. Its first battery-electric car is expected to be released in 2018 as the Audi Q6, and the car would challenge Tesla's Model X SUV, which launches in the U.S. this month.
Over the next few years, Wolfsburg-based Volkswagen plans to release at least 20 battery-driven and plug-in hybrid gasoline-electric vehicles, Volkswagen Chief Executive Officer Martin Winterkorn said on Monday at the Frankfurt presentation.
"No commitment to electro-mobility can be any clearer than that," Mr. Winterkorn said. He urged the German government to introduce incentives to encourage people to buy electric cars, which tend to be more expensive than conventional autos.
Porsche faces another challenge as it moves into electric vehicles.
The company has set itself apart from the competition through what auto analysts call its stunning engine design and engineering.
Electric powertrains are far less complex than a combustion engine, making electric "engines" easier to copy and harder to differentiate.
"This is the question for us: how can we develop an electric vehicle that is different from the competition and adds real value?" asked Mr. Muller. Porsche's challenge, he suggested, is to make an electric engine with the raw power of a gasoline-powered Porsche sports car.
Credit: By William Boston
Subject: Automobile industry; Electric vehicles
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: Porsche AG; NAICS: 336111
Classification: 9175: Western Europe; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2015
Publication date: Sep 15, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1712143811
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1712143811?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Electric-Car Perks Put Norway in a Pinch; Rich subsidies for Nissan and Tesla vehicles are straining the finances of a Norwegian tunnel
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Sep 2015: n/a.
ProQuest document link
Abstract: None available.
Full text: FINNØY, Norway--When Arne Nordbø drove his electric car under the toll gantry and into the mouth of a tunnel leading to this small Norwegian island on a recent Monday, he couldn't repress a chuckle.
"They've just lost another $20," said the Finnøy resident and occasional stand-up comedian.
On the losing side of Mr. Nordbø's commute are local municipalities, including Finnøy, which went into debt to dig the $70 million tunnel but charge no fee on electric cars because of national policies aimed at curbing carbon emissions.
The incentive helped convince many islanders to shift to electric cars. The vehicles now account for about a quarter of tunnel traffic, and allow owners to dodge one of the heaviest toll burdens in the country.
For the Finnøy mayor, however, the math looks awry.
"That doesn't work in the long term," says Gro Skartveit, who doubles as chairwoman of the company operating the tunnel. "We won't be able to pay down the tunnel."
The fast-growing cohort of electric-car drivers--in Finnøy and across the country--is jamming Norway's public finances.
With a set of generous incentives, the Nordic nation has assembled one of the world's largest garages of electric cars. In June, one in five new cars sold in Norway was electric, up from one in eight a year earlier.
Now, authorities are worried the bill is becoming unsustainable. The government estimates it will lose over half a billion dollars in tax revenue on electric cars this year, while free parking and toll exemptions will cost tunnel, ferry and road operators another $40 million.
Norway's dilemma suggests the difficulty ahead for governments when they phase out well-meaning financial incentives--and the ripple effects they cause to electric-car sales.
Christina Bu, secretary-general of the lobbying group Norwegian Electric Vehicle Association, said the 25,000-member association has been stalking political parties and government officials to ensure the main incentives remain in place, at least until 2020.
"If you cut all the incentives overnight, sales will plummet," she said.
Weaning buyers from such purchase incentives could add new headwinds to sales of vehicles already undercut by cheap fuel prices in some markets. In the U.S., the state of Georgia halted its $5,000 tax credit on July 1. Electric cars were about 2% of purchases in the state in 2014, estimates Washington-based think tank Keybridge Research LLC. It forecasts a 90% decline, or 8,700 fewer sales annually, as a result of the loss.
Dave Reichmuth, an engineer with the Union of Concerned Scientists, said "it's a little early to see what the impact of the loss of the [Georgia] incentive and we definitely want to see it come back." Workplace charging stations, access to high-speed highway lanes and price breaks offered by utilities, could help mitigate the loss of tax incentives in the state, he said.
Norway's government said in May it would gradually reduce incentives from 2018.
Electric car makers say they got the message.
"If we didn't have cheaper cars on the market by the time incentives are reduced, we would be hit," said Tesla's Scandinavia spokesman Esben Pedersen. "But prices of electric vehicles are only going down, and Tesla will have a cheaper car on the market by 2017."
Norway began subsidizing electric vehicles in 1991, exempting them from pricey registration taxes. A few years later, the electric-car owners were also exempted from parking and toll-road fees, as the government sought to reward brave souls daring to face traffic and cold weather in locally-made Kewets and Thinks.
Demand for the box-shaped cars remained tepid and the government kept throwing more perks at electric car drivers, including free ferry rides and an exemption from the 25% sales tax.
In Finnøy, where islanders had long nursed the idea of a tunnel link to neighboring Rennesøy and the mainland, construction began in 2006.
Islanders were enthusiastic, according to then mayor Jorunn Strand Vestbø, who said she doesn't recall anyone raising concerns about electric cars. "I guess no one expected the development we've seen recently," she said.
The introduction of better-looking models with longer ranges eventually jolted the market, with Norway's electric-car fleet expanding tenfold to 54,000 units in the last four years. In March 2013, Tesla founder Elon Musk traveled to Norway to thank his customers, saying the country had become "a good example for the rest of the world."
When the Finnøy tunnel opened in 2009, Mr. Nordbø, the occasional stand-up comedian, owned the island's only electric car. Others soon jumped the wagon, saving thousands of dollars in tolls each year. Now, his neighborhood is buzzing with battery-powered Teslas, Kias and Nissans.
Mayor Ms. Skartveit, who drives a gasoline-fueled Mitsubishi Colt, said she has refrained to shift to an electric car herself on fear she would inevitably spark controversy if she benefited from the toll exemption while also heading the tunnel operator.
But the hole in the tunnel's finances kept widening.
In February, she decided to pen a letter to the government, demanding compensation for the losses caused by electric-car incentives.
The government response was blunt: tunnel owners had no legal ground to seek compensation. Ms. Skartveit said that leaves tunnel director with no choice.
"The board has to consider increasing prices this autumn," she said.
Saving another $20 on his second passing through the tunnel in one day, Mr. Nordbø said he intends to enjoy the car perks as long as he can, letting others worry about footing bills.
At the wheel of his Nissan Leaf, he said: "What are they going to do with the tunnel, take it away from us?"
Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com
Credit: By Kjetil Malkenes Hovland
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Sep 18, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1713668362
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1713668362?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Prepares to Launch Electric SUV; Long-delayed Model X has fans charged; fold-down seats may prove a letdown
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Sep 2015: n/a.
ProQuest document link
Abstract:
Audi, owned by embattled German auto maker Volkswagen AG, announced this month it will build an electric luxury SUV in 2018, and other luxury makers are expected to follow in an effort to meet stricter emissions standards.
Full text: Kenneth Adelman has had to learn to be patient.
An electric-car enthusiast and retired "computer geek," in February 2012 he was the first person to plunk down a $40,000 deposit for Tesla Motors Inc.'s Model X sport-utility vehicle. At the time, Mr. Adelman didn't know the Model X's total price, but Chief Executive Elon Musk said the vehicle would be in his hands by the end of 2013.
He is still waiting. After nearly two years' worth of delays, Tesla kicks off Model X deliveries Tuesday. Although first on the order list, Mr. Adelman, 52 years old, doesn't know when he will get his vehicle and he is showing little concern.
"I'm happy to have waited for the X to be all that it could be," Mr. Adelman, who also owns a Tesla Roadster and Model S sedan, said in a recent interview. He is confident the vehicle is a "home run."
Topping out at $132,000, the Model X will test the Silicon Valley electric-vehicle company's ability to preserve momentum that has been largely unaffected by low gasoline prices and turbulence in emerging markets. Tesla is banking on the new vehicle to help it to achieve sales of at least 50,000 vehicle in 2015 and 500,000 by 2020.
Initial demand looks strong. Tesla has booked roughly 30,000 reservations for the vehicle, according to reservation data shared by buyers and on Tesla fan forums. A small number of those have been cancelled, but the order book can be considered hefty when compared with the 21,537 Model S sedans the company sold globally in the first six months of 2015.
Important details remain undisclosed. For instance, the price of the top-end Signature models has been published, but the base price is anyone's guess--the Model S, a sedan with a shared architecture, begins at $75,000. Information on features, such as whether there will be fold-flat second-row seating, will be made public at Tuesday night event hosted by Mr. Musk.
The event opens a roughly two-year window during which Tesla will be the only player in the high-end electric SUV market. Audi, owned by embattled German auto maker Volkswagen AG, announced this month it will build an electric luxury SUV in 2018, and other luxury makers are expected to follow in an effort to meet stricter emissions standards.
The launch isn't the only big project for Tesla, which has consistently burned cash and posted quarterly losses despite consistent revenue growth since its initial public offering in 2010. It aims to open a $5 billion battery factory in Nevada next year.
Electric vehicles have generally lost traction amid low gas prices since late last year, but Tesla remains an outlier. Tom Libby, a senior auto analyst with IHS Automotive, expects the Model X to continue that winning streak because of the segment it will occupy.
"Tesla has this unique design, and it is going right into the heart of the market in terms of body style," Mr. Libby said. "As a pure status symbol I don't know how you get close to this."
But there is still potential for a letdown.
A big selling feature for the Model X is its large storage area and family-friendly size. When Mr. Musk first showed the prototype, he touted the option to fold the second and third rows of seats down to make room. Free of an engine or transmission, it has more interior space than a standard SUV.
But Mr. Musk has talked about the difficulty of designing the second-row seats on several occasions and has hinted that the seats were one reason why the Model X was delayed, leading to speculation the second row may not fold flat based on images the company has shown.
"My expectations are so high that the car has to blow me away," said David Waldman, 41, a business owner near Philadelphia planning on purchasing a Model X. "If it does fold all the way down, I will be much happier, but if it doesn't it will be the first disappointment."
Tesla declined to comment on features ahead of the media unveiling.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Product introduction
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Sep 29, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1717093004
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1717093004?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Tesla to Launch Electric SUV --- Long-delayed Model X has fans charged; fold-down seats may prove a letdown
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Sep 2015: B.6.
ProQuest document link
Abstract:
Audi, owned by embattled German auto maker Volkswagen AG, announced this month it will build an electric luxury SUV in 2018, and other luxury makers are expected to follow in an effort to meet stricter emissions standards.
Full text: Kenneth Adelman has had to learn to be patient.
An electric-car enthusiast and retired "computer geek," in February 2012 he was the first person to plunk down a $40,000 deposit for Tesla Motors Inc.'s Model X sport-utility vehicle. At the time, Mr. Adelman didn't know the Model X's total price, but Chief Executive Elon Musk said the vehicle would be in his hands by the end of 2013.
He is still waiting. After nearly two years' worth of delays, Tesla kicks off Model X deliveries Tuesday. Although first on the order list, Mr. Adelman, 52 years old, doesn't know when he will get his, and he shows little concern.
"I'm happy to have waited for the X to be all that it could be," Mr. Adelman, who also owns a Tesla Roadster and Model S sedan, said in a recent interview. He is confident the vehicle is a "home run."
Topping out at $132,000, the Model X will test the Silicon Valley electric-vehicle company's ability to preserve momentum that has been largely unaffected by low gasoline prices and turbulence in emerging markets. Tesla is banking on the new vehicle to help it to achieve sales of at least 50,000 vehicles in 2015 and 500,000 by 2020.
Initial demand looks strong. Tesla has booked roughly 30,000 reservations for the vehicle, according to reservation data shared by buyers and on Tesla fan forums. A small number of those have been canceled, but the order book can be considered hefty when compared with the 21,537 Model S sedans sold globally in the first six months of 2015.
Important details remain undisclosed. For instance, the price of the top-end Signature models has been published, but the base price is anyone's guess -- the Model S, a sedan with a shared architecture, begins at $75,000. Information on features will be made public at a Tuesday night event hosted by Mr. Musk.
The event opens a roughly two-year window during which Tesla will be the only player in the high-end electric SUV market. Audi, owned by embattled German auto maker Volkswagen AG, announced this month it will build an electric luxury SUV in 2018, and other luxury makers are expected to follow in an effort to meet stricter emissions standards.
The launch isn't the only big project for Tesla, which has consistently burned cash and posted quarterly losses despite consistent revenue growth since its initial public offering in 2010. It aims to open a $5 billion battery factory in Nevada next year.
Electric vehicles have generally lost traction amid low gas prices since late last year, but Tesla remains an outlier. Tom Libby, a senior auto analyst with IHS Automotive, expects the Model X to continue that winning streak because of the segment it will occupy.
"Tesla has this unique design, and it is going right into the heart of the market in terms of body style," Mr. Libby said.
But there is still potential for a letdown.
A big selling feature for the Model X is its large storage area and family-friendly seats in the second and third rows that can fold down. But Mr. Musk has talked about the difficulty of designing the second-row seats on several occasions and has hinted that the seats were one reason why the Model X was delayed, leading to speculation the second row may not fold flat based on images the company has shown.
Tesla declined to comment on features ahead of the event.
Credit: By Mike Ramsey
Subject: Electric vehicles; Automobile industry; Product introduction
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.6
Publication year: 2015
Publication date: Sep 29, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1717166012
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1717166012?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Launches Model X Electric SUV; Elon Musk: 'If we had known the true engineering costs and complexity, we would have done fewer things'
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Sep 2015: n/a.
ProQuest document link
Abstract:
Mr. Musk said he expects the SUV to be the first ever to score a perfect five stars in every category of crash testing, getting a top billing on the rollover test, which most SUVs cannot attain because of their higher center of gravity. Because of the 1,000-pound battery pack on the bottom of the vehicle, it is very difficult to roll over, he said.
Full text: Tesla Motors Inc. Chief Executive Elon Musk has only one regret about the Model X sport utility: The company may have gone a little overboard with pushing the engineering on the electric vehicle, he said at an event Tuesday.
Mr. Musk delivered six Model X sport-utility vehicles to a select group of early investors and board members in front of thousands of Tesla customers and fans late Tuesday evening. He spoke to reporters before the event.
From its unique "falcon wing" doors that feature ultrasonic sensors that tell the doors how close they are to other vehicles, to an enormous windshield that sweeps seamlessly into the roof, to pedestal seats that give more foot room and front doors that open when you walk toward them, the Model X is loaded with engineering feats, he said.
"I think we got a little carried away with the X," he said. "If we had known the true engineering costs and complexity, we would have done fewer things."
Tesla has only just started building the SUV, and Mr. Musk said production now is very slow. He wouldn't make a guess as to how many the company might be able to build this year but said orders placed today for the vehicle would take 8 to 12 months to fill.
Tesla has already lowered its annual sales forecast to a range of 50,000 to 55,000 vehicles. A slow start to production of the X could cause another reduction.
The SUV is Tesla's third product and is important to the company's efforts to make money and grow sales. The SUV took two years longer to produce than originally forecast as the company took on several manufacturing challenges, like building the doors that lift upward from the vehicle. The doors actually sense how close other objects are and can either raise straight up or spread out like wings.
The giant windshield--which allows the driver to look up and see sky--presented manufacturing problems as well. It has layered glass that blocks the sun. And because there is no metal until a third of the way along the roof, the sun visors had to be attached to the side pillars, making them difficult to engineer.
Some of Tesla's customers have been waiting for more than three years, having put down $40,000 to be among the "signature" group that gets the vehicles first. These customers ordered fully loaded vehicles that cost $132,000. There is another, higher-tier version--the "ludicrous" edition of the Model X--that goes from zero to 60 mph in 3.2 seconds. It will cost $142,000.
It also has a HEPA air filter that Mr. Musk said would make the air in the cabin so clean that it actually could filter chemicals from a biological weapon. "Bioweapon defense mode is there, in the HVAC" menu, he said.
Mr. Musk said he expects the SUV to be the first ever to score a perfect five stars in every category of crash testing, getting a top billing on the rollover test, which most SUVs cannot attain because of their higher center of gravity. Because of the 1,000-pound battery pack on the bottom of the vehicle, it is very difficult to roll over, he said.
Tesla hasn't revealed the price of the base model, a 90-kilowatt-hour version with a range of 257 miles. Mr. Musk said the Model X will come with a smaller battery pack than 90 kilowatt-hours, but he declined to say how much smaller. The price of the least expensive Model X will be about $5,000 more than the Model S, which starts at $75,000.
All of the Model X vehicles come standard with all-wheel drive.
Most of the technical features inside the car are the same as those in the Model S, including the 17-inch multimedia screen and the sensors covering the vehicle that will allow for autopilot driving on the highway when that feature is added through a software update in the near future.
Mr. Musk said he expects the Model X to get about half its sales from North America and the remainder from the rest of the world and for the SUV to sell in about the same number as the Model S.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Vehicles
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Sep 30, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1717362350
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1717362350?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Doesn't Have Much Breathing Room; What Tesla didn't say during its Model X unveiling was most important for investors
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Sep 2015: n/a.
ProQuest document link
Abstract:
Tesla Motors' new Model X Signature crossover vehicle will protect its passengers from biological warfare.
Full text: Tesla Motors' new Model X Signature crossover vehicle will protect its passengers from biological warfare. That's great, so long as you don't roll down the window.
And investors might be concerned with some more prosaic risks surrounding the rollout of the Model X.
Tesla unveiled a higher-end version of the Model X which costs $132,000, and delivered a handful of cars on Tuesday evening. Among the unique features on the car is a HEPA air filter.
But it was what Tesla didn't say that might be of more interest to investors. Namely, it didn't give details about the base price of the Model X. Nor did Tesla give an update on when the Model X will be in full production. It was originally slated to roll out in 2013.
This information is important because Tesla is counting on strong Model X sales to reach its guidance of 50,000 to 55,000 vehicle deliveries in 2015.
Tesla already has lowered this guidance once . Any further reductions could cast doubt on the company's ability to achieve scale. Tesla warned in August that a "one-week pushout of this ramp due to an issue at even a single supplier could reduce Model X production by approximately 800 units for the quarter."
For a big car maker, such a small miss wouldn't matter that much. But Tesla, and more importantly its stock, it will. The shares have so far this year outperformed the S&P 500 by about 18 percentage points and it trades at about 150 times forward earnings.
In that sort of rarefied atmosphere, even a small miss could leave investors gasping.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Automobile industry; Investments
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Sep 30, 2015
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1717584371
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1717584371?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Deliveries Rise 49% Without Help From Model X; Elon Musk's electric-car maker sold 11,580 vehicles in the third quarter, up 49% from a year earlier
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Oct 2015: n/a.
ProQuest document link
Abstract:
The auto maker didn't break out sales of the Model X but likely derived almost no benefit in the quarter from the newly released sport-utility vehicle.
Full text: Electric-car maker Tesla Motors Inc. sold 11,580 vehicles in the third quarter, a 49% increase over the same period a year earlier and in line with its August forecast for the period.
The Palo Alto, Calif., company has a goal of delivering between 50,000 and 55,000 this year, a target that would require a surge in output of its $76,000 and up Model S sedans and in Model X SUVs in the current quarter. Through September 30, Tesla has sold 33,117 vehicles this year.
The auto maker didn't break out sales of the Model X but likely derived almost no benefit in the quarter from the newly released sport-utility vehicle. The first six models were delivered to executives and board members on Tuesday night at an event in Fremont, Calif. Initial versions of the car are priced beginning around $132,000. Google Inc. co-founder Sergey Brin and Tesla early investor and board member Steve Jurvetson were among the first to receive the vehicles.
Chief Executive Elon Musk, speaking at the Model X unveiling on Tuesday , said the company was starting very slowly with its production and would ramp up over time. He said the new vehicle was difficult to build because of its oversize panoramic windshield, retractable falcon-wing doors and pedestal second-row seats, all of which are unique in the auto industry.
"It will be real slow for the first several weeks and then shoot up toward the end of the year," he said on Tuesday. He said Tesla has between 20,000 and 25,000 existing reservations for the Model X and that the backlog for delivery now stands at between eight and 12 months.
Many Wall Street analysts already have adjusted their forecasts for the unprofitable company to reflect very few Model X deliveries in 2015.
Any overt difficulties in producing the Model X because of the unique manufacturing challenges related to its special features could lower the company's revenue and cash flow, which it needs to continue financing growth efforts.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Vehicles
Location: Palo Alto California
People: Brin, Sergey Musk, Elon
Company / organization: Name: Google Inc; NAICS: 519130; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Oct 2, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1718532295
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1718532295?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Soon, Power Will Be Delivered to Your Device by Air; Four basic types of technology are vying to achieve Tesla's vision of wireless transmission
Author: Mims, Christopher
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Oct 2015: n/a.
ProQuest document link
Abstract:
Just as exciting is the potential of wireless energy to solve the problem that has always plagued the Internet of things --or the idea that we will cover our entire world in sensors and tiny motors that control devices, leading to "smart" everything.
Full text: In 1902 workers completed a mysterious tower, 187 feet high and shaped like a giant mushroom, on which rested the hopes of one of the 20th century's most prolific geniuses.
Facing the beach in the hamlet of Shoreham, N.Y., on Long Island, the Wardenclyffe Tower was, according to its inventor, Nikola Tesla, the key that could unlock an age of wonders.
As Mr. Tesla later wrote, the tower's ability to transmit information to the far side of the Earth would someday allow the creation of "an inexpensive instrument, not bigger than a watch, [which] will enable its bearer to hear anywhere, on sea or land, music or song however distant."
Sometime in 2016, Tesla's other prediction--that it isn't only possible, but commercially viable, to transmit power as well as information through the air, without wires--is expected to come true.
What is coming are hermetically sealed smartphones and other gadgets that charge without ever plugging into a wall. And soon after there will be sensors, cameras and controllers that can be stuck to any surface, indoors or out, without the need to consider how to connect them to power.
Wireless power will be, in other words, not just a convenience, but a fundamental enabler of whole new platforms.
The players in this field are myriad, but their technology can be boiled down to four basic types.
There are those power mats you may have seen at Starbucks, an older technology that hasn't been widely adopted.
The second, pioneered by the 8-year-old company WiTricity, is slated to show up in Intel-chip-powered laptops sometime in 2016. It uses "magnetic resonance" to efficiently transmit power, over distances ranging from centimeters to a meter.
"It's really charging that Intel notebook as if you'd plugged it in," says WiTricity Chief Executive Alex Gruzen.
But it is the third and fourth kinds of wireless power that are the most intriguing, because they involve beaming power over significant distances.
One, which the startups Energous and Ossia are racing to commercialize, involves transmitting power more or less as Mr. Tesla envisioned--through radio waves.
And the last, pioneered by uBeam, involves transmitting power through sound waves.
The challenge with these approaches isn't technology, but physics. Radio waves, after all, are in the same range as the waves generated by a microwave oven. There's only so much energy you can beam through the air without cooking whatever gets in the way.
Energous CEO Michael Leabman claims his two-year-old company has this problem licked, and not because of breakthroughs in focusing radio waves. The key, experts say, is that mobile devices use less power than ever.
"It's really the chip makers who deserve most of the credit for this stuff," says Gregory Durgin, a Georgia Institute of Technology professor who is an expert on wireless transmission of power. He says the claims that Energous is making for its technology are in line with his own experience.
A typical smartphone might be able to charge quickly from a wall outlet putting out 5 watts, but if you can--as Energous claims--beam up to 2 watts of power over a distance of 10 feet, to a small radio antenna embedded in that phone, you can "trickle charge" it in a matter of hours.
If you think about how much time we typically spend in our offices and homes, this is a perfectly reasonable way to almost guarantee that we'll never have a dead phone again, especially if our devices start charging automatically the moment we walk in the door.
Energous has shown off a workable demo, and Mr. Leabman says the company's technology will be a mass-market product by the end of 2016 or early 2017.
Just as exciting is the potential of wireless energy to solve the problem that has always plagued the Internet of things --or the idea that we will cover our entire world in sensors and tiny motors that control devices, leading to "smart" everything. The hitch is, how to power all those little chips and their electronics, some of which may be as small and thin as a stick-on price tag.
Energous already has a patent on the idea of putting a power transmitter into the base of a light bulb, allowing its technology to cover an entire room, and putting out enough power that a device 15 feet away could absorb one watt.
"Wireless power could enable a whole new class of devices," says Mr. Durgin. Those devices will include sensors on all the mechanics of a home, business or factory; detectors for heat, light and motion; and cameras and controls that we can move and upgrade at our convenience, without ever having to touch the building's wiring.
These controls will include "peel and stick" light switches and thermostats, which are already a common senior design project among Prof. Durgin's students.
Meredith Perry, CEO of uBeam, says that her company's technology will be able to beam more power, via ultrasound waves, over greater distances than what is claimed by companies like Energous, and that uBeam will unveil a working prototype by the end of 2016.
Both of these technologies face major issues. In the case of uBeam, experts I spoke with were skeptical that, based on the physics involved, the company can deliver on its promises.
Moreover, energy transmitted via radio waves represents a major pollution of the bands of unregulated spectrum that already are crowded with everything from microwave ovens to Wi-Fi routers. That could limit the places wireless power can be used.
So it isn't likely that the three-prong outlet will be obsolete anytime soon, but it is likely that in the near future ambient power could be commonplace.
It would be the ultimate vindication of Mr. Tesla, a hundred years after his tower project shut down for lack of funds.
Follow Christopher Mims on Twitter @Mims or write to christopher.mims@wsj.com .
Credit: By Christopher Mims
Subject: Sound; Smartphones
Location: Long Island New York
Company / organization: Name: Intel Corp; NAICS: 334419, 511210, 334210, 334413, 334614; Name: Starbucks Corp; NAICS: 722515
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Oct 5, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1718858981
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1718858981?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla's Model X Mystery; Lowered delivery forecasts dented Tesla's stock. But expectations may still be too high.
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Oct 2015: n/a.
ProQuest document link
Abstract:
Writing on his personal Twitter account Friday night, Tesla chief Elon Musk said a version of the company's Model X car running on a 70 kilowatt-hour battery will be available in "about 12 months."
Full text: Tesla Motorsunveiled its Model X crossover vehicle last week . But it isn't clear when an economically meaningful rollout will occur.
Already, there are signs that forecasts of Model X deliveries are too ambitious. Analysts at Morgan Stanley, who have been bullish on the stock, lowered their delivery forecasts in a note Tuesday, due to average transaction prices that are "easily $10,000-$15,000 higher" than previously expected. Morgan Stanley now expects 20,000 deliveries of Model X in 2016, down from 25,000.
Rollout uncertainty andquestions about the company's ability to come out with lower-price-point versions are bad news for the stock. For its highflying valuation to work, Tesla needs to stay on track with deliveries. After all, this underpins the idea that Tesla can eventually become a mass-market car producer .
Making matters worse, Tesla is adding to uncertainty around the rollout schedule, not clearing the fog.
Writing on his personal Twitter account Friday night, Tesla chief Elon Musk said a version of the company's Model X car running on a 70 kilowatt-hour battery will be available in "about 12 months." The smaller battery, as compared with a 90 kilowatt-hour battery in the recently unveiled model, could help lower the vehicle's price point.
While Tesla hasn't previously given a time frame for a Model X with a smaller battery, the time frame stated by Mr. Musk wouldn't appear to help the company's 2016 delivery prospects. And that tweet apparently has since been deleted.
To meet even reduced estimates for total 2016 deliveries--Morgan Stanley cut its forecast by 10%--Tesla will need the Model X in full production as soon as possible. And with the stock trading at a lofty 94 times forecast 2016 earnings, investors need some hard data, not Twitter mysteries.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Social networks
People: Musk, Elon
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Oct 6, 2015
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1719268607
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1719268607?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
How Tesla Leaves its Rivals Playing Catch Up; European auto makers are under intense public and regulatory pressure to reduce emissions. But when it comes to electric cars, the Big Three German auto makers only wish they could catch the tail of Tesla's rocket
Author: Neil, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Oct 2015: n/a.
ProQuest document link
Abstract:
The German company that has most stepped out of its comfort zone is BMW, with its sustainability project, the i Division, embracing plug-in/EV powertrains as well as pioneering lightweight composite construction. The Mission E also features several human interface technologies--eye-tracking instrumentation, camera-based outside mirrors, gesture and voice recognition--that are expected before the end of the decade.
Full text: When Elon Musk rolled out the new Tesla Model X at the end of September, some grumbled that the Silicon Valley car maker's all-electric luxury crossover was coming to market two years too late. It depends on who you ask. The Big Three German auto makers only wish they could catch the tail of Mr. Musk's rocket.
I'm not talking about units sold, though Tesla's target of 50,000 cars in 2015 is a respectable chunk of the global luxury-sedan market. But Tesla has taken more hide off German prestige and sense of technical primacy. I mean, the Model X was just rubbing their noses in it with those "falcon" doors, right? In executive interviews at the Frankfurt Auto Show any praise of Tesla was guaranteed to land on the table like a paternity suit.
It's ironic: European auto makers are under intense public and regulatory pressure to reduce emissions. Scores of European city centers already have restricted vehicle access; in the next decade European Union fleet carbon emissions will fall potentially to as low as 68 to 78 g/km, about 30% lower than 2005 standards.
The European Automobile Manufacturers' Association, in asking for relief, in June, said "it may not be possible" to meet those standards due to the efficiency limits of traditional technology. To be more direct, the costs of compliance will make internal combustion powertrains uneconomic. I do believe that is the regulator's point.
The events at VW manifest, rather melodramatically, this approaching asymptote, where there is no more blood to be squeezed from the stone. More rigorous emission testing will only hasten the inevitable. The future has a plug. Everybody sees it.
Yet the company furthest down the road of the European vision is American. VW AG has nothing like Tesla's multimodel, vertically integrated electric-car company in the pipeline, much less with its own battery factory. Mercedes-Benz makes a lovely B-class electric car based on Tesla technology; but it has, as yet, no real stick in the EV ground beyond abasing itself to California clean-air authorities. Meanwhile, Mercedes' aero-adaptive Concept IAA, with its nozzle-like appendages, was like something out of Harley Earl's closet.
The German company that has most stepped out of its comfort zone is BMW, with its sustainability project, the i Division, embracing plug-in/EV powertrains as well as pioneering lightweight composite construction. Manhattanites will know those cars: the i3 and the lupine i8 . They really are fantastic automobiles.
But at the moment, the i Division is a 2 billion-euro research project, with no near hope of fiscal lines crossing. The Nissan Leaf , Chevy Volt and Cadillac ELR are the other mass-produced, dedicated plug-in hybrid/EVs. I wonder if any traditional auto maker whose existence does not hang in the balance can ever have enough belly for the EV long game?
Even if the Germans had market-bound EVs in mass quantities, there is the concurrent problem of charging. As the estimable John Voelcker of Green Car Reports notes, the luxury incumbents have no plans to challenge Tesla on charging availability. Tesla has hundreds of charging stations in the U.S. and Europe and plans for hundreds more--all free to owners.
Porsche's show car, the Mission E, tries to cover this bald spot in Porsche's business plan. First, the car: Dead cool, luscious, voluptuous, draped over four mighty wheels, the Mission E offers a beguiling tease of next-generation Panamera styling. One hopes. It also previews Porsche's probable path to an EV supercar, with two ferocious traction motors fore and aft and the slab of lithium-ion battery back lining the floorboards, very like a Model S.
While the Mission E's 0-60 mph is given as 3.5 seconds--not quite as convulsively fast as a Model S in Ludicrous Mode (2.8 seconds)--that's only in a straight line. One need not be A.J. Foyt to appreciate what 600 horsepower, 4 foot-wide meats, a roof height of 1.3 meters, and a center of mass about 6 inches off the ground could do for you, handling wise. The Mission E looks like it will rip some major face off. I am looking forward to it.
The Mission E also features several human interface technologies--eye-tracking instrumentation, camera-based outside mirrors, gesture and voice recognition--that are expected before the end of the decade.
My point is, there is so much promise there. But then the Mission E resorts to jiggery-pokery. The car's 800 Volt system allows superfast charging: 80% capacity in 15 minutes, which pencils out to 250 miles of range. That's a lot better than Tesla. The problem for Porsche is the availability of 800 Volt charging, which as far as I know is none. Will owners keep the chargers at home, next to their industrial welders? Meanwhile, Porsche execs said a Mission E production car couldn't be expected before the decade's end.
Over on the next stand at the Frankfurt show, Audi was proudly displaying its e-tron quattro concept, an EV luxe-truck with three electric motors and a 310-mile range aimed right at the Model X. Built on VW's future-proofed modular architecture, the Q6-sized SUV will be the brand's first mass-production EV. Looks great, sounds promising. Due date: 2018.
I am struck by the lag time. This isn't about profit and loss but industry leadership. The Germans are headed where Tesla already is and, taking Frankfurt as the measure, they are in no great hurry to get there. At least they were not before events of the past month so brightly illuminated the handwriting on the wall.
Credit: By Dan Neil
Subject: Automobile shows; Automobile industry
Location: California
People: Musk, Elon
Company / organization: Name: Daimler AG; NAICS: 336111; Name: European Union; NAICS: 926110, 928120
Product name: Chevrolet Volt
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Oct 8, 2015
column: Rumble Seat
Section: Life
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1720134065
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1720134065?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Runs Into Some Doubters; Several analysts signal concerns about electric-car company's stock
Author: Scholer, Kristen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Oct 2015: n/a.
ProQuest document link
Abstract:
Shares of the electric-car company stumbled nearly 11% this week to $220.69, booking their worst weekly percentage drop in more than a year, after several Wall Street analysts signaled concerns about the stock.
Full text: Wall Street's enthusiasm for Tesla Motors Inc. is waning.
Shares of the electric-car company stumbled nearly 11% this week to $220.69, booking their worst weekly percentage drop in more than a year, after several Wall Street analysts signaled concerns about the stock.
Three analysts cut their price target for Tesla shares and a fourth struck a cautious note as he started coverage of the stock. Meanwhile, famed short seller Jim Chanos said the company, whose vehicles start out at $75,000, is still far from being a mass-market manufacturer.
"In order to sell millions of cars, which is where the stock is valued...they've got a long way to go," Mr. Chanos, the billionaire hedge-fund manager who founded Kynikos Associates, told CNN Thursday. Mr. Chanos, who has voiced concerns about Tesla in the past, said it would take a "lot of capital investment" for the company to reach mass-market status like BMW or General Motors Co.
It's unclear whether Mr. Chanos has a position in Tesla.
A Tesla spokesman declined to comment on its share price or recent remarks by analysts or Mr. Chanos.
Tesla has risen dramatically over the past two years, soaring 557% during 2013 and 2014, well outperforming the S&P 500's 44% gain during the two-year period. But the shares are roughly flat this year.
While demand for Tesla's electric vehicles remains strong, the company has struggled to build them. The slower-than-expected launch of the company's first sports utility vehicle, the Model X, has some worried about Tesla's ability to meet delivery targets as it looks to the planned 2017 launch of its mass-market Model 3.
To be sure, plenty of analysts believe Tesla shares have room to rise. The average price target of Tesla analysts tracked by FactSet is $284.50, 29% above Friday's close.
Still, Wall Street has become increasingly cautious on Tesla as the year has progressed. Of the 21 Tesla analysts followed by FactSet, eight have a positive rating on Tesla shares, seven are neutral and six are bearish. That compares with 14 bulls and one bear at the start of 2015. Six analysts were neutral on Tesla's shares then.
Tesla quieted concerns midyear by raising $750 million through a stock offering, which sent shares to their highest closing price of 2015 in late July. But shares have gradually fallen off as it has become clear that Tesla's fourth-quarter results won't benefit much from the Model X, which was released to select buyers last week after nearly two years of delays.
"Customers are delighted," a Tesla spokesman said in an email Friday.
This week's analyst price cuts started Tuesday, when a noted Tesla bull, Adam Jonas of Morgan Stanley, lowered his price target on the shares to $450 from $465. He said the Model X's "very expensive" price could make 2016 sales targets difficult to reach. A fully loaded Model X, the only version currently available, costs around $132,000.
On Wednesday, Robert W. Baird & Co. analyst Ben Kallo downgraded his rating on the stock to "neutral" from "outperform" and cut his price target on shares to $282 from $335.
On Friday, Brian Johnson of Barclays PLC sliced his rating to "underweight" from "equal weight," saying manufacturing challenges will weigh on gross margins.
Mr. Johnson also trimmed his 12-month price target to $180 from $190, about 18% below where Tesla's stock closed Friday.
Joseph Spak of RBC Capital Markets sounded a skeptical note Tuesday when he initiated coverage of Tesla at a "sector perform" rating and gave it a $280 price target.
"In our minds the story begins to shift from one of opportunity to one of execution and that is not without risk," Mr. Spak wrote.
Mike Ramsey contributed to this article.
Credit: By Kristen Scholer
Subject: Financial performance; Vehicles; Price cuts
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Oct 10, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1720852752
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1720852752?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Runs Into Some Doubters
Author: Scholer, Kristen
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 Oct 2015: B.1.
ProQuest document link
Abstract:
Shares of the electric-car company stumbled about 11% this past week to $220.69, booking their worst weekly percentage drop in more than a year, after several Wall Street analysts signaled concerns about the stock.
Full text: Wall Street's enthusiasm for Tesla Motors Inc. is waning.
Shares of the electric-car company stumbled about 11% this past week to $220.69, booking their worst weekly percentage drop in more than a year, after several Wall Street analysts signaled concerns about the stock.
Three analysts cut their price target for Tesla shares and a fourth struck a cautious note as he started coverage of the stock. Meanwhile, famed short seller Jim Chanos said the company, whose vehicles start out at $75,000, is still far from being a mass-market manufacturer.
"In order to sell millions of cars, which is where the stock is valued . . . they've got a long way to go," Mr. Chanos, the billionaire hedge-fund manager, told CNN Thursday. Mr. Chanos, who has voiced concerns about Tesla in the past, said it would take a "lot of capital investment" for the company to reach mass-market status.
It's unclear whether Mr. Chanos has a position in Tesla.
A Tesla spokesman declined to comment on its share price or recent remarks by analysts or Mr. Chanos.
Tesla has risen dramatically over the past two years, soaring more than five-fold during 2013 and 2014, well outperforming the S&P 500's 44% gain during the two-year period. But the shares are roughly flat this year.
While demand for Tesla's electric vehicles remains strong, the company has struggled to build them. The slower-than-expected launch of the company's first sports utility vehicle, the Model X, has some worried about Tesla's ability to meet delivery targets as it looks to the planned 2017 launch of its mass-market Model 3.
Plenty of analysts believe Tesla shares have room to rise. The average price target of Tesla analysts tracked by FactSet is $284.50, 29% above Friday's close.
Still, Wall Street has become increasingly cautious on Tesla throughout the year. Of the 21 Tesla analysts followed by FactSet, eight have a positive rating on shares, seven are neutral and six are bearish. That compares with 14 bulls and one bear at the start of 2015. Six analysts were neutral on Tesla's shares then.
Tesla quieted concerns midyear by raising $750 million through a stock offering, which sent shares to their highest closing price of 2015 in late July. But shares have gradually fallen off as it has become clear that Tesla's fourth-quarter results won't benefit much from the Model X, which was released to select buyers last week after nearly two years of delays.
"Customers are delighted," a Tesla spokesman said in an email Friday.
This week's analyst price cuts started Tuesday, when a noted Tesla bull, Adam Jonas of Morgan Stanley, lowered his price target on the shares to $450 from $465. He said the Model X's "very expensive" price could make 2016 sales targets difficult to reach. A fully loaded Model X, the only version currently available, costs around $132,000.
On Wednesday, Robert W. Baird & Co. analyst Ben Kallo downgraded his rating on the stock to "neutral" from "outperform" and cut his price target on shares to $282 from $335.
On Friday, Brian Johnson of Barclays PLC sliced his rating to "underweight" from "equal weight" and trimmed his 12-month price target to $180 from $190, saying manufacturing challenges will weigh on gross margins.
Joseph Spak of RBC Capital Markets sounded a skeptical note Tuesday when he initiated coverage of Tesla at a "sector perform" rating and gave it a $280 price target.
"In our minds the story begins to shift from one of opportunity to one of execution and that is not without risk," Mr. Spak wrote.
---
Mike Ramsey contributed to this article.
Credit: By Kristen Scholer
Subject: Financial performance; Vehicles; Price cuts; Stock prices
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Oct 10, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1721317126
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1721317126?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Releasing Autopilot Software for Model S Cars; Electric-car maker's newer models can park themselves, allow limited hands-free operation
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Oct 2015: n/a.
ProQuest document link
Abstract:
California's Department of Motor Vehicles requires special licensing for autonomous vehicles and ranks them in stages; if it is fully autonomous, it needs special license to operate.Tesla didn't contact the California regulator about the new software download, the agency said.
Full text: Tesla Motors Inc. begins distributing on Thursday an advanced set of autonomous driving features that stop short of being a fully driverless system due to regulatory and safety concerns.
Tesla's software, announced earlier this year, will allow hands- and feet-free driving in everything from stop-and-go traffic to highway speeds, and enables a car to park itself. It will be available for 50,000 newer Model S cars world-wide via software download, with owners in the U.S. likely to get the features first.
The Palo Alto, Calif., luxury electric-car maker's software requires a driver to grab the steering wheel every 10 seconds or so to avoid having the vehicle slow.
The restrictions show the balance that auto makers are looking to strike between offering advanced features and staying within licensing regulations. Customers increasingly want high-tech gadgets and safety gear, but most state regulators place limits on who could use those features.
"We're being especially cautious at this early stage," Tesla Chief Executive Elon Musk said on Wednesday. "Over time there will not be a need to have their hands on the wheel," he said, but it is recommended while the feature is in "beta" test.
Tesla has been an auto-industry pioneer in developing over-the-air software updates for its vehicles. Only Teslas built in the past 12 months have the requisite sensors and cameras needed to take advantage of the software.
If the auto maker had not put the check-in feature in place, it likely would have run afoul with regulators in California, the company's largest market. California's Department of Motor Vehicles requires special licensing for autonomous vehicles and ranks them in stages; if it is fully autonomous, it needs special license to operate.Tesla didn't contact the California regulator about the new software download, the agency said. But an official said a check-in feature would likely keep the car under the level where special licensing is required.
Three other states have similar rules.
The auto maker has been testing the autopilot function for months, giving early versions of the software to trusted owners. Mr. Musk has been testing the software regularly in Southern California near his home and said it worked best with a car in front of it and clear lane lines.
He said the next update would include more autonomous features, and in three years Tesla will be capable of building a car "able to take you from point to point, or drive from home to work, without you touching anything."
A recent test ride in highways around Detroit shows a Model S P90D with the features can handle driving in light traffic fairly well. The driver sets a speed through the cruise control and the car will stay in the center of the lane, keeping its distance from a car in front of it or simply driving at the set speed.
Hitting the lane changing signal will cause the car to check if there is a car in the blind spot and then it will switch lanes and accelerate to the set speed. The car also is programmed to understand potentially dangerous curves, like exit ramps, or curves on downslopes, and slow down.
John Leonard, an autonomous vehicle researcher at Massachusetts Institute of Technology, said Tesla's vehicle qualifies as an autonomous car regardless of the check in feature. "If your hands are off the wheel for a sustained amount of time," it is an autonomous car, he said.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Licenses; Vehicles
Location: California United States--US Palo Alto California Southern California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Oct 14, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1722015212
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1722015212?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner . Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Tesla Offers Autopilot Software for Model S
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Oct 2015: B.8.
ProQuest document link
Abstract:
Tesla's software, announced earlier this year, will allow hands- and feet-free driving in everything from stop-and-go traffic to highway speeds, and enables a car to park itself.
Full text: Tesla Motors Inc. begins distributing on Thursday an advanced set of autonomous driving features that stop short of being a fully driverless system due to regulatory and safety concerns.
Tesla's software, announced earlier this year, will allow hands- and feet-free driving in everything from stop-and-go traffic to highway speeds, and enables a car to park itself. It will be available for 50,000 newer Model S cars world-wide via software download.
The Palo Alto, Calif., luxury electric-car maker's software requires a driver to grab the steering wheel every 10 seconds or so to avoid having the vehicle slow.
The restrictions show the balance that auto makers are looking to strike between offering advanced features and staying within licensing regulations. Customers increasingly want high-tech gadgets and safety gear, but most state regulators place limits on who could use those features.
"We're being especially cautious at this early stage," Tesla Chief Executive Elon Musk said. "Over time there will not be a need to have their hands on the wheel," he said, but it is recommended while the feature is in "beta" test.
Tesla has been an auto-industry pioneer in developing over-the-air software updates for its vehicles. Only Teslas built in the past 12 months have the requisite sensors and cameras needed to take advantage of the software.
If the auto maker had not put the check-in feature in place, it likely would have run afoul with regulators in California, the company's largest market. Tesla didn't contact the California regulator about the new software download, the agency said. But an official said a check-in feature would likely keep the car under the level where special licensing is required.
Three other states have similar rules.
The auto maker has been testing the autopilot function for months, giving early versions of the software to trusted owners. Mr. Musk has been testing the software regularly in Southern California near his home and said it worked best with a car in front of it and clear lane lines.
He said the next update would include more autonomous features, and in three years Tesla will be capable of building a car "able to take you from point to point, or drive from home to work, without you touching anything."
John Leonard, an autonomous vehicle researcher at Massachusetts Institute of Technology, said Tesla's vehicle qualifies as an autonomous car regardless of the check in feature. "If your hands are off the wheel for a sustained amount of time," it is an autonomous car, he said.
Credit: By Mike Ramsey
Subject: Automobile industry; Software
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.8
Publication year: 2015
Publication date: Oct 15, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1722091328
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1722091328?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Consumer Reports Pulls Recommendation on Tesla Model S; Shares plunge after owners report numerous reliability issues in a survey
Author: Rogers, Christina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Oct 2015: n/a.
ProQuest document link
Abstract:
Consumer Reports has yanked its recommendation of the Tesla Model S after owners of the plug-in electric luxury car reported reliability problems, a development that dings the Silicon Valley auto maker's reputation for quality.
Full text: Consumer Reports has yanked its recommendation of the Tesla Model S after owners of the plug-in electric luxury car reported reliability problems, a development that dings the Silicon Valley auto maker's reputation for quality.
The move is a surprising turn for the magazine, which until Tuesday had been a strong advocate for the brand. But several problems--ranging from charging problems to leaky sunroofs--led to a reversal and sent Tesla's stock down as much as 11% in afternoon trading.
Tesla stock closed down 6.6% at $213.03 Tuesday, the lowest price at which shares finished a session since April.
Consumer Reports' seal of approval has been a central claim in Tesla's marketing, helping legitimize a product line that uses relatively new battery technology to power electric cars that cost $76,000 and up. In its review earlier this year of Tesla's high-performance P85D version of the Model S sedan, the magazine's editors said the car performed so well that it actually broke its ratings system, achieving 103 points.
Jake Fisher, the magazine's head of auto testing, said Consumer Reports stands by the performance rating and owner satisfaction with the vehicle remains high, but the car's predicted reliability has slipped, falling to below average this year in the magazine's auto reliability survey based on responses from about 1,400 Model S owners.
In a statement, Tesla said the company's close communication with customers allows it to get feedback and resolve problems quickly. "Over-the-air software updates allow Tesla to diagnose and fix most bugs without the need to come in for services," the company said.
Among the complaints to Consumer Reports were problems with body squeaks and rattles, sunroof leaks and the large, iPad-like touch-screen center console freezing. One respondent told Consumer Reports that the car's electric motor had to be replaced.
"This is a great performing vehicle when it is working 100%," Mr. Fisher said. But Tesla over time has added more features and options, making the car more complicated to build and increasing the chances of something going wrong, he said.
As Tesla continues to scale up, adding new models and expanding sales, its reliability could take further hits.
"It's going to be more difficult for them to maintain quality as their whole business model changes," Mr. Fisher said. Consumer Reports released the results of its 2015 Auto Reliability Survey on Tuesday.
Tesla sold over 31,000 Model S cars globally in 2014 and is on track to exceed that number this year, targeting world-wide sales of 55,000. The company doesn't break out U.S.-only sales.
The Palo Alto, Calif., car maker is in the midst of rolling out its first electric sport-utility vehicle, the Model X, and has another, cheaper plug-in car in the works, the Model 3, slated to hit the market in 2017.
Write to Christina Rogers at christina.rogers@wsj.com
Credit: By Christina Rogers
Subject: Automobile industry; Automobile sales
Location: Detroit Michigan
Company / organization: Name: Consumer Reports; NAICS: 511120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Oc t 20, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1723905220
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1723905220?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Aims to Build Its Electric Cars in China; CEO Elon Musk says local production could cut price of its cars by a third in that country
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Oct 2015: n/a.
ProQuest document link
Abstract:
The Wall Street Journal reported in August that Tesla planned to press Obama administration officials to talk to Xi Jinping about making it easier for auto makers to do business in China during the Chinese president's visit to the U.S. last month.
Full text: SHANGHAI--Luxury electric-car maker Tesla Motors Inc. is in discussions with state and national government officials about producing its $76,000 and up vehicles in China, where the government is vigorously promoting reduced-emissions vehicles. The car maker said it hopes to make a definitive announcement resulting from those discussions soon.
Chief Executive Elon Musk said local production could cut sales prices of Tesla cars in China by a third, thanks to reduced shipping costs and avoidance of import duties. He earlier in 2015 told official Xinhua News Agency that Chinese production could be possible "within three years."
Mr. Musk's remarks were made at a forum on Thursday at Tsinghua University in Beijing.
In China, the company's Model S sedan price starts at 673,000 yuan, about $106,000, including duties and other taxes.
Mr. Musk is betting on China's huge demand for electric cars. By 2030, more than half the newly produced vehicles in the world will be battery-powered, and China will take the biggest share, he said, according to a transcript of his speech posted on Tesla's verified Chinese social-media account.
China is the world's largest car market, with nearly 20 million cars sold last year. In the first three quarters of this year China sold 28,092 electric and hybrid plug-in electric vehicles, more than double the year-earlier figure, largely thanks to generous government incentives.
Still, it is far from Beijing's target of half a million such vehicles on the road by the end of 2015 and 10 times that by the end of the decade.
Tesla, which is based in Palo Alto, Calif., may need to find a local partner to begin production. China currently prohibits foreign car makers from assembling vehicles in the local market without a Chinese partner, which can make it much more difficult to operate here.
The Wall Street Journal reported in August that Tesla planned to press Obama administration officials to talk to Xi Jinping about making it easier for auto makers to do business in China during the Chinese president's visit to the U.S. last month.
Tesla also has pledged to modify its vehicles to meet China's charging standards, to allay concerns over technological compatibility there.
China is crucial to fulfill Mr. Musk's ambition, and competition in the electric-car segment here is intensifying. Any news of an uptick in sales would surely be good news for investors given the flood of discouraging developments surrounding the company in recent months.
Tesla currently does most production in California. In Tilburg, The Netherlands, Tesla recently opened a plant to do final assembly of its Model S sedans, with the skeletons of the vehicles arriving from the U.S.
In March, Tesla saidit was cutting jobs in China . The company didn't give details and declined at the time to confirm a Chinese media report that 180 employees would lose their jobs.
In the first three quarters of this year Tesla delivered 3,025 cars to Chinese consumers, according to the company. Mr. Musk had said that he would consider it a success if Tesla were to sell 5,000 vehicles or more in China a year .
Last month, China's central government required local authorities to remove restrictions on electric-car purchases and uses in a bid to boost sales of the vehicles. Metro areas such as Beijing ban cars with odd and even license plates from roads on alternate days, and many cities require would-be car owners to either bid for a license or take part in a lottery for one.
--Rose Yu
Corrections & Amplifications
Tesla Motors is in discussions with Chinese officials about producing its electric vehicles in the country and hopes to make an announcement soon. An earlier version of this article incorrectly said it would begin production in China within two years. (23 Oct. 2015)
Subject: Automobile industry; Automobile sales
Location: China California Beijing China
People: Xi Jinping
Company / organization: Name: Tsinghua University; NAICS: 611310; Name: Xinhua News Agency; NAICS: 519110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Oct 23, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1725499473
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1725499473?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Driver Videos Push Tesla's 'Autopilot' to Its Limits; Operator climbs into the back seat while Model S cruises, another reads a newspaper
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Oct 2015: n/a.
ProQuest document link
Abstract:
The combination of hardware and software, which provides functions such as hands-free cruising on a highway and lane changing, has been available since Oct. 15. Since its introduction, dozens of YouTube videos have appeared with drivers exhibiting inadvisable behaviors--such as reading the newspaper --or illustrating system failures, or capturing a few near-accidents .
Full text: Tesla Motors Inc. bills its new Autopilot system as a safety feature and an important steppingstone to driverless cars. But Model S owners are doing their best to poke holes in that safety claim.
The combination of hardware and software, which provides functions such as hands-free cruising on a highway and lane changing, has been available since Oct. 15. Since its introduction, dozens of YouTube videos have appeared with drivers exhibiting inadvisable behaviors--such as reading the newspaper --or illustrating system failures, or capturing a few near-accidents .
The videos highlight the tension in the auto industry over how fast autonomous vehicle functions should be available in the marketplace. Tesla's Autopilot includes what others call adaptive cruise control, keeping a car in its lane and accelerating and braking by itself so long as there are clear lane lines the system's camera can detect.
But Tesla doesn't market the system as perfect. It says Autopilot can't navigate intersections; won't work well in bad weather or where lane lines are faded; and won't recognize stop signs, lights or even traffic cones. Chief Executive Elon Musk, using the jargon of the software industry, has called the current technology a "beta" version, an unfinished product.
Videos of drivers climbing into the back seat, or reading a newspaper or even Hamlet, while a Tesla barrels down the road show behaviors that push the boundaries of what the system was designed to do, the company says. Tesla has repeatedly discouraged such behaviors and the auto maker installed a "check in" feature designed to keep drivers engaged, requiring hands on the steering wheel a few times every minute. A spokesman says the system is a "hands on" system that requires driver engagement.
Austin Meyer, a 46-year-old South Carolina Tesla owner and creator of two videos of the Autopilot system, describes its software as a "bit before version 1.0," but appreciates Tesla's willingness to offer it and make improvements rather than waiting to advance a technology that could save lives and improve mobility.
Mr. Meyer posted a video of his car's Autopilotfailing to recognize street cones , requiring him to grab the wheel and swerve to avoid them. Another video shows him reading a newspaper that blocks his view of the road while the car drives. Mr. Meyer was driving on a private road with a passenger able to see ahead, he said.
"Do not think for a moment you can take your eyes off the road," he said in an interview. "The most important point we can make right now is that for short-term safety people should assume they are using experimental, beta software."
Other autonomous-car designers and software makers including Google Inc. have ditched efforts to build a vehicle that can go back and forth between human and autonomous control. Google, for instance, said it is waiting until it can offer a car without a steering wheel to entirely eliminate the human factor.
Massachusetts Institute of Technology robotics expert John Leonard said Tesla's Autopilot system is risky because people are treating it as more capable than intended, and even its name gives the impression that it can operate a car autonomously.
"Tesla owners need to stop operating their autopilot systems in conditions that it was not designed for; it's not a toy," he said. "Failure to use good judgment and common sense jeopardizes not only their own lives but the lives of others. Filming themselves while operating the Autopilot is extremely reckless."
Autonomous vehicles hold the promise of increasing mobility for the elderly, disabled or young as well as increasing productivity while in the car. But among the biggest concerns is how to ensure that drivers are ready to take over if the system stops working or encounters a situation it can't handle.
Mr. Musk hopes Tesla's "public beta" test, which could gather up to 1.5 million miles of roadway testing a day--will improve the software capabilities. He said Tesla constantly will be updating the Autopilot system.
Regulators including the U.S. Department of Transportation and California's Department of Motor Vehicles are monitoring the Autopilot's roll out, but the system doesn't violate any rules or safety regulations, they said.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Reading; Video recordings; Automobile safety
People: Musk, Elon
Company / organization: Name: Google Inc; NAICS: 519130; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Oct 25, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1726612588
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1726612588?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Drivers Post Online Videos Pushing Limits of Tesla's 'Autopilot' System
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]26 Oct 2015: B.3.
ProQuest document link
Abstract:
The combination of hardware and software, which provides functions such as hands-free cruising on a highway and lane changing, has been available since Oct. 15. Since its introduction, dozens of YouTube videos have appeared with drivers exhibiting inadvisable behaviors -- such as reading the newspaper -- or illustrating system failures, or capturing a few near-accidents.
Full text: Tesla Motors Inc. bills its new Autopilot system as a safety feature and an important steppingstone to driverless cars. But Model S owners are doing their best to poke holes in that safety claim.
The combination of hardware and software, which provides functions such as hands-free cruising on a highway and lane changing, has been available since Oct. 15. Since its introduction, dozens of YouTube videos have appeared with drivers exhibiting inadvisable behaviors -- such as reading the newspaper -- or illustrating system failures, or capturing a few near-accidents.
The videos highlight the tension in the auto industry over how fast autonomous vehicle functions should be available in the marketplace. Tesla's Autopilot includes what others call adaptive cruise control, keeping a car in its lane and accelerating and braking by itself so long as there are clear lane lines the system's camera can detect.
But Tesla doesn't market the system as perfect. It says Autopilot can't navigate intersections; won't work well in bad weather or where lane lines are faded; and won't recognize stop signs, lights or even traffic cones. Chief Executive Elon Musk, using the jargon of the software industry, has called the current technology a "beta" version, an unfinished product.
Videos of drivers climbing into the back seat, or reading a newspaper, while a Tesla barrels down the road show behaviors that push the boundaries of what the system was designed to do, the company says. Tesla has repeatedly discouraged such behaviors and the auto maker installed a "check in" feature designed to keep drivers engaged, requiring hands on the steering wheel a few times every minute. A spokesman says the system is a "hands on" system that requires driver engagement.
Austin Meyer, a 46-year-old South Carolina Tesla owner and creator of two videos of the Autopilot system, describes its software as a "bit before version 1.0," but appreciates Tesla's willingness to offer it and make improvements rather than waiting to advance a technology that could save lives and improve mobility.
Mr. Meyer posted a video of his car's Autopilot failing to recognize street cones, requiring him to grab the wheel and swerve to avoid them. Another video shows him reading a newspaper that blocks his view of the road while the car drives. Mr. Meyer was driving on a private road with a passenger able to see ahead, he said.
"Do not think for a moment you can take your eyes off the road," he said in an interview. "The most important point we can make right now is that for short-term safety people should assume they are using experimental, beta software."
Other autonomous-car designers and software makers including Google Inc. have ditched efforts to build a vehicle that can go back and forth between human and autonomous control. Google, for instance, said it is waiting until it can offer a car without a steering wheel to entirely eliminate the human factor.
Massachusetts Institute of Technology robotics expert John Leonard said Tesla's Autopilot system is risky because people are treating it as more capable than intended, and even its name gives the impression that it can operate a car autonomously.
"Tesla owners need to stop operating their autopilot systems in conditions that it was not designed for; it's not a toy," he said. "Failure to use good judgment and common sense jeopardizes not only their own lives but the lives of others. Filming themselves while operating the Autopilot is extremely reckless."
Credit: By Mike Ramsey
Subject: Automobile industry; Video recordings; Automobile safety; Autonomous vehicles
People: Musk, Elon
Company / organization: Name: Google Inc; NAICS: 519130; Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2015
Publication date: Oct 26, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1726673674
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1726673674?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Gets Boost From Korean Battery Maker LG Chem; Tesla confirms contract with the LG Electronics affiliate, known for its long-lasting batteries
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Oct 2015: n/a.
ProQuest document link
Abstract:
[...]supply agreement, Panasonic is the largest lithium-ion battery producer for electric cars.
Full text: Tesla Motors Inc. confirmed Wednesday it has a contract with South Korean battery maker LG Chem Ltd. for upgrades to the company's first car, the Roadster, which has since been discontinued.
Earlier this year, Tesla began offering a $29,000 upgrade to original Roadster customers to replace the battery in the vehicle with a new pack and make other improvements. The new pack bumped up the range to around 400 miles, a 35% increase. Those upgrades are continuing today.
Tesla confirmed the contract with the battery maker after Japanese news agency Nihon Keisai Shimbun reported that Tesla officials were negotiating with LG on a battery contract. LG Chem is a battery-making affiliate of LG Electronics Inc. Tesla declined to comment on any current negotiation with the company.
Until this announcement, the only known supplier to Tesla for batteries was Japan's Panasonic Corp., which is codeveloping a $5 billion battery factory outside of Reno, Nev. Panasonic supplies the cells to the Model S sedan and Model X sport-utility vehicle, which just launched production.
Because of that supply agreement, Panasonic is the largest lithium-ion battery producer for electric cars. But LG has been gaining traction .
LG Chem has earned a reputation among car makers for its high-quality materials that have led to long-lasting batteries. LG is supplying batteries to General Motors Co. for its Chevrolet Volt plug-in hybrid, as well as a fully electric car called the Chevrolet Bolt, which is expected to have a 200-mile range and cost $30,000, roughly twice the range of Nissan's Leaf electric car, which starts at $28,600.
LG also has deals with Ford Motor Co., Audi AG and Renault SA. Nissan-Renault Chief Executive Carlos Ghosn has said he believes LG has the best cell available and is evaluating whether to use the battery in forthcoming Nissan electric cars.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Electric vehicles; Batteries
People: Ghosn, Carlos
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Audi AG; NAICS: 336111; Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Panasonic Corp; NAICS: 335222, 335224, 333415; Name: LG Electronics Inc; NAICS: 335221, 335222, 334118; Name: Tesla Motors Inc; NAICS: 336999
Product name: Chevrolet Volt
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Oct 28, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1727533307
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1727533307?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Motors Earnings: What to Watch; Focus will be on Model X deliveries, cash flow
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Oct 2015: n/a.
ProQuest document link
Abstract:
Tesla is expected to post an adjusted net loss of 48 cents a share compared with a 2 cent a share profit in the year earlier quarter as heavy investment spending for the Model X launch and a new battery factory in Nevada outweigh steady revenue increases.
Full text: Tesla Motors Inc.'s third quarter financial results are expected to be released after market close on Nov. 3 with a conference call with investors at 5:30 p.m. EST.
EARNINGS FORECAST: Tesla is expected to post an adjusted net loss of 48 cents a share compared with a 2 cent a share profit in the year earlier quarter as heavy investment spending for the Model X launch and a new battery factory in Nevada outweigh steady revenue increases.
REVENUE FORECAST: Revenues are forecast to rise 36% to $1.26 billion in the third quarter.Deliveries of vehicles rose 49% to 11,580, in line with estimates.
WHAT TO WATCH:
MODEL X: Tesla handed over six Model X sport-utilities on Sept. 29 and very few have been delivered to customers since then. Expect Tesla to give an update on how many vehicles will go to customers in the fourth quarter and for investors to watch that as a litmus test for how much the company has learned about launching new models. Chief Executive Elon Musk has repeatedly talked about how difficult the vehicle is to build, and that may be a concern if the company struggles to ramp up volume. Getting the SUV into consumer's hands is critical if the company hopes to meet its 2015 sales target.
CASH: Tesla raised $750 million in cash over the summer through a share sale, but it has been burning cash at an unsustainable clip due to the high costs of building factories and launching new products. Tesla had forecast it would have positive free cash flow in the fourth quarter, but difficulties launching the new SUV may have spoiled that. Look for Tesla to clarify its financial stability.
CFO: In June, Tesla CFO Deepak Ahuja announced that he was retiring, but would stay on until a replacement was found. A replacement has still not been found.
CHINA: Things may be starting to pick up in China for Tesla in terms of sales and Mr. Musk has been making statements about starting production there. Look for clarity on the status of a potential partnership for manufacturing might be in the world's largest auto market.
GIGAFACTORY: Tesla has said it plans to start cell production early in 2016 in Nevada. To do that, a lot of progress must have been made in the dusty hills outside of Reno. Mr. Musk will be asked when to expect production to come online, and to clarify whether Tesla is seeking new battery making partners outside of Panasonic Corp., such as South Korea's LG Chem. At the same time, updates on the company's new stationary battery business are due.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Financial performance; Factories; Vehicles; Net losses
Location: Nevada
Company / organization: Name: Panasonic Corp; NAICS: 335222, 335224, 333415; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Oct 30, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1728298991
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1728298991?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Soon, Power Will Be Delivered to Your Device by Air; Four basic types of technology are vying to achieve Tesla's vision of wireless transmission
Author: Mims, Christopher
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Oct 2015: n/a.
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Abstract:
Just as exciting is the potential of wireless energy to solve the problem that has always plagued the Internet of Things--or the idea that we will cover our entire world in sensors and tiny motors that control devices, leading to "smart" everything.
Full text: In 1902 workers completed a mysterious tower, 187 feet high and shaped like a giant mushroom, on which rested the hopes of one of the 20th century's most prolific geniuses.
Facing the beach in the hamlet of Shoreham, N.Y., on Long Island, the Wardenclyffe Tower was, according to its inventor, Nikola Tesla, the key that could unlock an age of wonders.
As Mr. Tesla later wrote, the tower's ability to transmit information to the far side of the Earth would someday allow the creation of "an inexpensive instrument, not bigger than a watch, [which] will enable its bearer to hear anywhere, on sea or land, music or song however distant."
Sometime in 2016, Tesla's other prediction--that it isn't only possible, but commercially viable, to transmit power as well as information through the air, without wires--is expected to come true.
What is coming are hermetically sealed smartphones and other gadgets that charge without ever plugging into a wall. And soon after there will be sensors, cameras and controllers that can be stuck to any surface, indoors or out, without the need to consider how to connect them to power.
Wireless power will be, in other words, not just a convenience, but a fundamental enabler of whole new platforms.
The players in this field are myriad, but their technology can be boiled down to four basic types.
There are those power mats you may have seen at Starbucks, an older technology that hasn't been widely adopted.
The second, pioneered by the 8-year-old company WiTricity, is slated to show up in Intel-chip-powered laptops sometime in 2016. It uses "magnetic resonance" to efficiently transmit power, over distances ranging from centimeters to a meter.
"It's really charging that Intel notebook as if you'd plugged it in," says WiTricity Chief Executive Alex Gruzen.
But it is the third and fourth kinds of wireless power that are the most intriguing, because they involve beaming power over significant distances.
One, which the startups Energous and Ossia are racing to commercialize, involves transmitting power more or less as Mr. Tesla envisioned--through radio waves.
And the last, pioneered by uBeam, involves transmitting power through sound waves.
The challenge with these approaches isn't technology, but physics. Radio waves, after all, are in the same range as the waves generated by a microwave oven. There's only so much energy you can beam through the air without cooking whatever gets in the way.
Energous CTO Michael Leabman claims his two-year-old company has this problem licked, and not because of breakthroughs in focusing radio waves. The key, experts say, is that mobile devices use less power than ever.
"It's really the chip makers who deserve most of the credit for this stuff," says Gregory Durgin, a Georgia Institute of Technology professor who is an expert on wireless transmission of power. He says the claims that Energous is making for its technology are in line with his own experience.
A typical smartphone might be able to charge quickly from a wall outlet putting out 5 watts, but if you can--as Energous claims--beam up to 2 watts of power over a distance of 10 feet, to a small radio antenna embedded in that phone, you can "trickle charge" it in a matter of hours.
If you think about how much time we typically spend in our offices and homes, this is a perfectly reasonable way to almost guarantee that we'll never have a dead phone again, especially if our devices start charging automatically the moment we walk in the door.
Energous has shown off a workable demo, and Mr. Leabman says the company's technology will be a mass-market product by the end of 2016 or early 2017.
Just as exciting is the potential of wireless energy to solve the problem that has always plagued the Internet of Things--or the idea that we will cover our entire world in sensors and tiny motors that control devices, leading to "smart" everything. The hitch is, how to power all those little chips and their electronics, some of which may be as small and thin as a stick-on price tag.
Energous already has a patent on the idea of putting a power transmitter into the base of a light bulb, allowing its technology to cover an entire room, and putting out enough power that a device 15 feet away could absorb one watt.
"Wireless power could enable a whole new class of devices," says Mr. Durgin. Those devices will include sensors on all the mechanics of a home, business or factory; detectors for heat, light and motion; and cameras and controls that we can move and upgrade at our convenience, without ever having to touch the building's wiring.
These controls will include "peel and stick" light switches and thermostats, which are already a common senior design project among Prof. Durgin's students.
Meredith Perry, CEO of uBeam, says that her company's technology will be able to beam more power, via ultrasound waves, over greater distances than what is claimed by companies like Energous, and that uBeam will unveil a working prototype by the end of 2016.
Both of these technologies face major issues. In the case of uBeam, experts I spoke with were skeptical that, based on the physics involved, the company can deliver on its promises.
Moreover, energy transmitted via radio waves represents a major pollution of the bands of unregulated spectrum that already are crowded with everything from microwave ovens to Wi-Fi routers. That could limit the places wireless power can be used.
So it isn't likely that the three-prong outlet will be obsolete anytime soon, but it is likely that in the near future ambient power could be commonplace.
It would be the ultimate vindication of Mr. Tesla, a hundred years after his tower project shut down for lack of funds.
Corrections & Amplifications: Michael Leabman is the chief technology officer at startup Energous. An earlier version of this article incorrectly said he was CEO. (10/30/15)
Follow Christopher Mims on Twitter @Mims or write to christopher.mims@wsj.com .
Credit: By Christopher Mims
Subject: Sound; Smartphones
Company / organization: Name: Starbucks Corp; NAICS: 722515
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Oct 30, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1728306252
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1728306252?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Motors Can't Maintain 'Ludicrous' Speed; With skepticism growing, Tesla can still get away with losses. But it will also need to hit delivery targets to keep its ludicrous valuation.
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Nov 2015: n/a.
ProQuest document link
Abstract: None available.
Full text: Its sedan's top acceleration mode isn't the only thing "ludicrous" about Tesla Motors Inc.
Ask many observers, and the company's full-year delivery target of between 50,000 and 55,000 vehicles is starting to look that way. Based on preliminary figures the company released about the third quarter--it unveils complete results Tuesday--it has delivered 33,157 so far in 2015. Tacking on an additional 16,843 to 21,843 seems a tall order given likely teething problems around making its new Model X sport-utility vehicle.
But deliveries for a car with what the company says is a long waiting list are a short-term issue. What matters is the company's ability to eventually make money, and preferably lots of it, to support a nearly $28 billion market value--1½ times that of Fiat Chrysler Automobiles NV with around 1% of its unit sales.
The third quarter of 2015 will likely repeat the same pattern of each reporting period going back as far as the beginning of last year--sharply lowered expectations that the company may or may not clear. Each quarter was seen as profitable a year earlier and the company still hasn't achieved that distinction, except on a pro forma basis. Analysts think Tesla will report a loss of 79 cents a share for the period, under generally accepted accounting principles, compared with a loss of 52 cents in the same period a year earlier.
There are signs that investors and analysts are starting to separate their wonder at Tesla's technical accomplishments and shiny vision of the future from economic reality. A negative assessment of reliability from Consumer Reports last month coincided with a rash of lowered recommendations or target prices for the stock.
Given how much of its market value hinges on its mass-market sedan, which won't even begin to go on sale until 2016, delays of mere thousands of vehicles or quality snafus shouldn't matter much in theory. But they do because they serve as a reality check on extremely ambitious plans in an increasingly competitive electric-vehicle market. For that reason, Tuesday's delivery update could have an outsize impact.
After blinding acceleration, it is time to change gears.
Write to Spencer Jakab at spencer.jakab@wsj.com
Credit: By Spencer Jakab
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Nov 2, 2015
column: Ahead of the Tape
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1728732172
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1728732172?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Loss Widens, but Investors Cheer Sales Outlook; Shares climb more than 10% after hours
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Nov 2015: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc., the maker of luxury electric vehicles, posted a wider loss of $229.9 million in the third quarter as costs to launch the Model X sport-utility late in September led to a 10th-consecutive quarter of red ink.
Full text: Tesla Motors Inc., the maker of luxury electric vehicles, posted a wider loss of $229.9 million in the third quarter as costs to launch the Model X sport-utility late in September led to a 10th-consecutive quarter of red ink.
Despite the loss, which was coupled with heavy cash use of nearly $450 million, investors cheered the results because the Palo Alto, Calif.-based company stuck to its sales-target goals for the year.
Shares climbed sharply after hours, up 11% to $230.28.
Revenue rose 10% to $936.8 million, but heavy development costs offset the benefit of steady volume growth. On an adjusted basis, which accounts for deferred revenue related to vehicles it leases, revenue rose 33% to $1.24 billion, which was slightly below analysts' projections.
Tesla's adjusted operating loss was 58 cents per share, deeper than the 50-cent loss analysts had anticipated. The adjustments account for employee stock grants and deferred revenue for the lease program it uses for many of its sales.
The Model X, the auto maker's second volume vehicle, went on sale late in the quarter and didn't affect the results.
Still, Tesla predicted that it would deliver 17,000 to 19,000 vehicles in the fourth quarter, a good sign that production of the Model X will ramp up significantly and it could still achieve its sales targets for the year. The rate of production and sales of the new model is of great concern because the company already has invested hundreds of millions of dollars in preparing for the launch, and it needs the revenue from sales to pay for its continued growth.
RBC auto analyst Joseph Spak said Tesla's earnings were "not as bad as feared" and that investors liked the auto maker's fourth-quarter forecast for deliveries.
The auto maker cautioned that its unique monopost second-row seats in the Model X might be the biggest threat to meeting sales targets. The company said it brought manufacturing of the seats in-house, a rarity in the auto industry.
Still, the company said it expected to be running its plant in Fremont, Calif., normally by the end of the first quarter of 2016 and that it would be able to produce and deliver 1,600 to 1,800 vehicles a week, or around 90,000 vehicles a year.
Tesla said its revenue was boosted by $39 million from the sale of pollution tax credits and $33 million from selling certified preowned vehicles in the quarter.
Tesla's deliveries rose 49% to 11,603 in the third quarter, putting its annual deliveries through September at 33,140. Tesla has already lowered its sales forecast to 50,000 to 55,000 from 55,000. Tesla's forecast for deliveries puts it at 50,000 to 52,000 in deliveries for the year.
Tesla shored up its cash balance in the quarter with a share sale that netted $750 million. Its cash supply of $1.4 billion is higher than the $1.2 billion it had on hand at the end of June, but considerably lower than the $2.37 billion it held on Sept. 30, 2014. Its cash use mostly went to pay for capital expenses, including the giant battery factory it is building in Nevada. That plant will begin making cells next year.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile sales; Automobile industry; Stock prices; Vehicles; Investments
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Nov 3, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1729158891
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1729158891?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Results: Burning Rubber and Cash; Tesla's third-quarter results offered investors some positive signs. But big negative ones still loom over its route.
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Nov 2015: n/a.
ProQuest document link
Abstract:
[...]quarter revenue came in at $937 million and the company lost $1.78 per share, according to generally accepted accounting principles.
Full text: In an otherwise encouraging earnings report , Tesla Motors reminded investors on Tuesday that profitably scaling the business remains a tough nut to crack.
Third-quarter revenue came in at $937 million and the company lost $1.78 per share, according to generally accepted accounting principles. These figures missed analyst expectations.
The stock shot up in after-hours trading, though. That is because, for Tesla, current results matter less to shareholders than projections. On that front, Tesla scored well: The company maintained the low end of its 2015 vehicle delivery guidance of 50,000 vehicles, a figure the market had been looking at with skepticism. That implies a large increase in fourth-quarter deliveries.
Tesla also affirmed earlier guidance that it expects to produce cars next year at a rate of 1,600 to 1,800 vehicles a week. So investors can cross short-term delivery expectations off their list of worries, for now.
But larger concerns remain. There is growing competition on the electric-car front . And, even if it overcomes this, the more cars Tesla sells, the worse its financial results seem to get. Automotive gross margins dropped to 22.8%; it was 25% in the first quarter. Free cash flow, defined as operating cash flow less capital expenditures, came in at negative $595 million, the worst on record.
Analysts expect a minuscule free-cash outflow in the fourth quarter, and Tesla chief Elon Musk said he aspires to achieve positive cash flow in 2016's first quarter. This would mark a huge improvement, but things are currently pointing in the wrong direction.
That is worrisome given the shares still trade at more than 120 times forward earnings. In coming months, Tesla needs to reverse the worsening trend of negative operating leverage. Otherwise, investors could get a shock.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Financial performance; Cash flow; Vehicles; Investments
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Nov 3, 2015
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1729171143
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1729171143?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Tesla Optimistic on Its Model X Deliveries
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Nov 2015: B.2.
ProQuest document link
Abstract:
Tesla Motors Inc., the maker of luxury electric cars, posted a wider $229.9 million net loss as hefty costs to launch its Model X sport-utility vehicle led to a 10th-consecutive quarter of red ink.
Full text: Tesla Motors Inc., the maker of luxury electric cars, posted a wider $229.9 million net loss as hefty costs to launch its Model X sport-utility vehicle led to a 10th-consecutive quarter of red ink.
The Palo Alto, Calif., auto maker forecast it would deliver between 17,000 and 19,000 vehicles in the current quarter, a signal it expects production of the Model X to accelerate quickly and help it achieve its sales targets for the year.
The Model X production and sales is closely watched because the company already has invested hundreds of millions of dollars in preparing for the launch, and it needs the revenue from sales to pay for its continued growth. Initial versions of the SUV are priced at about $132,000.
Tesla also disclosed former Google Inc. finance executive Jason Wheeler will succeed Deepak Ahuja as its chief financial officer. Tesla also hired Jon McNeill, former chief executive of software maker Enservio Inc., as president of worldwide sales and service.
Revenue in its third quarter rose 10% to $936.8 million. On an adjusted basis, which includes deferred revenue related to vehicle leases, revenue rose 33% to $1.24 billion, which was slightly below analysts' projections.
Tesla's adjusted operating loss was $75 million, or 58 cents a share, greater than the 50-cent-a-share loss analysts had anticipated. The adjustments account for employee stock grants and deferred revenue for the lease program it uses for many of its sales. A year ago it posted a $3 million profit, or 2 cents a share, on the same basis.
Shares rose in after-hours trading after the company affirmed its sales goals for the full year. The stock gained nearly 9% in after-hours trading after dropping $5.44 to $208.35 in 4 p.m. Nasdaq trading.
RBC auto analyst Joseph Spak said Tesla's earnings were "not as bad as feared" and that investors liked the auto maker's fourth-quarter forecast for deliveries.
The auto maker cautioned that its unique second-row seats in the Model X loom as the biggest threat to its sales targets. The seats sit on a sliding single post it calls the monopost. The company said it brought manufacturing of the seats in-house, a rarity in the auto industry.
Tesla's deliveries rose 49% to 11,603 in the third quarter, putting its deliveries this year through September at 33,140 vehicles.
Tesla has already lowered its sales forecast to 50,000 to 55,000 from 55,000. Tesla's forecast for deliveries puts it at 50,000 to 52,000 in deliveries for the year.
Credit: By Mike Ramsey
Subject: Net losses; Automobile industry; Vehicles; Automobile sales; Financial performance; Appointments & personnel changes
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2015
Publication date: Nov 4, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1729239200
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1729239200?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Faraday Future Aims to Take on Tesla Motors With $1 Billion Investment; Startup promises to deliver a long-range, premium electric car in 2017
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Nov 2015: n/a.
ProQuest document link
Abstract:
Even though volumes have steadily grown in recent years, the Palo Alto, Calif., car maker has posted 10-consecutive quarterly losses as a public company and routinely burns through more than $100 million in cash a month, requiring a steady pipeline of new financing.
Full text: Faraday Future Inc., an electric-car startup aiming to take on Tesla Motors Inc., on Thursday said it is considering four states for a $1 billion factory that would begin making its first cars in 2017.
The Gardena, Calif., company launched 18 months ago with private funding, has grown to more than 400 employees. Faraday Future Product Development Chief Nick Sampson said the company is looking at sites in Nevada, Louisiana, Georgia and California for the plant and would announce the site "in the next few weeks."
Mr. Sampson is one of a team of former Tesla executives now leading Faraday Future. Like Tesla, Faraday Future is named after an inventor from the 19th century.
Tesla, more than a decade old, has shown how costly it is to break into the auto industry with electric cars. Even though volumes have steadily grown in recent years, the Palo Alto, Calif., car maker has posted 10-consecutive quarterly losses as a public company and routinely burns through more than $100 million in cash a month, requiring a steady pipeline of new financing.
Faraday Future has recruited personnel from BMW AG and General Motors Co. in addition to Tesla. It has promised to deliver a long-range, premium electric car sometime in 2017 that rivals Tesla's pricey Model S sedan.
The $1 billion investment plan is a significant commitment for a company that is virtually unknown. Faraday declined to say where it is getting the funds to finance the manufacturing plant.
"That sort of an amount is going to come from a different number of sources," said Mr. Sampson, who was the lead chassis engineer for Tesla's Model S before leaving in early 2012. "We are keeping our partners confidential."
The company has been adding dozens of employees every month and is renovating Nissan Motor Co.'s former Southern California sales headquarters as its home location.
Faraday's plan is to break ground on the plant in early 2016 and begin production sometime in 2017. It is considering a rebuild of an existing factory or building a new plant from the ground up. Mr. Sampson said the company has secured parts suppliers and has begun to make purchase orders for components.
Faraday is one of several companies attempting to create an electric car to compete with Tesla. Ateiva Inc., backed by Beijing Automobile Industry Holding Corp. and Leshi Internet & Technology Co., also is developing an electric car in Silicon Valley. It is run by a former a Tesla engineer, Bernard Tse.
Karma Automotive, formerly Fisker Automotive, which is based in Southern California, has revived its hopes after China's Wanxiang Group Corp. bought the failed hybrid-electric supercar maker out of bankruptcy in 2014. The company has secured a manufacturing facility in Southern California and is planning to sell a new car in 2016, according to its Web page.
Faraday was operating under the radar until a few months ago when it announced its intentions. Its first vehicle will have a battery pack that is larger than the one offered on Tesla Model S or Model X and will feature a variety of connected car features. But Mr. Sampson wouldn't elaborate beyond that.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Purchase orders; Product development
Location: California Georgia Louisiana Nevada Southern California
Company / organization: Name: Fisker Automotive Inc; NAICS: 336111; Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Nissan Motor Co Ltd; NAICS: 336111; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Nov 5, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1729771657
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1729771657?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Tesla Rival Plans $1 Billion Plant --- Electric-car startup Faraday Future soon to choose location for its automobile factory
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 Nov 2015: B.6.
ProQuest document link
Abstract:
Pitting the states against one another for the manufacturing site and associated tax incentives or credits "is not unique or unusual," said Stephanie Brinley, a senior automotive analyst with researcher IHS Automotive.
Full text: Faraday Future Inc., an electric-car startup aiming to take on Tesla Motors Inc., on Thursday said it is considering four states for a $1 billion factory that would begin making its first cars in 2017.
Faraday Future Product Development Chief Nick Sampson said the company is looking at sites in Nevada, Louisiana, Georgia and California for the plant and would announce the site "in the next few weeks."
The Gardena, Calif., company -- launched 18 months ago with private funding -- has grown to more than 400 employees. It declined to say where it will get funding for the manufacturing plant.
"That sort of an amount is going to come from a different number of sources," said Mr. Sampson, who was the lead chassis engineer for Tesla's Model S before leaving in early 2012. "We are keeping our partners confidential."
Pitting the states against one another for the manufacturing site and associated tax incentives or credits "is not unique or unusual," said Stephanie Brinley, a senior automotive analyst with researcher IHS Automotive.
Unlike Tesla, which won an up to $1.3 billion package from Nevada for its advanced battery factory, negotiations could be more difficult for Faraday Future because of its lack of a track record.
"The fact they haven't really shared a lot of the details of what they are doing -- the cynic can say it is vaporware," Ms. Brinley said. However, she noted that the company has recruited experienced designers and engineers.
Mr. Sampson is one of several former Tesla executives now at Faraday Future. The company also has recruited personnel from BMW AG and General Motors Co.
Faraday Future, like Tesla, is named after an inventor from the 19th century. It promises a long-range, premium electric car that rivals Tesla's pricey Model S sedan. Its first vehicle is due out in 2017.
Tesla, more than a decade old, has shown how costly it is to break into the auto industry with electric cars. Even though volumes have steadily grown in recent years, the Palo Alto, Calif., car maker has posted 10-consecutive quarterly losses as a public company and routinely burns through more than $100 million in cash a month, requiring a steady pipeline of new financing.
Faraday Future has hired dozens of employees every month and is renovating Nissan Motor Co.'s former Southern California sales headquarters as its home location.
Faraday's plan is to break ground on the plant in early 2016. It is considering refurbishing an existing factory or constructing an entirely new plant from the ground up. Mr. Sampson said the company has relationships with parts suppliers and has begun to make purchase orders for components.
Faraday is one of several companies designing electric cars to compete with Tesla. Atieva Inc., backed by Beijing Automobile Industry Holding Corp. and Leshi Internet & Technology Co., also is developing an electric car in Silicon Valley. It is run by former Tesla engineer Bernard Tse.
Karma Automotive, formerly Fisker Automotive, which also is based in Southern California, has revived its hopes after China's Wanxiang Group Corp. bought the failed hybrid-electric supercar maker out of bankruptcy in 2014. The company has a plant in Southern California and is planning to sell a new car in 2016, according to its Web page.
Faraday was operating under the radar until a few months ago. Its first vehicle will have a battery pack that is larger than that offered on Tesla's Model S or Model X and will feature a variety of connected car features. Mr. Sampson declined to elaborate beyond that description.
Credit: By Mike Ramsey
Subject: Automobile industry; Tax incentives; Factories; Competition; Electric vehicles
Location: California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: Faraday Future Inc; NAICS: 336111
Classification: 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.6
Publication year: 2015
Publication date: Nov 6, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1730554649
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1730554649?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
China Auto Giant's Tesla Dreams Are Hard to Fathom
Author: Bhattacharya, Abheek
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Nov 2015: n/a.
ProQuest document link
Abstract:
Why don't these shareholders mind getting diluted? SAIC will start an employee stock ownership plan, with about 8% of the new shares going to that.
Full text: For any Chinese company wondering how to make its stock go up after diluting shareholders, the country's largest car maker has a plan. Promise adherence to one of the nation's policy nostrums of the time--or, in this case, two.
The Shanghai-listed shares of state-run SAIC Motor, the local partner for General Motors and Volkswagen, leapt 10% Friday, the daily limit for mainland Chinese stocks. Partly the shares, which have been suspended for a month, are catching up to the rise in the broader Shanghai markets. But there is also the news that the company would issue $2.3 billion of new shares that dilute existing owners by 8%, calculates Jefferies.
Why don't these shareholders mind getting diluted? SAIC will start an employee stock ownership plan, with about 8% of the new shares going to that. In China, such plans have become synonymous with reform of state-controlled enterprises, inspiring a rally earlier this year in the shares of Chongqing Changan Automobile, Ford's local partner.
The theory is that with shares in their pockets, management's incentives might become better aligned with minority shareholders'. Yet the Shanghai local government that runs SAIC Motor remains in control, meaning in practice cues from the state may outweigh those from investors.
The plan should also please China's stock market bailout managers, since it forbids employees from selling shares for up to three years. Other new investors are locked in for a year.
The second excitement is that SAIC has earmarked the new capital to give itself some Tesla Motors magic. More than half of the $2.3 billion will go to build electric and hybrid car vehicles, as well as auto finance and, curiously, cloud computing. The going green part shows SAIC toeing the line with antipollution goals touted in China's recently outlined 13th Five Year Plan.
But investors shouldn't be so excited. SAIC is hardly alone in rushing to launch electrics and hybrids and anything to come out of these investments will take years. And there is a good chance Chinese consumers will prefer foreign electric-car technology over indigenous ones, just as they currently do for gasoline-powered cars.
SAIC's ventures with GM and Volkswagenare its main sources of profit and stand to benefit from China's cut in the car-sales tax last year. This is more or less priced in at 7.1 times forward earnings, which puts SAIC smack in the middle of peers. Skeptical investors should see the capital raise, and the electric vehicle dreams, as cause to distance themselves from SAIC, not draw closer.
Write to Abheek Bhattacharya at abheek.bhattacharya@wsj.com
Credit: By Abheek Bhattacharya
Subject: Employee stock ownership plans--ESOP; Investments; Automobile industry; Five year plans
Location: China
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: SAIC Motor Corp Ltd; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Nov 6, 2015
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1730617159
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1730617159?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
China Auto Giant's Tesla Dreams Are Hard to Fathom
Author: Bhattacharya, Abheek
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Nov 2015: n/a.
ProQuest document link
Abstract:
Why don't these shareholders mind getting diluted? SAIC will start an employee stock ownership plan, with about 8% of the new shares going to that.
Full text: For any Chinese company wondering how to make its stock go up after diluting shareholders, the country's largest car maker has a plan. Promise adherence to one of the nation's policy nostrums of the time--or, in this case, two.
The Shanghai-listed shares of state-run SAIC Motor, the local partner for General Motors and Volkswagen, leapt 10% Friday, the daily limit for mainland Chinese stocks. Partly the shares, which have been suspended for a month, are catching up to the rise in the broader Shanghai markets. But there is also the news that the company would issue $2.3 billion of new shares that dilute existing owners by 8%, calculates Jefferies.
Why don't these shareholders mind getting diluted? SAIC will start an employee stock ownership plan, with about 8% of the new shares going to that. In China, such plans have become synonymous with reform of state-controlled enterprises, inspiring a rally earlier this year in the shares of Chongqing Changan Automobile, Ford's local partner.
The theory is that with shares in their pockets, management's incentives might become better aligned with minority shareholders'. Yet the Shanghai local government that runs SAIC Motor remains in control, meaning in practice cues from the state may outweigh those from investors.
The plan should also please China's stock market bailout managers, since it forbids employees from selling shares for up to three years. Other new investors are locked in for a year.
The second excitement is that SAIC has earmarked the new capital to give itself some Tesla Motors magic. More than half of the $2.3 billion will go to build electric and hybrid car vehicles, as well as auto finance and, curiously, cloud computing. The going green part shows SAIC toeing the line with antipollution goals touted in China's recently outlined 13th Five Year Plan.
But investors shouldn't be so excited. SAIC is hardly alone in rushing to launch electrics and hybrids and anything to come out of these investments will take years. And there is a good chance Chinese consumers will prefer foreign electric-car technology over indigenous ones, just as they currently do for gasoline-powered cars.
SAIC's ventures with GM and Volkswagenare its main sources of profit and stand to benefit from China's cut in the car-sales tax last year. This is more or less priced in at 7.1 times forward earnings, which puts SAIC smack in the middle of peers. Skeptical investors should see the capital raise, and the electric vehicle dreams, as cause to distance themselves from SAIC, not draw closer.
Write to Abheek Bhattacharya at abheek.bhattacharya@wsj.com
Credit: By Abheek Bhattacharya
Subject: Employee stock ownership plans--ESOP; Investments; Automobile industry; Five year plans
Location: China
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: SAIC Motor Corp Ltd; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Nov 9, 2015
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1731711840
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1731711840?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Hong Kong Regulators Stall Tesla's New Features; Transport department asks auto maker to stop releasing advanced driver assistance systems
Author: Ramsey, Mike; Gonzalez, Miguel, Jr
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Nov 2015: n/a.
ProQuest document link
Abstract:
Tesla's technology raised eyebrows in the U.S. after videos appeared online featuring people operating the Model S without their hands even after the auto maker advised against it.
Full text: Hong Kong regulators are blocking semiautonomous driving technology from hitting the road, requiring Tesla Motors Inc. to remove features that let its cars steer and change lanes without driver intervention.
The city's Transport Department said Tesla's Autopilot features, downloaded via an Internet connection to its electric cars, may not meet regulations and need regulatory approval before being deployed. It called on Tesla to stop releasing the system and restore the original software on local vehicles so that the functions aren't available.
"Although vehicles may be equipped with advanced driver assistance systems, the roads in Hong Kong are extremely busy, and motorists should stay alert [and] maintain control of the vehicle," the agency said in a warning to Tesla Model S owners.
The company said it sent letters to affected owners and is working with the department to gain needed approvals.
Many car makers offer features designed to enable cars to take over critical functions from drivers to enhance safety. Regulators world-wide have been working to establish rules that address these features as they become increasingly sophisticated and require less driver intervention, but those efforts are slow moving.
Tesla has been among the most aggressive of the auto companies in releasing these features. Its 17-inch touch-screen dashboard display, for instance, allows unfettered use of the Internet while driving. That online feature was released despite recommendations from U.S. regulators that discourage such functionality because of driver-distraction concerns.
The Autopilot feature that Hong Kong officials are testing has been called a "public beta" by Tesla Chief Executive Elon Musk. Downloaded to 50,000 owners in October, the auto-steering and lane-changing features are being refined by Tesla as drivers use them.
Tesla's technology raised eyebrows in the U.S. after videos appeared online featuring people operating the Model S without their hands even after the auto maker advised against it. Mr. Musk has said Tesla may alter the system to prevent drivers from operating their vehicles in an overtly risky manner.
While it didn't face regulatory hurdles in the U. S.--where rule-making on these features has been organized by individual states--Tesla did gain regulatory approval in Europe before allowing downloads. Japanese officials haven't approved the new features.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey and Miguel Gonzalez Jr.
Subject: Automobile industry; Vehicles; Automobile drivers
Location: United States--US Hong Kong
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Nov 19, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1734321608
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1734321608?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Hong Kong Stalls Tesla's Autopilot --- Regulators want the auto maker to remove semiautonomous technology from its cars
Author: Ramsey, Mike; Gonzalez, Miguel, Jr
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Nov 2015: B.7.
ProQuest document link
Abstract:
Tesla's technology raised eyebrows in the U.S. after videos appeared online featuring people operating the Model S without their handseven after the auto maker advised against it.
Full text: Hong Kong regulators are blocking semiautonomous driving technology from hitting the road, requiring Tesla Motors Inc. to remove features that let its cars steer and change lanes without driver intervention.
The city's Transport Department said Tesla's Autopilot features, downloaded via an Internet connection to its electric cars, may not meet regulations and need regulatory approval before being deployed. It called on Tesla to stop releasing the system and restore the original software on local vehicles so that the functions aren't available.
"Although vehicles may be equipped with advanced driver assistance systems, the roads in Hong Kong are extremely busy, and motorists should stay alert [and]maintain control of the vehicle," the agency said in a warning to Tesla Model S owners.
The companysaid it sent letters to affected owners andis working with the department to gain needed approvals.
Many car makers offer features designed to enable cars to take over critical functions from drivers to enhance safety. Regulators world-wide have been working to establish rules that address these features as they become increasingly sophisticated and require less driver intervention, but those efforts are slow moving.
Tesla has been among the most aggressive of the auto companies in releasing these features. Its 17-inch touch-screen dashboard display, for instance, allows unfettered use of the Internet while driving. That online feature was released despite recommendations from U.S. regulators that discourage such functionality because of driver-distraction concerns.
The Autopilot feature that Hong Kong officials are testing has been called a "public beta" by Tesla Chief Executive Elon Musk. Downloaded to 50,000 owners in October, the auto-steering and lane-changing features are being refined by Tesla as drivers use them.
Tesla's technology raised eyebrows in the U.S. after videos appeared online featuring people operating the Model S without their handseven after the auto maker advised against it. Mr. Musk has said Tesla may alter the system to prevent drivers from operating their vehicles in an overtly risky manner.
While it didn't face regulatory hurdles in the U. S.-- where rule-making on these features has been organized by individual states -- Tesla did gain regulatory approval in Europe before allowing downloads. Japanese officials haven't approved the new features.
Credit: By Mike Ramsey and Miguel Gonzalez Jr.
Subject: Vehicles; Automobile driving; Automation; Automobile industry
Location: Hong Kong
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 9179: Asia & the Pacific
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.7
Publication year: 2015
Publication date: Nov 20, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1734592335
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1734592335?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Sets $81,200 Price for Base Model X SUV; Delivery will take about a year for customers who order the vehicle now
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Nov 2015: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. set a price of $81,200 for its base Model X sport-utility vehicle and told customers who order it now it will be delivered in about a year.
Full text: Tesla Motors Inc. set a price of $81,200 for its base Model X sport-utility vehicle and told customers who order it now it will be delivered in about a year.
Tesla began delivering its third production vehicle in late September and has slowly been making deliveries of vehicles that are fully optioned out and start at $132,000. Most people who reserved these early models have had reservations for several years.
Tesla's base model is called Model X 70D and it has a range of 220 miles on a charge. The longer-range version of the vehicle is called the 90D, which has a 257-mile range on a charge. Tesla says the 90D won't be delivered until the middle of 2016 and the more expensive P90D, which is faster than the others, would be delivered as soon as early in 2016.
The 90D starts at $96,700 and P90D starts at $116,700. All prices include the delivery charge.
Tesla is front loading deliveries of high-profit models as it seeks to become cash-flow positive in the first quarter of 2016. Tesla burned through more than $400 million in cash each quarter of 2015 as it invested in new production capabilities and its battery factory in Nevada.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Nov 24, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1735474746
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1735474746?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
The Future of Everything; The Race to Create Elon Musk's Hyperloop Heats Up; Two years after the Tesla CEO crowdsourced the idea for the Hyperloop, his dream of a 'fifth mode' of transportation is quickly and quietly becoming a reality, but what's his endgame?
Author: Alexander Chee | Photographs by Spencer Lowell for
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Nov 2015: n/a.
ProQuest document link
Abstract:
California's proposal for a high-speed rail project had offended Musk's sense of the state that has historically dreamed up America's future. After skewering the proposed system ("one of the most expensive per mile and one of the slowest in the world"), Musk issued an open-source design challenge: a 28-passenger solar-powered pod capable of levitating through a system of tubes almost at the speed of sound, with a one-way ticket price of $20 and a total building cost estimated at $6 billion, less than a tenth of the budget for California's high-speed rail project.
Full text: THERE'S A FUTURE we've seen in science fiction for so long it almost seems like the past: people whisked from one place to another inside tube trains that crisscross the landscape.
But imagine you could board one and travel from Los Angeles to San Francisco in a half-hour. As you sit down in an engineless pod the size of a bus, your seat remembers you and adjusts the entertainment settings. The pod accelerates to 760 miles per hour, a velocity made possible by the near-vacuum inside the tube. There's no engine noise--the nearest thing to an engine is the tube, a smart tube that measures speed and location. The pod has been pressurized to minimize the G forces' effects on a passenger; the trip is as comfortable as a flight. All of this is solar-powered.
There won't even be time for beverage service.
This is the dream billionaire inventor Elon Musk unleashed on Aug. 12, 2013, when he posted a white paper on the website of Space Exploration Technologies Corp., also known as SpaceX . Titled "Hyperloop Alpha," the paper contained notes toward what Musk called the fifth mode of transport--the other four being planes, trains, automobiles and boats. California's proposal for a high-speed rail project had offended Musk's sense of the state that has historically dreamed up America's future. After skewering the proposed system ("one of the most expensive per mile and one of the slowest in the world"), Musk issued an open-source design challenge: a 28-passenger solar-powered pod capable of levitating through a system of tubes almost at the speed of sound, with a one-way ticket price of $20 and a total building cost estimated at $6 billion, less than a tenth of the budget for California's high-speed rail project.
Reactions at the time ranged from excitement to skepticism to outright disbelief--Musk was even accused of sabotaging the high-speed rail project for profit, despite his statement that he had no plans to develop the Hyperloop commercially. Musk stepped back, essentially giving the field to the host of students, engineers and entrepreneurs who almost immediately answered the challenge. Musk spent the next two years tweeting support for any opensource Hyperloop developments. He remains close to members of both startups currently in the lead to produce the first working Hyperloop--Hyperloop Transportation Technologies, or HTT, and Hyperloop Technologies Inc., or HTI. But on Jan. 15th of this year, Musk shook up the field when he announced plans to build a Hyperloop test track and hold a contest in summer 2016 at SpaceX headquarters in Hawthorne, Calif. The challenge? Create a functioning, half-scale pod. Specs for the test track's tube were released in October, and in November, 318 teams from 162 universities and 16 countries submitted their final pod designs. U.S. Secretary of Transportation Anthony Foxx will be the keynote speaker at the first event, a Hyperloop design weekend for the finalists at Texas A&M University on January 13th, 2016.
Why would Elon Musk open-source an idea this valuable, while also leaving the door open to step in himself? Musk was unavailable for comment but his position hasn't changed since he published Hyperloop Alpha: He's busy. In addition to being the CEO and chief technology officer of SpaceX, he is also the CEO of Tesla Motors and chairman of the board at SolarCity, a company founded by his cousins in 2006 with an idea of his and his blessing. Historically, Musk stays close to the ideas he gives away and it's rumored that he will at some point choose one Hyperloop startup or another, and back it by lending his name and joining the board. But Musk is unwilling to be portrayed as having a favorite.
For now Elon Musk, it seems, is calling his invention home to see what it's become. In the process, he's joining what may become the biggest tech free-for-all in American history--one he started. But not all of those interested in making the Hyperloop work are answering the contest's call. The Hyperloop Movement, as some of its unaffiliated members refer to themselves, is officially bigger than the man who started it.
IN HIS SANTA MONICA CONFERENCE ROOM, Quay Hays of GROW Holdings is laying out the plan for Quay Valley, the city he hopes will be a model for California's future. It sounds, at first, like any other affluent California community: retail space, resort hotels, a winery, a spa. Where Quay Valley stands out is its plan to be solar-powered with extremely low water use. With a town of 26,000 networked smart homes and apartments built green from the ground up, Hays hopes to give 75,000 residents the eco-friendly lifestyle that critics of clean energy say is impossible. "There have been advances in green design and smart growth over the years, and the idea was, put all these things together in one place," says Hays, a former publisher and film executive whose first job was booking punk and new wave acts for the Greek Theatre in the 1980s. His first attempt to launch Quay Valley was thwarted by litigation over water rights and the financial crisis of 2008; the new plan is to break ground on the site, a 7,200-acre expanse halfway between Los Angeles and San Francisco, sometime in 2016. When that happens, the world will be watching, and not just for the promised sustainability--Quay Valley also plans to feature the world's first working Hyperloop, built by Hyperloop Transportation Technologies at an estimated cost of $100 million to $150 million.
Dirk Ahlborn, HTT's chief executive, wants little to do with the SpaceX contest. Ahlborn founded HTT three months after Musk's "Hyperloop Alpha" paper hit the Internet, and while he maintains a friendly relationship with Musk, he calls the contest a distraction. "A half-scale model is of no use to us now, and so their specs are also not relevant to us," Ahlborn says. His company is focused on Quay Valley. "We are past the prototyping phase and have developed our own proprietary technology," Ahlborn tells me. "I know you need to portray this as a race, but I don't see it as a race. We're not competing with them. Our competitors are other forms of transportation. If it were a race, it would be over."
A German-born entrepreneur, Ahlborn made a small fortune founding alternative energy companies in Italy, moved to the U.S., and lost that fortune shortly after. At one point, he found himself waiting tables to make ends meet while pursuing another startup. He took a lesson in unreliability from that tumble, and in 2012 he founded JumpStart Fund, an online startup incubator that uses a crowd-sourcing tech-hub model. It's the model used by HTT, a scrappy, fast-growing operation of just under 500 people who initially earn only equity in exchange for at least 10 hours a week, leaving them free to hold down day jobs. HTT has been characterized as "the Bad News Bears" of the Hyperloop movement, but Ahlborn has pulled off a string of increasingly impressive partnerships. In 2013, HTT partnered with the engineering software developer Ansys, which ran simulation models for the fluid dynamics of the Hyperloop. In 2014, HTT teamed up with UCLA's Suprastudio master's in architecture program, which designed the "human factor" of the HTT user experience, from pods to station architecture to boarding and ticketing. In August of this year, HTT announced partnerships with international engineering giant Aecom and Oerlikon, the world's oldest vacuum technology--signs the company may be looking to expand beyond Quay Valley. HTT also began the permitting process in Kings County, Calif., where Quay Valley will be located; these will be the first permits ever issued for a Hyperloop. Designed to carry both people and freight, The Quay Valley Hyperloop has a projected top speed of more than 300 mph, significantly slower than Musk's dream train. But the short track will demonstrate the potential of smaller suburban Hyperloops--a necessary early step. And it's designed to create more energy than it uses, thanks to a mix of solar cells along the tubes, wind turbines along the supporting pylons and kinetic energy generated by the braking process. HTT plans to sell this energy back to the grid, creating a mass-transit system that's also a power company. Ahlborn declined to offer any specifics on the technology, but officials at both Aecom and Oerlikon said they had vigorously vetted HTT's plans before approving their partnerships, and they are now actively involved in all development.
Though HTT and Quay Valley seem poised to win the Hyperloop race, Quay Hays sees it differently. "Why does there have to be just one Hyperloop company?" he asks. "Why can't there be many?"
HTT IS OFTEN CONFUSED WITH ITS MOST VISIBLE COMPETITOR, HTI, which is a source of frustration for Ahlborn; HTI was formed eight months after HTT. "They're pretty smart people," Ahlborn says. "They could have called it something else."
Both points are inarguable. HTI was founded by Shervin Pishevar of Sherpa Ventures, a close friend of Musk and early investor in Uber. His co-founder, engineer Brogan BamBrogan, formerly of SpaceX, is now HTI's chief technology officer. "I went to Shervin's place in Napa prepared to say no," says BamBrogan, laughing. "But his plans for Hyperloop--Hyperloops underwater!--blew me away." The company's board is something of a Silicon Valley fantasy-football team: David O. Sacks, Jim Messina, Peter Diamandis, Joe Lonsdale--and most recently Emily White, the former chief operating officer of Snapchat.
In June, Pishevar found his CEO in Rob Lloyd, the former co-president of Cisco. Lloyd had spent 20 years building the infrastructure for the World Wide Web, eventually leading a team of 25,000 engineers around the globe. He left Cisco shortly after being passed over for CEO. Lloyd, who was once told that no one would ever pay bills online, feels uniquely suited to run a company like HTI, whose product inspires disbelief. When Pishevar described his idea for a network of tubes crisscrossing the country and the world, Lloyd saw his work on the Internet's infrastructure as a map to this fifth mode of transportation. "With information moving faster," Lloyd says, "things have to move faster, too. It's like the pattern of moving a digital bit, applied to a physical bit." Freight at--or closer to--the speed of information. A literal Internet of things.
HTI is raising $80 million for its next round of expansion. Pishevar, Lloyd and BamBrogan now regularly speak about what they call the Hyperloop's Kitty Hawk moment: when the first working pod shoots down a full-size tube. HTI recently formed a relationship with the developer of a high-speed rail project from Los Angeles to Las Vegas. That company, China Railway International USA, is a partnership between the Chinese government's railway company and XpressWest, a private American venture. Vegas, then, could be HTI's Kitty Hawk. And given the players involved, it's also an entry point to the potentially enormous Chinese market.
If both HTT's and HTI's Hyperloops are successful, Quay Hays's notion of multiple Hyperloop companies could come true, potentially leaving us with a national version of the New York City subway system, built in the early 1900s by two competing private developers, who each used different train cars. To this day, the Metropolitan Transportation Authority is forced to buy two different types of subway car. A national network of Hyperloops could be stymied if pods are unable to cross from one system of tubes to another, potentially sabotaging the game-changing efficiency that Elon Musk imagined in Hyperloop Alpha. But we're only two years into this idea, and despite the rampant speculation that surrounds Musk's involvement, it would be a mistake to count him out.
THE SPACEX COMPETITION GUIDELINES STATE THAT NO human or animal of any kind can be placed inside the test pods. It's a standard safety precaution at this early stage, but the passenger ban underscores a serious public perception problem. Assuming the Hyperloop movement overcomes the regulatory, land-use and technological obstacles, it still has to persuade the public to get on board in the literal sense. Hyperloop Alpha contained a pod rendering that resembled a bullet with seating pitched at a semi-reclined angle: a claustrophobic high-tech bobsled. Other concerns became apparent. If a tube were to rupture or braking mechanisms were to fail, the pods could go from bullet trains to actual bullets in the world's largest gun barrel. Worse, if the tubes were somehow crushed or blocked, it could be like tying the barrel in the act of firing. The initial excitement for a fifth mode of transportation had hit a roadblock.
The need for an appealing and assuring user experience is not lost on the Hyperloop movement. HTT has recently collaborated with UCLA's Suprastudio Architecture Program, which matches corporate partners with teams of top architecture students and faculty. In contrast with Musk's SpaceX contest, which invited hundreds of teams to create a half-scale pod, Dirk Ahlborn's HTT posed a challenge to a team of 25 at UCLA: create solutions for the Hyperloop user experience around a central technology that does not yet exist. Built into that challenge is the perceived impossibility of the technology. Architect Craig Hodgetts, the faculty leader of the Suprastudio team, describes their aim as "changing the emotional context" for the Hyperloop. Marta Nowak, another faculty member, puts it this way: "We wanted to change it from a ride no one wants to get on to a ride no one wants to get off."
As early test cases were discussed, a student named Yayun Zhou mentioned her grandmother in China as someone who would never set foot in a capsule capable of traveling near the speed of sound. Hodgetts asked for a picture of her grandmother, taped it to the studio wall and asked: "How do we get Yayun's grandmother to ride the Hyperloop?" The elderly Chinese woman became the project's muse.
A user experience suitable for Yayun's grandmother required a mix of urban planning, architecture, engineering, business marketing and even show business--Hodgetts brought in guests like Larry Gertz, the legendary Disney theme-park designer, and Syd Mead, the visual futurist who designed iconic vehicles and robots in "Star Trek," "Tron" and "Blade Runner." Suprastudio's students suggested pods pressurized like airplanes to reduce G forces and, to make up for a lack of windows, landscape simulations projected on the insides of the pods--forests, starry skies, fields of grass. At the conclusion of the program, Ahlborn brought Yayun Zhou and some of her classmates onto the HTT team.
WHILE THE UCLA SUPRASTUDIO TEAM WAS ADDRESSING the user experience for HTT, students at the University of Illinois at Urbana-Champaign were putting the finishing touches on a 1/24th-scale Hyperloop, complete with a magnetic induction coil and a 3-D printed pod. On May 4th, their tiny pod accelerated forward in the tube, exactly as they'd hoped. Later, the students shot a six-second video and posted it on YouTube.
The video went up shortly after the SpaceX competition was announced. "Suddenly our YouTube video was getting all these hits," says Emad Jassim, the director of undergraduate programs for the university's department of mechanical science and engineering (MechSE). "But we were right here the whole time."
The Illinois team enters the SpaceX contest with a strong competitive edge. This is its fourth Hyperloop design project, the first dating to fall 2013, and the Hyperloop is now a part of the MechSE curriculum. The team has assembled an interdisciplinary network of faculty from aeronautical engineering, thermal dynamics, mechanical engineering, electronic engineering and software, and two of the team members have interned at SpaceX, including team leader Zak Lee-Richerson, who, with his blond hair and motorcycle jacket, looks ready to play himself in the movie about his life. According to faculty leader and professor Carlos Pantano-Rubino, the final cost of the test pod is still undetermined, another obstacle on the road to building something that does not yet exist. But it helps that the project's corporate sponsor, Shell, has some of the deepest pockets in the world.
The Illinois team is divided into five groups: four focused on distinct aspects of the pod design, and a fifth group, focused on safety and reliability, which has one member on each of the other groups. Senior team leader Jake Haseltine describes the safety team's mission as the prevention of "branching failures"--one problem that turns into two, which each turn into several more until catastrophe strikes across systems. Haseltine's biggest fear going into the competition? "We're afraid another team would go first and damage the tube," he said. "And that after a year's work, we wouldn't be able to present our pod. So we're hoping to go first."
"Branching failures" is the easiest way to characterize the challenge facing Musk's test track. The competition guidelines say it will be designed to accommodate pods with different kinds of magnetic and air bearings, passing just millimeters from the ground. None of the competition pods will have had a test flight in a tube before this; failures are likely, even probable. The tube is a smart tube, capable of communicating with the pod's operating system, much more delicate than an insensate subway tunnel. Even slight dings could compromise the bearings of the next pod. Musk's competition could show the world a multitude of Hyperloop pod designs, or it could be the day we find out how much time and money it takes to repair a tube.
THE SPACEX HYPERLOOP CHALLENGE IS, for now, an old-fashioned contest in the spirit of the annual competitions between engineering students who create and race low-carbon-emission Formula One race-car prototypes. Musk has even said he hopes his challenge leads to Hyperloop races. SpaceX's competition site states clearly they have no plans to develop the Hyperloop commercially, and sources close to SpaceX say Musk is content to act as a Hyperloop evangelist who also happens to be the idea's author. But by the end of the competition, the SpaceX test track will have recorded data from all of the test pods--that's how the smart tube works. If SpaceX changes its mind and decides to create its own system, it would have a proprietary tube able to use several kinds of pods--a potential end run around the compatibility issue raised by Quay Hays's notion of two or more Hyperloops. Playing host to the competition could put SpaceX in a strong position to proceed commercially.
It would be easy, then, to think we're watching the creation of a fifth form of transportation, or a Silicon Valley disruption of mass transit, or a startup pissing match over the brass ring of Elon Musk's funding and approval. But there's more at stake for Musk. By writing Hyperloop Alpha, Musk was essentially asking America, "Do you really want to be the country that spends $68 billion to build the slowest high-speed train in the world?" To ask that question, Musk had to give the Hyperloop idea away. 2016 may be the year he gets his reply.
Alexander Chee is a contributing editor to The New Republic and the author of "The Queen of the Night," to be published by Houghton Mifflin Harcourt in February 2016.
Corrections & Amplifications
Inventor Elon Musk's proposed Hyperloop Alpha transportation pod could eventually be pressurized to minimize the G forces' effects on a passenger. An earlier version of this article incorrectly said the pressurization of the pod could minimize the G forces themselves. (Dec. 4, 2015)
Credit: By Alexander Chee | Photographs by Spencer Lowell for The Wall Street Journal
Subject: Light rail transportation; Magnetic levitation systems; Startups; High speed rail
Location: California United States--US San Francisco California Los Angeles California
Company / organization: Name: Space Exploration Technologies Corp; NAICS: 336414
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Nov 30, 2015
Section: Page One
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1737532497
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1737532497?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Fast Forward | Autos; Could Self-Driving Cars Spell the End of Ownership? When companies like Apple and Tesla roll out their autonomous vehicles, the need for a personal car might be a thing of the past
Author: Neil, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2015: n/a.
ProQuest document link
Abstract:
Even in the most car-blighted burg in the world, the toxic parking lot they call Beijing , the appetite for the automobile--as status item, as luxury, as totem of personal mastery in a fragile postcolonial mind-set--is driving millions more into its smoggy embrace, despite limits on ownership and the government's rising alarm. Need a car to take mom to the doctor's, or fetch a spouse from the airport? A decade hence, major auto makers and smaller players will be at each others' throats for the privilege of sending consumers vehicles a la carte, for a one-way trip, an afternoon, a weekend, a month.
Full text: HENRY FORD WAS A smart guy but he never did the math when he decided to put every American household on wheels.
A century after the Model T, the world has a problem with cars. The U.S. and China will consume about 40 million light vehicles in 2015, according to IHS. Globally, we're on track to hit 100 million vehicles in 2020.
That's not a lot of cars . That's an ocean of cars, an inundation, wave after wave breaking on the shores of the industrialized world. And yet policy makers and common folk alike have been powerless against the siren song of the automobile. Even in the most car-blighted burg in the world, the toxic parking lot they call Beijing , the appetite for the automobile--as status item, as luxury, as totem of personal mastery in a fragile postcolonial mind-set--is driving millions more into its smoggy embrace, despite limits on ownership and the government's rising alarm.
The absurdity of our century-old, ad hoc approach to mobility is captured in one statistic: The utilization rate of automobiles in the U.S. is about 5%. For the remaining 95% of the time (23 hours), our cars just sit there , a slow, awful cash burn, like condos at the beach.
But what if, like condos, automobiles could be shared? It's one of life's first lessons--how to share toys, parents, rooms, feelings. But as little consumers grow into adults, they forget the joys of selflessness. That's about to change. And I don't mean the collaborative consumerism we see around us--peer-to-peer transportation like Uber--which is symbolic and transitional, lasting only until automation happens, at which point we can get rid of the wetware. And by wetware, I mean us.
Within a generation, automobiles will be endowed with what's known as Level 4 autonomy--full self-driving artificial intelligence for cars --which will not so much change the game as burn down the casino. Autonomy will make it possible for unmanned automobiles to be summoned, via app, to your location. And not just any passing tramp steamer, but exactly the vehicle you need for the occasion, cleaned and fueled, for as little or as long as you need (offers may vary in your state). When you're done--poof!--it will go away.
You don't pay for the car. You pay for the miles. And only the miles. It's a whole new way to fly. Let's start small. Need a pickup for three weekends a year but don't want to pay for the other 49? Autonomy can make that happen easily without a visit to the dreaded U-Haul depot. Need a car to take mom to the doctor's, or fetch a spouse from the airport? A decade hence, major auto makers and smaller players will be at each others' throats for the privilege of sending consumers vehicles a la carte, for a one-way trip, an afternoon, a weekend, a month. These transactions will move through the glowing bowels of your monthly credit accounts, and you won't even feel them.
Americans will look back on pre-autonomy like the age of Casio calculators and DOS prompts. Remember cab drivers? Remember traffic jams? Remember when parents lived in dread that their children would die in a car accident? Death and major injury from traffic accidents will drop drastically. The automobile's other costs--decreased productivity, fuel burned in uncoordinated traffic--will be swept away. "Beyond the practical benefits, autonomous cars could contribute $1.3 trillion in annual savings to the U.S. economy alone," wrote Ravi Shanker, a Morgan Stanley analyst covering the U.S. auto business. Global savings? Somewhere in the neighborhood of $5.6 trillion.
You may be wondering, back here in 2015, if the auto industry is worried about shared mobility. Doesn't it spell declining sales? It could. But in a mature market like the U.S. turnover will remain fairly stable. What would change is the number of passengers that passed through every vehicle--including a vast untapped market that doesn't drive today. "Level 4 AV technology, when the vehicle does not require a human driver, would enable transportation for the blind, disabled or those too young to drive," says the Rand Corporation in a report on the subject. "The benefits for these groups would include independence, reduction in social isolation, and access to essential services."
These same benefits would return mobility to millions on the margins, including the elderly, the working poor and those who have lost their driving privileges due to a criminal record. (It's not hard to see the throughline between autonomy and the hobbling economic effects of mass incarceration.)
In August 2015, Morgan Stanley nearly doubled its price target for Tesla , to $465 per share, based on an analysis of Tesla's so-far secret shared-mobility plan. "We view this as a business opportunity," wrote Morgan Stanley analyst Adam Jonas, "[that could] more than triple the company's potential revenues by 2029."
And, far from funneling consumers into fleets of lustless electric drones, autonomy could have the opposite effect. Immersive-connected consumers will be able to draw from a vast and constantly replenished motor pool of shared vehicles--dune buggies, pickup trucks, German luxury sedans--with little or no notice, a cast of automotive avatars.
At this point a fair reader might wonder if I have ever been to America. The notion that we as consumers will forgo the awesome pleasures of the automobile--the privilege, the mobility, the identity--to share vehicles is, I grant, unfamiliar.
But America's much-sung-about love affair with the automobile has grown cold. Rates of motor-vehicle licensure are already plummeting among young Americans. The obligations and costs of transportation--an average 17% of household budgets--are driving them out of automobility altogether. And enthusiasm for automotive culture is waning too, as the empty seats at Nascar events attest.
Personal-vehicle ownership isn't going away. Some people will own and cherish cars. But those people and their cars will be considered classics. Rates of ownership will decline, an artifact of an era of hyperprosperity and reckless glut. Twenty-five years from now, the only people still owning cars will be hobbyists, hot-rodders and flat-earth dissenters. Everyone else will be happy to share.
Write to Dan Neil at Dan.Neil@wsj.com
Credit: By Dan Neil
Subject: Automobile industry; Vehicles; Traffic congestion
Location: United States--US China
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Dec 1, 2015
Section: Life
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1738042726
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1738042726?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is pro hibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Porsche to Invest $1 Billion in Mission E Electric Model; Mission E project threatens Tesla Motors, which has established itself as the lead maker of high-end electric sports cars
Author: Sloat, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2015: n/a.
ProQuest document link
Abstract:
Mr. Reimold, 54, will transfer to Germany from his current position at a Volkswagen plant in Slovakia which also produces the body for Porsche's Cayenne, the company said. Since September, the Volkswagen group has made a number of management changes in the wake of an emissions scandal that has touched Volkswagen, Audi, Porsche and other subsidiaries.
Full text: FRANKFURT--Porsche AG on Friday said that it would invest about [euro]1 billion ($1.07 billion) and create more than 1,000 jobs in preparation for the production of its Mission E electric model.
The bulk of the planned investment will go to Porsche's main Zuffenhausen plant, in the northern suburbs of Stuttgart. Porsche said it would invest [euro]700 million in Zuffenhausen, where it plans a new paint shop and assembly plant, and to expand existing facilities.
Porsche's Mission E project threatens Tesla Motors Inc., which has established itself as the lead maker of high-end electric sports cars. Tesla's pricey Model S sedan has been lauded for its credibility as a street performance vehicle, and executives at Porsche and other German auto makers are eager to rival it.
Porsche also said Friday that Albrecht Reimold would join its management board with responsibility for production, effective Feb. 1. He replaces Oliver Blume, who recently became chief executive at the sports car maker.
Mr. Reimold, 54, will transfer to Germany from his current position at a Volkswagen plant in Slovakia which also produces the body for Porsche's Cayenne, the company said.
Since September, the Volkswagen group has made a number of management changes in the wake of an emissions scandal that has touched Volkswagen, Audi, Porsche and other subsidiaries.
"I know Albrecht Reimold as a knowledgeable team player," Mr. Blume said in a statement. "He knows that achieving the best quality in production facilities depends on people."
The Mission E concept car was introduced at the Frankfurt Auto Show in September.
Write to Sarah Sloat at sarah.sloat@wsj.com
Credit: By Sarah Sloat
Subject: Automobile shows; Automobile industry
People: Blume, Oliver
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: Porsche AG; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Dec 4, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1739131870
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1739131870?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Faraday Future Picks Nevada Site for $1 Billion Electric-Car Investment; North Las Vegas manufacturing plant would compete with Tesla Motors
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2015: n/a.
ProQuest document link
Abstract: None available.
Full text: Faraday Future Inc. has settled on a location in North Las Vegas for a $1 billion investment in a new manufacturing site for a luxury electric car that would compete with Tesla Motors Inc.'s Model S.
The company's leading financial backer, Yueting Jia, who is also the founder and chief executive of Leshi Internet & Technology Co., sent a letter to Nevada legislators laying out the company's intentions and identifying himself as one of a group of investors.
Faraday has been looking at sites in several states and is awaiting a special piece of incentive legislation from the state of Nevada to finalize its plans. Nevada on Wednesday called a news conference for Thursday to announce a significant economic development.
Faraday has been in existence since only 2014 and has more than 400 employees. The company has taken over Nissan Motor Co.'s former sales headquarters in Gardena, Calif. According to Mr. Yueting's letter, which was reviewed by The Wall Street Journal, the company also has a Silicon Valley office along with employees in Düsseldorf, Germany, and Beijing, where LeTV is based.
Faraday plans to begin manufacturing the car in 2017 and has promised Nevada the investment there will produce 4,500 jobs. Faraday is showing a prototype at the Consumer Electronics Show in Las Vegas next month.
Mr. Yueting is a billionaire whose tech company offers Web-based television services in China. He has been called "the Chinese Elon Musk."
Only a year ago, Nevada won the derby for Tesla's battery factory, called the "gigafactory" by Mr. Musk, awarding Tesla up to $1.3 billion in incentives.
Faraday executives had kept secret who was backing the fast-growing venture, but the letter to the Nevada legislators makes it clear. LeTV also is the owner of the building in Gardena where the headquarters is located.
Faraday has recruited people from BMW AG and General Motors Co. as well as Tesla. It is promising a car with a longer electric range than Tesla's.
Faraday is one of several companies attempting to create an electric car to compete with Tesla. Atieva Inc., backed by Beijing Automobile Industry Holding Corp. as well as LeTV, also is developing an electric car in Silicon Valley. It is run by a former a Tesla engineer, Bernard Tse.
Karma Automotive, formerly Fisker Automotive, which is based in Southern California, has revived its hopes after China's Wanxiang Group Corp. bought the failed hybrid-electric supercar maker out of bankruptcy in 2014. The company has secured a manufacturing facility in Southern California.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Dec 10, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1747117754
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1747117754?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
WSJ.D Technology: Warrior Joins Electric-Car Startup --- Ex-Cisco executive becomes U.S. boss of China's NextEv, which aims to rival Tesla
Author: Clark, Don
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]16 Dec 2015: B.5.
ProQuest document link
Abstract:
Padmasree Warrior, who until September served as chief technology and strategy officer at Cisco Systems Inc., said she is joining Chinese auto startup NextEV Inc. as its U.S. chief executive officer and head of software development.
Full text: One of Silicon Valley's best-known female tech executives is shifting industries to join the global race to develop electric cars.
Padmasree Warrior, who until September served as chief technology and strategy officer at Cisco Systems Inc., said she is joining Chinese auto startup NextEV Inc. as its U.S. chief executive officer and head of software development.
Based in Shanghai, NextEV is part of a new crop of Chinese-backed entrants that aim to challenge Tesla Motors Inc. and other manufacturers in the electric vehicle market.
Ms. Warrior, a 55 year-old Indian-born executive who takes part in many tech industry events, said she wanted to try a new field where her 30 years of technology experience would still be relevant. "I wanted to be part of creating something that is bigger and different," she said.
Founded in 2014, NextEV doesn't yet have electric vehicles on the market, but has already developed a single-passenger race car that has competed in the FIA Formula E races for electric vehicles.
NextEV has raised $500 million and hopes to attract total funding of $1 billion, the startup said. Investors include Tencent Holdings Ltd., the Chinese investment management company Hillhouse Capital and a China-based arm of venture-capital firm Sequoia Capital.
NextEV was founded by William Li, the chairman and CEO of an automobile-focused Internet content and marketing company Bitauto Holdings Ltd.
NextEV hopes to develop electric cars that are affordable for consumers, selling initially in China and then branching into other markets, Ms. Warrior said. It hasn't set a timetable for bringing those vehicles to market.
First, though, the company hopes to deliver what it calls a "supercar," a 1,360-horsepower speedster that would compete against high-end sports cars, Ms. Warrior said.
NextEV plans to rely on partners for manufacturing but hasn't selected any yet, Ms. Warrior said.
Ms. Warrior joined Cisco in 2008 and held a variety of positions. She announced plans to leave Cisco in June, the month after Chuck Robbins was named to succeed long-standing CEO John Chambers. Ms. Warrior said she had considered leaving the company for some time, so she couldn't commit to staying on as part of Mr. Robbins's new management team for a definite period of time. Leaving Cisco "was entirely my decision," she said.
Credit: By Don Clark
Subject: Alliances; Electric vehicles; Chief executive officers; Startups; Appointments & personnel changes
Location: United States--US
People: Warrior, Padmasree Y
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: NextEV Inc; NAICS: 336111
Classification: 9180: International; 8680: Transportation equipment industry; 2120: Chief executive officers
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2015
Publication date: Dec 16, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 009996 60
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1749120963
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1749120963?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Ex-Cisco Executive Padmasree Warrior Joins Electric-Car Startup; Warrior, one of Silicon Valley's best-known female executives, becomes U.S. boss of NextEv, which aims to rival Tesla
Author: Clark, Don
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Dec 2015: n/a.
ProQuest document link
Abstract:
NextEV was founded by William Li, the chairman and CEO of an automobile-focused Internet content and marketing company Bitauto Holdings Ltd. Its president is Martin Leach, an auto-industry veteran who is a former top executive at Ford Motor Co., Mazda Motor Corp. and Maserati.
Full text: One of Silicon Valley's best-known female tech executives is shifting industries to join the global race to develop electric cars.
Padmasree Warrior, who until September served as chief technology and strategy officer at Cisco Systems Inc., said she is joining Chinese auto startup NextEV Inc. as its U.S. chief executive officer and head of software development.
Based in Shanghai, NextEV is part of a new crop of Chinese-backed entrants that aim to challenge Tesla Motors Inc. and other manufacturers in the electric vehicle market.
Ms. Warrior, a 55-year-old Indian-born executive who takes part in many tech-industry events, said she wanted to try a new field where her 30 years of technology experience would still be relevant. "I wanted to be part of creating something that is bigger and different," she said.
Founded in 2014, NextEV doesn't yet have electric vehicles on the market, but has already developed a single-passenger race car that has competed in the FIA Formula E races for electric vehicles.
NextEV has raised $500 million and hopes to attract total funding of $1 billion, the startup said. Investors include Tencent Holdings Ltd., the Chinese investment management company Hillhouse Capital and a China-based arm of venture-capital firm Sequoia Capital. Other prominent Internet entrepreneurs have also invested, NextEV said.
NextEV was founded by William Li, the chairman and CEO of an automobile-focused Internet content and marketing company Bitauto Holdings Ltd. Its president is Martin Leach, an auto-industry veteran who is a former top executive at Ford Motor Co., Mazda Motor Corp. and Maserati.
NextEV hopes to develop electric cars that are affordable for consumers, selling initially in China and then branching into other markets, Ms. Warrior said. It hasn't set a timetable for bringing those vehicles to market.
First, though, the company hopes to deliver what it calls a "supercar," a 1,360-horsepower speedster that would compete against high-end sports cars, Ms. Warrior said.
NextEV plans to rely on partners for manufacturing but hasn't selected any yet, Ms. Warrior said.
The company's potential rivals, besides Tesla, include startups such as Faraday Future Inc. and Karma Automotive, which was known as Fisker Automotive before China's Wanxiang Group Corp. bought the company out of bankruptcy.
NextEV has said it has hired 400 employees to date and set up research and design centers in locations that include London, Hong Kong, Munich and San Jose, Calif.
Ms. Warrior, who will be based in the California location, said she would oversee the global development of software for the company's cars as well as some vehicle development.
Ms. Warrior joined Cisco in 2008 and held a variety of positions. In her final job, she was responsible for activities that included mergers and acquisitions, venture investments, and strategic partnerships.
She announced plans to leave Cisco in June, the month after Chuck Robbins was named to succeed long-standing CEO John Chambers. Ms. Warrior said she had considered leaving the company for some time, so she couldn't commit to staying on as part of Mr. Robbins's new management team for a definite period of time. Leaving Cisco "was entirely my decision," she said.
Before Cisco, Ms. Warrior served 23 years at Motorola Inc., holding positions that included chief technology officer. She was recently named to the board of directors of Microsoft Corp. and in 2014 became a director of file-sharing company Box Inc.
Credit: By Don Clark
Subject: Startups; Electric vehicles; Appointments & personnel changes; Chief executive officers; Alliances; Automobile industry
Location: United States--US California
Company / organization: Name: Mazda Motor Corp; NAICS: 336111; Name: Bitauto Holdings Ltd; NAICS: 541810; Name: Tencent Holdings Ltd; NAICS: 517210; Name: Fisker Automotive Inc; NAICS: 336111; Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Tesla Motors Inc; NAICS: 336999; Name: Cisco Systems Inc; NAICS: 511210, 334118
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Dec 16, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1749134159
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1749134159?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla CEO Musk, Others Urge California to Push VW Toward Electric Cars; California Air Resources Board asked to direct Volkswagen toward zero emissions after scandal
Author: Spector, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Dec 2015: n/a.
ProQuest document link
Abstract:
Tesla Motors Chief Executive Elon Musk and more than three dozen others are urging California regulators to push Volkswagen AG toward more environmentally friendly vehicles after the German auto giant recently used software to cheat on emissions tests with diesel-powered cars.
Full text: Tesla Motors Chief Executive Elon Musk and more than three dozen others are urging California regulators to push Volkswagen AG toward more environmentally friendly vehicles after the German auto giant recently used software to cheat on emissions tests with diesel-powered cars.
California regulators should direct Volkswagen to "accelerate greatly its rollout of zero-emission vehicles," Mr. Musk and others wrote in a letter Thursday to Mary Nichols, head of the California Air Resources Board. Unlike vehicles powered by gas and diesel engines, electric vehicles and other technologies can result in few or no emissions of pollutants.
Volkswagen in October said a new Phaeton vehicle would be electric and that the company would focus on plug-in hybrids and high-volume electric vehicles with a range exceeding 186 miles.
Representatives for Volkswagen and Tesla had no immediate comment on the letter. A CARB spokesman said, "Our focus has and will continue to be cleaning the air and advancing the cleanest vehicle and fuel technologies."
In addition to Mr. Musk, the letter to California regulators was signed by Internet entrepreneur and former eBay Inc. executive Jeff Skoll and Michael Burne, executive director of the Sierra Club.
The letter was spearheaded by Tesla investor Ion Yadigaroglu, managing principal at Capricorn Investment Group, said Michael Shank, director of media strategy at Climate Nexus, an environment-focused communications firm. Capricorn manages $4 billion with a focus on sustainable investments for Mr. Skoll, the Skoll foundation and others, according to its website.
The letter echoes arguments Mr. Yadigaroglu made earlier this year, suggesting Volkswagen should be forced to make electric vehicles as punishment for cheating on U.S. emissions tests. Volkswagen has admitted installing illegal software on nearly 500,000 diesel-powered cars sold in the U.S. since 2008 that allowed them to pollute more on the road than during government emissions tests.
The letter suggests letting Volkswagen off the hook for fixing affected diesel cars already on the road in California, claiming they represent an insignificant portion of total vehicle emissions in the state. Mr. Musk and others want the rollout of zero-emissions vehicles instead, with a goal of over the next five years achieving a 10-for-1 greater reduction in pollutant emissions compared with those associated with the diesel cheating, according to the letter.
Volkswagen should also invest in new factories and research and development in lieu of paying fines that might ultimately stem from its emissions cheating, the letter said.
Volkswagen separately on Thursday said it had appointed outside lawyer Kenneth Feinberg to administer an independent claims resolution program to address vehicles with two-liter and three-liter diesel engines affected by its emissions crisis.
Write to Mike Spector at mike.spector@wsj.com
Credit: By Mike Spector
Subject: Emissions; Automobile industry; Cheating; Electric vehicles
Location: California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: Sierra Club; NAICS: 813312; Name: eBay Inc; NAICS: 454112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Dec 17, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1749753870
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1749753870?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Ramps Up Hiring as Rivals Loom; Electric-car maker builds on CEO Elon Musk's fame to recruit engineers through Twitter
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Dec 2015: n/a.
ProQuest document link
Abstract:
Tesla currently has 1,600 open positions and is aggressively courting engineers for its autonomous car efforts, known as Autopilot. Because the auto maker's business model is built on explosive growth forecasts through the end of the decade, Mr. Musk needs to add head count faster than a typical auto maker with small volumes would.
Full text: A few weeks ago, Elon Musk put out a call on Twitter for "hard-core software engineers" to work on Tesla Motors Inc.'s autonomous car program. The company's inbox was flooded.
While Mr. Musk was only looking for 100 prospects, he may want to keep the other applicants within ear shot. The electric-car company, which recently released its first sport-utility vehicle and will soon open a battery factory in Nevada, is looking to add thousands of employees in coming years just as an auto industry showdown for tech talent is brewing.
Tesla isn't the only player in town. The 12-year-old company is tussling with a growing mass of auto makers crowding into California looking for people capable of helping develop software and other components needed to power electric or autonomous vehicles.
Several startups, including Chinese-backed Faraday Future Inc., Karma Automotive Inc. and Atieva Inc., have been luring people away from Tesla for their own electric-car ventures.
At the same time, established industry heavyweights are expanding offices in Silicon Valley, investing in new ventures to better combat Apple Inc. and Alphabet Inc.'s Google as those companies develop automobiles.
Ford Motor Co. and Toyota Motor Co. are among traditional auto makers placing big bets in Tesla's backyard.
Palo Alto-based Tesla, which grew to 14,000 employees from just 899 at the end of 2010, plans to add 4,500 more workers in California alone during the next four years, according to terms of a $15 million tax credit awarded this year. Tesla currently has 1,600 open positions and is aggressively courting engineers for its autonomous car efforts, known as Autopilot.
Because the auto maker's business model is built on explosive growth forecasts through the end of the decade, Mr. Musk needs to add head count faster than a typical auto maker with small volumes would.
Addressing his 3.1 million followers on Twitter, Mr. Musk said "no prior experience with cars required. Please include code sample or link to your work." He then added, "I will be interviewing people personally and Autopilot reports directly to me. This is a super high priority."
A Tesla spokeswoman said "we're a career destination for extremely talented hard-core software engineers, and Elon's tweet opened the gate to a new wave of exceptional candidates."
Building on Mr. Musk's fame may be a more cost-effective strategy than relying on outside firms. Fees paid to placement agencies for software engineers in the Bay Area have doubled to around $30,000 to $40,000 per employee in the past two years, said Paul Harty, president of Seven Step RPO, a recruiting outsourcing company.
Tesla's $30 billion stock market valuation reflects Wall Street's optimism about its growth prospects, but the company walks a financial tightrope as it continues to lose money and burns cash on multiple future product programs.
The company isn't only outgrowing its pocketbook. Tesla is sprawling over the Bay Area due to explosive employment growth and its Palo Alto headquarters is proving to be too small.
There is a valet to park employee cars as the small parking lot at the headquarters is always full.
These days, many of the office and engineering functions are performed in Fremont at its factory.
Large sections of the plant have been taken over by offices and the parking area at the plant, which was once co-owned by Toyota Corp. and General Motors Co., is completely full.
"I think we will be building a consolidated headquarters at some point in the future," Mr. Musk said in September. He said the company would remain in California, but the location of a new headquarters hadn't been determined.
In all, Tesla has spread over eight buildings in the Bay Area. Recently, it moved into a former solar panel manufacturing center formerly owned by Solyndra LLC, which fell into bankruptcy in 2011 after getting a U.S. Department of Energy loan.
Tesla held a party in the building to unveil its Model X sport-utility vehicle earlier this year.
Tesla's employment relative to vehicle production is relatively high compared with other luxury car makers. Jaguar Land Rover, the luxury auto maker owned by Tata Motors Ltd., is on pace to sell about 500,000 vehicles in 2015 and has 36,000 employees, or 13.8 vehicles per employee.
Tesla is on pace for 52,000 sales with 14,000 workers, or about 3.7 cars per worker.
The lower ratio of employees to production is partially because the company is still scaling up and planning for a much higher volume, and because Tesla does many functions in-house.
For instance, Tesla recently replaced a seat supplier for the Model X with an in-house production staff, something that is exceptionally rare in the auto industry.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Social networks; Corporate headquarters
Location: California Nevada
Company / organization: Name: Google Inc; NAICS: 519130; Name: Alphabet Inc; NAICS: 551114; Name: Atieva Inc; NAICS: 335912; Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Apple Inc; NAICS: 511210, 334111, 334220; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Dec 29, 2015
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1752116791
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1752116791?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wa ll Street Journal
Tesla Is Hiring Fast as Rivals Loom
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Dec 2015: B.1.
ProQuest document link
Abstract:
Tesla currently has 1,600 open positions and is aggressively courting engineers for its autonomous car efforts, known as Autopilot. Because the auto maker's business model is built on explosive growth forecasts through the end of the decade, Mr. Musk needs to add head count faster than a typical auto maker with small volumes would.
Full text: A few weeks ago, Elon Musk put out a call on Twitter for "hard-core software engineers" to work on Tesla Motors Inc.'s autonomous car program. The company's inbox was flooded.
While Mr. Musk was only looking for 100 prospects, he may want to keep the other applicants within ear shot. The electric-car company, which recently released its first sport-utility vehicle and will soon open a battery factory in Nevada, is looking to add thousands of employees in coming years just as an auto industry showdown for tech talent is brewing.
Tesla isn't the only player in town. The 12-year-old company is tussling with a growing mass of auto makers crowding into California looking for people capable of helping develop software and other components needed to power electric or autonomous vehicles.
Several startups, including Chinese-backed Faraday Future Inc., Karma Automotive Inc. and Atieva Inc., have been luring people away from Tesla for their own electric-car ventures.
At the same time, established industry heavyweights are expanding offices in Silicon Valley, investing in new ventures to better combat Apple Inc. and Alphabet Inc.'s Google as those companies develop automobiles.
Ford Motor Co. and Toyota Motor Co. are among traditional auto makers placing big bets in Tesla's backyard.
Palo Alto-based Tesla, which grew to 14,000 employees from just 899 at the end of 2010, plans to add 4,500 more workers in California alone during the next four years, according to terms of a $15 million tax credit awarded this year. Tesla currently has 1,600 open positions and is aggressively courting engineers for its autonomous car efforts, known as Autopilot.
Because the auto maker's business model is built on explosive growth forecasts through the end of the decade, Mr. Musk needs to add head count faster than a typical auto maker with small volumes would.
Addressing his 3.1 million followers on Twitter, Mr. Musk said "no prior experience with cars required. Please include code sample or link to your work."
He then added, "I will be interviewing people personally and Autopilot reports directly to me. This is a super high priority."
A Tesla spokeswoman said "we're a career destination for extremely talented hard-core software engineers, and Elon's tweet opened the gate to a new wave of exceptional candidates."
Building on Mr. Musk's fame may be a more cost-effective strategy than relying on outside firms. Fees paid to placement agencies for software engineers in the Bay Area have doubled to around $30,000 to $40,000 per employee in the past two years, said Paul Harty, president of Seven Step RPO, a recruiting outsourcing company.
Tesla's $30 billion stock market valuation reflects Wall Street's optimism about its growth prospects, but the company walks a financial tightrope as it continues to lose money and burns cash on multiple future product programs.
The company isn't only outgrowing its pocketbook. Tesla is sprawling over the Bay Area due to explosive employment growth and its Palo Alto headquarters is proving to be too small.
There is a valet to park employee cars as the small parking lot at the headquarters is always full.
These days, many of the office and engineering functions are performed in Fremont at its factory.
Large sections of the plant have been taken over by offices and the parking area at the plant, which was once co-owned by Toyota Corp. and General Motors Co., is completely full.
"I think we will be building a consolidated headquarters at some point in the future," Mr. Musk said in September. He said the company would remain in California, but the location of a new headquarters hadn't been determined.
In all, Tesla has spread over eight buildings in the Bay Area. Recently, it moved into a former solar panel manufacturing center formerly owned by Solyndra LLC, which fell into bankruptcy in 2011 after getting a U.S. Department of Energy loan.
Tesla held a party in the building to unveil its Model X sport-utility vehicle earlier this year.
Tesla's employment relative to vehicle production is relatively high compared with other luxury car makers. Jaguar Land Rover, the luxury auto maker owned by Tata Motors Ltd., is on pace to sell about 500,000 vehicles in 2015 and has 36,000 employees, or 13.8 vehicles per employee.
Tesla is on pace for 52,000 sales with 14,000 workers, or about 3.7 cars per worker.
The lower ratio of employees to production is partially because the company is still scaling up and planning for a much higher volume, and because Tesla does many functions in-house.
For instance, Tesla recently replaced a seat supplier for the Model X with an in-house production staff, something that is exceptionally rare in the auto industry.
Credit: By Mike Ramsey
Subject: Automobile industry; Social networks; Corporate headquarters; Appointments & personnel changes
Company / organization: Name: Google Inc; NAICS: 519130; Name: Alphabet Inc; NAICS: 551114; Name: Atieva Inc; NAICS: 335912; Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Apple Inc; NAICS: 511210, 334111, 334220; Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 6100: Human resource planning; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Dec 29, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1752155601
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1752155601?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Delivers 17,400 Vehicles in Fourth Quarter; Figure is a three-month record; company investigating fire in Norway
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Jan 2016: n/a.
ProQuest document link
Abstract:
According to Norwegian television station Web page, VG.no, a Model S owner plugged in his vehicle at a Supercharger on New Year's Day and walked away and the vehicle caught fire.
Full text: Tesla Motors Inc. delivered 17,400 vehicles in the last three months of 2015, the most in a quarter by a wide margin and 75% more than a year earlier as the company rushed to hand over Model X sport-utility vehicles to customers who have been waiting for three years since making a deposit.
Separately, Tesla is investigating a fire that destroyed a Model S in Norway. According to Norwegian television station Web page, VG.no, a Model S owner plugged in his vehicle at a Supercharger on New Year's Day and walked away and the vehicle caught fire. No one was injured. The Tesla fast-charging system delivers up to 130 kilowatts of direct current, allowing for a speedy charge of the car's large battery.
Tesla achieved its forecast of more than 50,000 vehicles for the year with the burst of deliveries of Model S electric cars and a smattering of 208 Model X SUVs. The company said it produced 507 Model X vehicles in the final quarter of the year and is now producing about 238 Model X vehicles per week. Tesla delivered nearly 50% more vehicles in the quarter than in its next highest quarter.
The fire, which occurred in Tesla's biggest European market, is a bit of unwelcome news that is likely to stoke some concern about Tesla's Supercharger system, which delivers more than twice the power of similar fast-charging systems used by competing car makers.
"We are undergoing a full investigation and will share our findings as soon as possible," a Tesla spokeswoman said. Tesla officials hadn't revealed the cause of the fire by late Saturday night. Two years ago Tesla installed new shielding under its Model S vehicles after several cars caught fire when they ran over roadway debris and punctured the lithium-ion batteries that sit in a large rectangle under the vehicle. Since then, there haven't been any reported fires.
News of the fire comes just as Tesla is reporting its year-end deliveries, which are monitored closely as the company tries to ratchet up its manufacturing capabilities to match demand.
Tesla's sales got a boost from a burst of deliveries to Europe, where an expiring tax credit in Denmark contributed to the burst in volume. Tesla was able to meet its delivery expectations of 50,000 to 52,000 vehicles. Tesla reports sales globally on a quarterly basis and doesn't break out regions, but a Tesla executive in November acknowledged the Denmark deliveries.
Tesla's Model S and the new Model X SUV, are appealing to a luxury buyer interested in high tech, not simply people trying to avoid buying gasoline. That has helped to drive demand even as the price of gasoline is under $2 a gallon and makes the value proposition of an electric car worse.
Tesla's launch of the Model X was slow during the final three months of the year. The company first delivered the long-awaited SUV to executives and important investors, known as "Founders" and then to "Signature" reservation holders. The latter group had begun placing reservations for the car in the winter of 2012, before the Model S was even delivered.
The Signature reservation holders didn't begin receiving vehicles until late December.
The Model X has numerous manufacturing challenges , including its unique falcon-wing doors that open from the roof and contain ultrasonic sensors that detect nearby cars and the ceiling. It also has single-post seats in the second row that are difficult to build and forced Tesla to bring seat assembly in-house, an unheard-of move by a mass manufacturer.
CEO Elon Musk said the company should be at full production of the Model X by the end of March, producing between 1,600 and 1,800 Model S and Model X vehicles per week at the Fremont, Calif. assembly plant.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Manufacturing; Vehicles
Location: Norway
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jan 3, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1752911753
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1752911753?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Tesla Rushes to Boost Deliveries of Its SUVs
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Jan 2016: B.3.
ProQuest document link
Abstract:
According to Norwegian television station Web page, VG.no, a Model S owner plugged in his vehicle at a Supercharger on New Year's Day and walked away and the vehicle caught fire.
Full text: Tesla Motors Inc. delivered 17,400 vehicles in the last three months of 2015, the most in a quarter by a wide margin and 75% more than a year earlier as the company rushed to hand over Model X sport-utility vehicles to customers who have been waiting for three years since paying a deposit.
Separately, Tesla is investigating a fire that destroyed a Model S in Norway. According to Norwegian television station Web page, VG.no, a Model S owner plugged in his vehicle at a Supercharger on New Year's Day and walked away and the vehicle caught fire. No one was injured. The Tesla fast-charging system delivers up to 130 kilowatts of direct current, allowing for a speedy charge of the car's large battery.
Tesla achieved its forecast of more than 50,000 vehicles for the year with the burst of deliveries of Model S electric cars and a smattering of 208 Model X SUVs. The company said it produced 507 Model X vehicles in the final quarter of the year and is now producing about 238 Model X vehicles a week. Tesla delivered nearly 50% more vehicles in the quarter than in its next highest quarter.
The fire, which occurred in Tesla's biggest European market, is likely to stoke some concern about Tesla's Supercharger system, which delivers more than twice the power of similar fast-charging systems used by competing car makers.
"We are undergoing a full investigation and will share our findings as soon as possible," a Tesla spokeswoman said. Tesla officials hadn't revealed the cause of the fire by late Saturday night.
Two years ago Tesla installed new shielding under its Model S vehicles after several cars caught fire when they ran over roadway debris and punctured the lithium-ion batteries that sit in a large rectangle under the vehicle. Since then, there haven't been any reported fires.
News of the fire comes just as Tesla is reporting its year-end deliveries, which are monitored closely as the company tries to ratchet up its manufacturing capabilities to match demand.
Tesla's sales got a boost from a burst of deliveries to Europe, where an expiring tax credit in Denmark contributed to the increase in volume. Tesla was able to meet its delivery expectations of 50,000 to 52,000 vehicles. Tesla reports sales globally on a quarterly basis and doesn't break out regions, but a Tesla executive in November acknowledged the Denmark deliveries.
Tesla's Model S and the new Model X SUV, are appealing to a luxury buyer interested in high tech, not simply people trying to avoid buying gasoline. That has helped to drive demand even as the price of gasoline is under $2 a gallon and makes the value proposition of an electric car worse.
Tesla's launch of the Model X was slow during the final three months of the year. The company first delivered the long-awaited SUV to executives and important investors, known as "Founders" and then to "Signature" reservation holders. The latter group had begun placing reservations for the car in the winter of 2012, before the Model S was even delivered.
Credit: By Mike Ramsey
Subject: Sport utility vehicles; Automobile industry; Year in review
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 9175: Western Europe
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Jan 4, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1752964359
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1752964359?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Won't Get a Charge Out of This Electric Car; New Chevy Bolt is the latest example of emerging competition
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Jan 2016: n/a.
ProQuest document link
Abstract:
[...]Tesla produced just 507 of its Model X sport-utility vehicles in the fourth quarter, more than three years after unveiling the concept.
Full text: Tesla Motors should check its rearview mirror.
General Motors on Wednesday unveiled the 2017 Chevrolet Bolt , a pure electric vehicle. GM says the car will be available late this year. The news comes after Ford Motor said last month it plans to invest $4.5 billion in electric cars through 2020.
GM says the Bolt, which will sell for less than $30,000 after tax incentives, has a driving range above 200 miles. While that range is less than that of the luxury Tesla Model S sedan, the Model S costs more than twice as much.
The Bolt's impending arrival raises the stakes for when Tesla unveils a prototype for its mass-market Model 3 sedan in March, which Tesla has said will cost in the range of $35,000. Tesla has had no trouble developing cars that are popular with drivers, but the proliferation of cheaper electric vehicles will further spotlight areas where Tesla has struggled.
One such area is production capability. Tesla chief Elon Musk said on the company's third-quarter earnings call that he hoped for the Model 3 to be available in "about two years." But Tesla produced just 507 of its Model X sport-utility vehicles in the fourth quarter, more than three years after unveiling the concept. With the Bolt entering production later this year and additional competition on the way, Tesla will have to pick up the pace considerably for the Model 3.
Meanwhile, Tesla will have to sell the Model 3 profitably and compete on price. That's a tall order: While only selling luxury cars, which tend to carry higher profit margins, Tesla had free cash flow of negative $1.7 billion in the first nine months of 2015.
And Tesla's valuation--it trades at more than 20 times projected 2019 earnings, according to FactSet--doesn't leave much wiggle room.
Maneuvering around these potholes--while continuing to make cars that consumers want--will be Tesla's toughest test yet.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Automobile industry; Vehicles
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jan 7, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1754196169
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1754196169?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Restricts Autopilot on Residential Streets; Auto maker adds self-parking 'summon' feature
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Jan 2016: n/a.
ProQuest document link
Abstract:
Chief Executive Elon Musk said during a third-quarter conference call that the company would likely update the software in its autopilot system after drivers posted dozens of videos of themselves doing unsafe things, such as getting into the rear seat while the car was operating or reading a book.
Full text: Tesla Motors Inc. implemented restrictions on where it will allow its vehicles to use autopilot after many owners took videos of themselves driving hands-free in dangerous situations.
Tesla, through a software update delivered via the Internet to its vehicles on Saturday, also added a self-parking or "summon" feature that allows the owner to park or fetch his or her vehicle remotely from a distance of up to 39 feet.
Chief Executive Elon Musk said during a third-quarter conference call that the company would likely update the software in its autopilot system after drivers posted dozens of videos of themselves doing unsafe things, such as getting into the rear seat while the car was operating or reading a book.
Under the new update, Tesla's vehicles
won't be able to go into autopilot on residential streets or roads without a center divider . The autopilot also won't be able to exceed the posted speed limit by more than 5 miles per hour.
Tesla added the autopilot feature in October. Tesla's autopilot allows hands- and feet-free driving in everything from stop-and-go traffic to highway speeds, and enabled a car to parallel park itself.
Related
* Ford's Chairman on Quest to Reinvent Company
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* In Detroit, Trucks Take Back Seat
* GM Ignition Trial Set to Begin
Tesla said the autopilot system has been modified to improve steering in common highway driving. The download, for instance, programs the car to recognize upcoming curves and slow the vehicle down into the curve as a human would. In the first iteration, the vehicle maintained the same speed in the curve.
The summon and park feature allows the owner to get out of the vehicle and have the car park itself in tight spaces in a parking lot, or back out of a spot on its own.
Tesla's ability to alter its vehicles through over-the-air software updates remains the biggest feature distinguishing it from its competitors. Other car companies are trying to close the gap, but competitors are only just starting to manage software updates and have been focused on in-car entertainment options.
In addition, Mr. Musk said in a call with reporters Sunday that in the span of 24 to 36 months, he felt it was likely that Tesla would be able to expand the summon capability "coast to coast," as in a person could have their vehicle drive itself from Los Angeles to New York, stopping at charging stations to get electricity on its own and continuing along the route. This of course would require mechanized, automatic charging connections, something Tesla also is working on.
"I might be slightly optimistic on that, but I don't think significantly optimistic that we can do that in two years," Mr. Musk said.
Giving a car that capability will require more cameras and other sensors that aren't available on current vehicles.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Vehicles; Roads & highways; Software upgrading
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jan 10, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1755345273
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1755345273?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Autos: Tesla Restricts Its Autopilot
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Jan 2016: B.4.
ProQuest document link
Abstract:
Chief Executive Elon Musk said during a third-quarter conference call that the company would likely update the software in its autopilot system after drivers posted dozens of videos of themselves doing unsafe things, such as getting into the rear seat while the car was operating or reading a book.
Full text: Tesla Motors Inc. implemented restrictions on where it will allow its vehicles to use autopilot after many owners took videos of themselves driving hands-free in dangerous situations.
Tesla, through a software update delivered via the Internet to its vehicles on Saturday, also added a self-parking or "summon" feature that allows the owner to park or fetch his or her vehicle remotely from a distance of up to 39 feet.
Chief Executive Elon Musk said during a third-quarter conference call that the company would likely update the software in its autopilot system after drivers posted dozens of videos of themselves doing unsafe things, such as getting into the rear seat while the car was operating or reading a book.
Under the new update, Tesla's vehicles won't be able to go into autopilot on residential streets or roads without a center divider. The autopilot also won't be able to exceed the posted speed limit by more than 5 miles per hour.
Tesla added the autopilot feature in October. Tesla's autopilot allows hands- and feet-free driving in everything from stop-and-go traffic to highway speeds, and enabled a car to parallel park itself.
Tesla said the autopilot system has been modified to improve steering in common highway driving.
Credit: By Mike Ramsey
Subject: Speed limits; Vehicles; Roads & highways; Traffic accidents & safety
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2016
Publication date: Jan 11, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1755644164
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1755644164?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Sues German Auto Parts Maker Over Model X Door Delays; Auto maker says Hoerbiger misrepresented ability to design 'falcon wing' doors for SUV
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Jan 2016: n/a.
ProQuest document link
Abstract:
According to the lawsuit, prototypes from Hoerbiger leaked oil and sagged or produced excessive heat, causing them to stop working.
Full text: Tesla Motors Inc. filed a federal lawsuit against a German auto parts maker for allegedly misrepresenting its ability to design the signature "falcon wing" doors on its Model X electric sport-utility vehicle, leading to a last-minute change to a new supplier that caused delays.
The lawsuit, filed in the U.S. District Court of Northern California, aims to stop the supplier, Hoerbiger Automotive Comfort Systems LLC, from demanding more payment from Tesla after the electric-vehicle maker cut ties with the supplier in May 2015. Tesla is asking the court to state that it didn't breach any contracts and to pay damages and attorney fees.
Tesla claims it paid Hoerbiger, which makes hydraulic lift gates, to develop the vertically rising side doors on its Model X after a competition with several other companies. But between February 2014 and May 2015, the company couldn't produce a prototype that passed Tesla's engineering standards.
The falcon wing doors are a signature feature of the Model X, which has a base price of about $81,000 .
According to the lawsuit, prototypes from Hoerbiger leaked oil and sagged or produced excessive heat, causing them to stop working. Hoerbiger couldn't be reached for a response Tuesday afternoon at its offices in Auburn, Ala., and Schongau, Germany.
"We were forced to file this lawsuit after Hoerbiger decided to ignore their contracts with us and instead demanded a large sum of money to which they are not entitled," a Tesla spokeswoman said in an email. "We will vigorously prosecute this case."
According to the lawsuit, Hoerbiger is seeking additional payments from Tesla for the work it says it was promised. Tesla disputes that it owes the company anything more than the $3 million it paid for prototype parts and engineering.
In May 2015, Tesla ditched that company's design and built an electromechanical door system and hired a new supplier, according to the lawsuit.
"Tesla incurred millions of dollars in damages, including, but not limited to costs of re-tooling the entire vehicle in order to support a different engineering solution," the lawsuit said. In addition, Tesla had to pay the new supplier a premium to rush out a workable solution.
Tesla delayed the Model X several times. It was first supposed to be produced in late 2013. In late 2014, Tesla said the vehicle would debut in the first half of 2015, but again it was delayed until late in 2015 , except a handful of vehicles that went to company executives and early investors.
"Model X deliveries are in line with the very early stages of our Model X production ramp as we prioritize quality above all else," the spokeswoman said. "That ramp has been increasing exponentially, with the daily production rate in the last week of the year tracking to production of 238 Model X vehicles per week."
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Litigation; Automobile industry; Vehicles; Product development
Location: Northern California
Company / organization: Name: District Court-US; NAICS: 922110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jan 19, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1758008315
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1758008315?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Auto Parts Supplier Tesla Sued Says it Lived Up To Agreement; Hoerbiger says it was prepared to launch high-volume production
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Jan 2016: n/a.
ProQuest document link
Abstract:
An auto supplier Tesla Motors Inc. sued in U.S. federal court, saying it misrepresented its capabilities to design an actuator for special doors, says its lived up to its agreement and had been prepared to launch high-volume production before the electric car company pulled its contract in May 2015.
Full text: An auto supplier Tesla Motors Inc. sued in U.S. federal court, saying it misrepresented its capabilities to design an actuator for special doors, says its lived up to its agreement and had been prepared to launch high-volume production before the electric car company pulled its contract in May 2015.
Tesla last week sued Hoerbiger Automotive Comfort Systems LLC, saying it couldn't do what it claimed to be able to do in designing actuators for the falcon wing doors on Tesla's Model X SUV. The supplier hadn't commented last week after Tesla filed the lawsuit.
Tesla said that it had to switch to an electromechanical design from the proposed hydraulic design because the prototypes developed by Hoerbiger leaked oil or became overheated and stopped working.
Hoerbiger, which is a subsidiary of a Swiss holding company with a German automotive headquarters, said in a statement Monday that its system met all the requirements.
"Tesla Motors, Inc. repudiated its agreements with Hoerbiger in May 2015. By this point in time, Hoerbiger Automotive Comfort Systems was already fully prepared to begin high-volume production according to Tesla's most current schedule," the statement reads. "Hoerbiger was in compliance with the specifications stipulated by Tesla."
Tesla officials couldn't immediately be reached for comment.
Hoerbiger also said that its work on the actuator wasn't the cause of some of the problems listed by Tesla, including overheating and symmetry problems.
Hoerbiger was attempting to recover from Tesla money for the capital it had invested to build the actuators for the doors, which rise up vertically on the sides of the electric SUV. Tesla sued the supplier in order to get a court to state that it had no right to additional money.
Lawsuits between auto makers and suppliers aren't uncommon. Auto companies even continue to work with suppliers that are suing them and vice versa. In this case, the lawsuit brings to light a reason why the Model X came out behind schedule. Tesla delayed its launch several times. The change of design in May 2015 was only four months before Tesla started production on the vehicle, an unusually short window, particularly for such an important feature of the vehicle.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Litigation; Suppliers
Location: United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jan 25, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1759343990
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1759343990?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Motors Files for a Dealership License in Michigan; Application sets up a potential legal fight over the state's ban on selling cars directly to consumers
Author: Ramse y, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Feb 2016: n/a.
ProQuest document link
Abstract:
The Palo Alto, Calif., electric-car maker filed the application in November for permission to open a dealership and service center in the state, home to top auto makers including General Motors Co. and Ford Motor Co. Michigan's official of the Secretary of State, the agency that handles dealership licenses, has been reviewing the application and recently received more documents from Tesla, said Fred Woodhams, an agency spokesman.
Full text: Tesla Motors Inc. filed an application for a dealership license in Michigan, setting up a potential legal fight over the state's ban on selling cars directly to consumers.
The Palo Alto, Calif., electric-car maker filed the application in November for permission to open a dealership and service center in the state, home to top auto makers including General Motors Co. and Ford Motor Co.
Michigan's official of the Secretary of State, the agency that handles dealership licenses, has been reviewing the application and recently received more documents from Tesla, said Fred Woodhams, an agency spokesman. He said it would take another month or more to rule on the application.
Michigan about a year ago passed a law prohibiting car makers from selling directly to customers in the state without an independent dealer as an intermediary. Tesla has opposed such dealer-franchise laws, calling them anticompetitive. Tesla allows customers to order vehicles directly from the company, something that other manufacturers are prohibited from doing.
A formal denial of its application by Michigan could prompt Tesla to pursue additional legal avenues to fight a law it calls "very harmful."
"Tesla is committed to being able to serve its customers in Michigan and is working with the legislature to accomplish that. The existing law in Michigan is very harmful to consumers," a Tesla spokeswoman said. "Tesla will take all appropriate steps to fix this broken situation."
The Federal Trade Commission on Jan. 19 sponsored a day-long series of panel discussions about automotive retailing with much of the focus on Tesla and Elio Motors Inc., another company aiming to sell cars directly to customers. Phoenix-based Elio is developing a three-wheeled, single-occupant vehicle it claims will go 84 miles on a gallon of gasoline.
Daniel Goldberg, a lawyer in the Boston office of Morgan, Lewis & Bockius LLP, said at that meeting dealer-franchise laws that prohibit direct sales could potentially be challenged as unconstitutional. Tesla previously has argued that such laws run afoul of Congress's constitutional power to regulate interstate commerce.
Tesla several years ago said it would consider a federal lawsuit to resolve the issue if it couldn't come to an arrangement with individual states . It has fought battles in nearly every state in the U.S. with associations that represent car dealers. These associations have supported legislation that aims to prevent Tesla from selling vehicles directly to consumers. They also have fought to keep on the books existing laws that prevent Tesla from running its own dealerships.
In some cases, lawmakers have come to a compromise with Tesla where they have banned all other companies from selling directly, but have allowed Tesla to have a limited number of manufacturer-owned dealerships.
Michigan, along with Texas, is among a small group of states that have a flat prohibition on any direct sales . The laws were created to prevent car makers from building their own stores that would then compete with independent dealerships.
Michigan Automotive Dealers Association couldn't immediately be reached for comment.
Such competition could potentially undercut independent dealerships' prices and undermine investments made in their stores, according to lawyers and economists who have scrutinized dealer-franchise laws.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile dealers; Vehicles; Interstate commerce
Location: Michigan Palo Alto California
Company / organization: Name: Congress; NAICS: 921120; Name: Morgan Lewis & Bockius; NAICS: 541110; Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Federal Trade Commission--FTC; NAICS: 926150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 1, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1761575726
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1761575726?accountid= 7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Motors Files for a Dealership License in Michigan; Application sets up a potential legal fight over the state's ban on selling cars directly to consumers
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Feb 2016: n/a.
ProQuest document link
Abstract:
The Palo Alto, Calif., electric-car maker filed the application in November for permission to open a dealership and service center in the state, home to top auto makers including General Motors Co. and Ford Motor Co. Michigan's office of the Secretary of State, the agency that handles dealership licenses, has been reviewing the application and recently received more documents from Tesla, said Fred Woodhams, an agency spokesman.
Full text: Tesla Motors Inc. filed an application for a dealership license in Michigan, setting up a potential legal fight over the state's ban on selling cars directly to consumers.
The Palo Alto, Calif., electric-car maker filed the application in November for permission to open a dealership and service center in the state, home to top auto makers including General Motors Co. and Ford Motor Co.
Michigan's office of the Secretary of State, the agency that handles dealership licenses, has been reviewing the application and recently received more documents from Tesla, said Fred Woodhams, an agency spokesman. He said it would take a month or more to rule on the application.
At the same time, Tesla has been busy lobbying Michigan legislators to change the law to allow direct sales by companies selling electric vehicles. A bill is expected to be introduced on Tuesday in Michigan by Rep. Aaron Miller, said Diarmuid O'Connell, vice president of business development for the company.
About a year ago, Michigan passed a law prohibiting car makers from selling directly to customers in the state without an independent dealer as an intermediary. Tesla has opposed such dealer-franchise laws, calling them anticompetitive. Tesla allows customers to order vehicles directly from the company, something that other manufacturers are prohibited from doing.
A formal denial of its application by Michigan could prompt Tesla to pursue additional legal avenues to fight a law it calls "very harmful."
"Tesla is committed to being able to serve its customers in Michigan, and is working with the legislature to accomplish that. The existing law in Michigan is very harmful to consumers," a Tesla spokeswoman said. "Tesla will take all appropriate steps to fix this broken situation."
The Federal Trade Commission on Jan. 19 sponsored a day-long series of panel discussions about automotive retailing, with much of the focus on Tesla and Elio Motors Inc., another company aiming to sell cars directly to customers. Phoenix-based Elio is developing a three-wheeled, single-occupant vehicle it claims will go 84 miles on a gallon of gasoline.
Daniel Goldberg, a lawyer in the Boston office of Morgan, Lewis & Bockius LLP, said at that meeting dealer-franchise laws that prohibit direct sales could potentially be challenged as unconstitutional. Tesla previously has argued that such laws run afoul of Congress's constitutional power to regulate interstate commerce.
Tesla several years ago said it would consider a federal lawsuit to resolve the issue if it couldn't come to an arrangement with individual states . It has fought battles in nearly every state in the U.S. with associations that represent car dealers. These associations have supported legislation that aims to prevent Tesla from selling vehicles directly to consumers. They also have fought to keep on the books existing laws that prevent Tesla from running its own dealerships.
In some cases, lawmakers have come to a compromise with Tesla where they have banned all other companies from selling directly, but have allowed Tesla to have a limited number of manufacturer-owned dealerships.
Tesla's Mr. O'Connell said his preference is for the issue to be settled through legislation and not in court. However, he said, "we are exploring every other option available to us to open up a critical market for us."
Michigan and Texas are among a small group of states that have a flat prohibition on any direct sales . The laws were created to prevent car makers from building their own stores that would then compete with independent dealerships. Michigan Automotive Dealers Association couldn't immediately be reached for comment.
Such competition could potentially undercut independent dealerships' prices and undermine investments made in their stores, according to lawyers and economists who have scrutinized dealer-franchise laws.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile dealers; Litigation; Law; Vehicles; Automobile sales
Location: Michigan Palo Alto California
People: O Connell, Diarmuid Miller, Aaron
Company / organization: Name: Congress; NAICS: 921120; Name: Morgan Lewis & Bockius; NAICS: 541110; Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Federal Trade Commission--FTC; NAICS: 926150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 2, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1761574229
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1761574229?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
WSJ.D Technology: Tesla Seeks License to Sell Cars in Michigan
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Feb 2016: B.4.
ProQuest document link
Abstract:
The Palo Alto, Calif., electric-car maker filed the application in November for permission to open a dealership and service center in the state, home to top auto makers including General Motors Co. and Ford Motor Co. Michigan's office of the Secretary of State, the agency that handles dealership licenses, has been reviewing the application said Fred Woodhams, an agency spokesman.
Full text: Tesla Motors Inc. filed an application for a dealership license in Michigan, setting up a potential legal fight over the state's ban on selling cars directly to consumers.
The Palo Alto, Calif., electric-car maker filed the application in November for permission to open a dealership and service center in the state, home to top auto makers including General Motors Co. and Ford Motor Co.
Michigan's office of the Secretary of State, the agency that handles dealership licenses, has been reviewing the application said Fred Woodhams, an agency spokesman.
Tesla has been busy lobbying Michigan legislators to change the law to allow direct sales of electric vehicles. A bill is expected to be introduced Tuesday in Michigan by Rep. Aaron Miller, said Diarmuid O'Connell, Tesla's vice president of business development.
About a year ago, Michigan passed a law prohibiting car makers from selling directly to customers in the state without an independent dealer as an intermediary. Tesla has opposed such dealer-franchise laws, calling them anticompetitive. Tesla allows customers to order vehicles directly from the company, something that other manufacturers are prohibited from doing.
A formal denial of its application by Michigan could prompt Tesla to pursue additional legal avenues to fight a law it calls "very harmful."
"Tesla is committed to being able to serve its customers in Michigan, and is working with the legislature to accomplish that. The existing law in Michigan is very harmful to consumers," a Tesla spokeswoman said. "Tesla will take all appropriate steps to fix this broken situation."
The Federal Trade Commission on Jan. 19 sponsored a day-long series of panel discussions about automotive retailing,with much of the focus on Tesla and Elio Motors Inc., another company aiming to sell cars directly to customers. Phoenix-based Elio is developing a three-wheeled, single-occupant vehicle
Daniel Goldberg, a lawyer in the Boston office of Morgan, Lewis & Bockius LLP, said at that meeting dealer-franchise lawsthat prohibit direct sales could potentially be challenged as unconstitutional. Tesla previously has argued that such laws run afoul of Congress's constitutional power to regulate interstate commerce.
Tesla several years ago said it would consider a federal lawsuit to resolve the issue if it couldn't come to an arrangement with individual states. It has fought battles in nearly every state in the U.S. with associations that represent car dealers. These associations have supported legislation that aims to prevent Tesla from selling vehicles directly to consumers. They also have fought to keep on the books existing laws that prevent Tesla from running its own dealerships.
Mr. O'Connell said he prefers the issue to be settled through legislation. He added, "we are exploring every other option available to us."
Michigan and Texas are among a small group of states that have a flat prohibition on any direct sales. The laws were created to prevent car makers from building their own stores that would compete with independent dealerships. Such competition could potentially undercut independent dealerships' prices and undermine investments, according to lawyers and economists who have scrutinized dealer-franchise laws.
Michigan Automotive Dealers Association couldn't be reached for comment.
Credit: By Mike Ramsey
Subject: Automobile dealers; Litigation; Law; Vehicles; Licensing
Location: Michigan
Company / organization: Name: Federal Trade Commission--FTC; NAICS: 926150; Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry; 4310: Regulation
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2016
Publication date: Feb 2, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: Eng lish
Document type: News
ProQuest document ID: 1761609049
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1761609049?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Earnings: What to Watch; Focus will be on the electric auto maker's Model X and its next car, the Model 3
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Feb 2016: n/a.
ProQuest document link
Abstract:
The Chinese government is offering big incentives for electric vehicles that make that market the most important for EVs in the world. Since those rules favor local producers, Tesla may talk about whether expanding production in China with a joint-manufacturing partner is in the cards (much like larger auto makers have done).
Full text: Tesla Motors Inc.'s fourth quarter results will be released after the bell Wednesday. Here's what you need to know:
EARNINGS FORECAST: Tesla is expected to post an operating profit of 16 cents a share according to analysts polled by FactSet, compared with a loss of 13 cents a share reported in the fourth quarter of 2014. Higher volumes from the Model S sedan helped to mute the costs related to a slow launch of the Model X sport-utility vehicle. Tesla has posted only one profitable quarter on the basis of Generally Accepted Accounting Principles.
REVENUE FORECAST: Revenue is forecast to rise 64% to $1.79 billion for the fourth quarter as vehicle deliveries rose to 17,400, a 75% increase over the same period a year ago. Sales are closely watched given the amount of cash needed to run an auto company and the expectation that more scale will aid Tesla's business.
WHAT TO WATCH:
MODEL X: Tesla was building about 250 Model Xs a week as of the end of December, far short of the approximately 800 it aims to ramp up to. Achieving full production will be important in meeting hot demand for the SUV and stanching cash outflows, but analysts have seen hiccups with the Model X as reason for concern.
SHARES: Tesla's stock had been among the auto industry's hottest, even as falling gasoline prices crimped demand for the broader electric-vehicle market. A combination of factors--including plans by competitors to directly take on Tesla and heightened concerns about U.S. auto demand and the global economy--have hit Tesla shares in 2016. The stock has fallen 30% over the course of 2016, hitting $157.74 last week, representing a fresh 52-week nadir. In a note to investors Monday, Credit Suisse analyst Dan Galves said "repeated underestimation of Tesla's ability to deliver" is overblown and the current price represents an opportunity.
MODEL 3: Chief Executive Elon Musk is on the hook to debut the company's next car, the Model 3, by the end of March and details of that product are likely to be disclosed during the earnings conference call that takes place at 5:30 p.m. EST. This vehicle, slated to start at $35,000 with a 200-mile electric range, is necessary if Mr. Musk is going to reach his longer-term volume goals.
POWERWALL: It has been nearly a year since Tesla announced the creation of a stationary storage business that could eventually help the company reach sustainable profitability. Production of the first battery packs were slated to begin at the company's new factory in Nevada, and an update on output and customer backlog will be closely watched. Mr. Musk has projected solid demand.
CHINA: The Chinese government is offering big incentives for electric vehicles that make that market the most important for EVs in the world. Since those rules favor local producers, Tesla may talk about whether expanding production in China with a joint-manufacturing partner is in the cards (much like larger auto makers have done).
GIGAFACTORY: Tesla's giant battery factory near Reno, Nev., is closely watched and the company's previously-disclosed timetable raises questions. Is the company ready to start producing cells? Is it on track to make batteries for the Model 3?
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Financial performance; Corporate profits
Company / organization: Name: Credit Suisse Group; NAICS: 522110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 8, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1762970235
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1762970235?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla's Fourth-Quarter Loss Nearly Triples; Full-year 2015 loss widens to $889 million from $294 million in 2014
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Feb 2016: n/a.
ProQuest document link
Abstract:
Luxury electric car maker Tesla Motors Inc. said its fourth-quarter net loss nearly tripled to $320.4 million as the costs of launching its Model X sport-utility vehicle led to an 11th consecutive quarterly loss.
Full text: Luxury electric car maker Tesla Motors Inc. said its fourth-quarter net loss nearly tripled to $320.4 million as the costs of launching its Model X sport-utility vehicle led to an 11th consecutive quarterly loss.
Wall Street had expected a slim operating profit for the quarter excluding stock-based compensation and lease accounting. It reported an operating loss of $113.9 million, or 87 cents a share.
Investors bid up the shares in after-hours trading. The stock jumped nearly 9% in after-hours trading after closing down $4.58 at $143.67 in 4 p.m. Nasdaq trading on Wednesday. It released results after 4 p.m.
"We expect positive cash flow starting next month and continuing to 2Q and beyond," said Chief Executive Officer Elon Musk.
The stock gained as Tesla affirmed plans to sell its next-generation Model 3 electric car by the end of 2017, and said it would be producing nearly 1,000 a week of its $81,000 and up Model X SUV by the end of March.
Overall, Tesla said it could build up to 90,000 vehicles overall this year, which would be about 80% higher than its 2015 production.
The Palo Alto, Calif.-based company said it could achieve a net profit in the final quarter of 2016 and could post an operating profit for the full year including adjustments. Wall Street forecasts an adjusted profit of $1.71 a share, or about $224 million, this year.
Tesla's fourth quarter revenue rose 27% to $1.21 billion from $956.6 million a year earlier. That increase came as deliveries of its new vehicles jumped 76% in the quarter ended Dec. 31. Its full year net loss was $889 million on revenue of $4.05 billion.
The auto maker projected that it would become net cash flow positive for the year after investing $1.5 billion in capital expenses, a figure slightly lower than the $1.6 billion it invested in 2015. Tesla's supply of cash on hand fell to $1.2 billion at year end, down from $1.4 billion at the end of the third quarter.
Tesla had been burning cash a rate of more than $400 million a quarter for more than a year as its spending ramped up and deliveries of the Model X hadn't begun. With the fourth quarter's revenue gains, Tesla generated about $179 million in cash from operations in the quarter even as capital spending of $411 million dragged down its cash.
Tesla's results suggested its used car business is starting to have an impact. Used vehicle revenues are included in its general services category, which jumped 47% to $97 million in the quarter.
Tesla said it intentionally slowed production of the Model X in January to improve quality. Tesla delivered just 206 Model X SUVs last quarter.
Tesla said its investments in the machinery required to build the lower cost Model 3 will begin this year. It stuck to its forecast of production beginning late next year. Tesla plans to show on March 31 a prototype of the vehicle, which are expected to start at $35,000 and drive at least 200 miles on a single charge.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Net losses; Automobile industry; Financial performance; Cash flow; Vehicles; Capital expenditures; NASDAQ trading
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 10, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1764220578
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1764220578?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla's Fourth-Quarter Loss Nearly Triples; Full-year 2015 loss widens to $889 million from $294 million in 2014
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Feb 2016: n/a.
ProQuest document link
Abstract:
Luxury electric car maker Tesla Motors Inc. said its fourth-quarter net loss nearly tripled to $320.4 million as the costs of launching its Model X sport-utility vehicle led to an 11th consecutive quarterly loss.
Full text: Luxury electric car maker Tesla Motors Inc. said its fourth-quarter net loss nearly tripled to $320.4 million as the costs of launching its Model X sport-utility vehicle led to an 11th consecutive quarterly loss.
However, Tesla held to a strong sales forecast in 2016 and the 2017 launch of its next product, giving investors something to cheer.
The stock jumped nearly 9% in after-hours trading after closing down $4.58 at $143.67 in 4 p.m. Nasdaq trading on Wednesday. It released results after 4 p.m.
Wall Street had expected a slim operating profit for the quarter excluding stock-based compensation and lease accounting. It reported an operating loss of $113.9 million, or 87 cents a share.
"I feel very good about things right now," said Chief Executive Officer Elon Musk in a call after the earnings. Mr. Musk said the company has moved past a difficult period and is set for smoother times. "The last several months have been quite excruciating, really."
The stock gained as Tesla affirmed plans to sell its next-generation Model 3 electric car by the end of 2017, and said it would be producing nearly 1,000 a week of its $81,000 and up Model X SUV by the end of March.
Related
* Tesla Motors Files for a Dealership License in Michigan (Feb. 1)
* Tesla's Biggest Bull Slashes His Price Target by More than $100 (Feb. 1)
* Tesla Model X Delay: Not Just the Doors (Jan. 20)
Overall, Tesla said it could build up to 90,000 vehicles overall this year, which would be about 80% higher than its 2015 production.
The Palo Alto, Calif.-based company said it could achieve a net profit in the final quarter of 2016 and post an operating profit for the full year including adjustments. Wall Street forecasts an adjusted profit of $1.71 a share, or about $224 million, this year.
Tesla's fourth quarter revenue rose 27% to $1.21 billion from $956.6 million a year earlier as deliveries of its new vehicles jumped 76% in the quarter. Its full year net loss was $889 million on revenue of $4.05 billion.
The auto maker projected that it would become net cash flow positive for the year after investing $1.5 billion in capital expenses, a figure slightly lower than the $1.6 billion it invested in 2015. Tesla's supply of cash on hand fell to $1.2 billion at year end, down from $1.4 billion at the end of the third quarter.
Tesla had been burning cash a rate of more than $400 million a quarter for more than a year as its spending ramped up and deliveries of the Model X hadn't begun. With the fourth quarter's revenue gains, Tesla generated about $179 million in cash from operations in the quarter even as capital spending of $411 million dragged down its cash.
Chief Financial Officer Jason Wheeler said his marching orders were to maintain or increase cash. The company's increase in net cash for the year will include taking some money from a recently expanded asset-backed line of credit.
Tesla's results suggested its used car business is starting to have an impact. Used vehicle revenues are included in its general "services" category, which jumped 47% to $97 million in the quarter.
Tesla said it intentionally slowed production of the Model X in January to improve quality. Tesla delivered just 206 Model X SUVs last quarter.
Tesla said its investments in the machinery required to build the lower cost Model 3 will begin this year. It stuck to its forecast of production beginning late next year. Tesla plans to show on March 31 a prototype of the vehicle, which are expected to start at $35,000 and drive at least 200 miles on a single charge.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Net losses; Automobile industry; Financial performance; Corporate profits; Vehicles; Capital expenditures; NASDAQ trading
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 11, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1764229406
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1764229406?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Earnings: Why They Aren't Built for Speed; Lofty forecasts gave Tesla stock a big boost, but bringing hopes to fruition will be much trickier
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Feb 2016: n/a.
ProQuest document link
Abstract:
Free cash flow, defined as operating cash flow less capital expenditures, was once again negative in the quarter, to the tune of $441 million.
Full text: An upbeat forecast sparked a sharp rally in Tesla shares after the market's close Wednesday. But fourth-quarter results suggest Tesla Motors' race against the clock is actually becoming more urgent.
The electric-automobile upstart reported fourth-quarter revenue of $1.75 billion and a loss per share of $2.44. While those figures were short of analysts' expectations, the stock was nearly 12% higher in after-hours trading.
One reason: Tesla is maintaining its delivery target of 80,000 to 90,000 vehicles this year. Plus, the company said it expects "moderate" profitability according to generally accepted accounting principles by the fourth quarter of 2016.
The upbeat delivery forecast aside, Tesla's
pattern of burning cash continued apace. While the company highlighted a seemingly flattering non-GAAP cash-flow figure, the figures investors typically look to weren't so favorable. Free cash flow, defined as operating cash flow less capital expenditures, was once again negative in the quarter, to the tune of $441 million.
Tesla now has burned $2.9 billion in the past six quarters and has just $1.2 billion in cash and equivalents left on its balance sheet. Meanwhile, Tesla expects $1.5 billion in capital expenditure this year, although it did say it wouldn't need to raise any additional cash to meet forecasts.
Investors have long been happy to endure production hiccups and cash burn in anticipation of future riches. But that mentality has been tossed aside as the stock market has soured: Tesla was down nearly 40% this year before the earnings report.
And operational issues become more important given the high stakes for the Model 3 sedan, Tesla's more affordable car. Tesla still is planning to unveil the Model 3, which bulls expect will lift the company to profitability, on March 31. Vehicle deliveries are expected to begin in late 2017.
Yet competition is intensifying. Chevrolet, to name one, has unveiled a competing product that will be available a year earlier.
The pressure on CEO Elon Musk to stay on schedule and on budget--never before Tesla's strong suit --is only going to grow.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Cash flow; Financial performance; Investments; Capital expenditures
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 11, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1764229430
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1764229430?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Earnings: Tesla Quarterly Loss Widens --- Electric car-maker's revenue jumps 27% but costs of Model X overshadow sales gain
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Feb 2016: B.5.
ProQuest document link
Abstract:
Luxury electric car maker Tesla Motors Inc. said its fourth-quarter net loss nearly tripled to $320.4 million as the costs of launching its Model X sport-utility vehicle led to an 11th consecutive quarterly loss.
Full text: Luxury electric car maker Tesla Motors Inc. said its fourth-quarter net loss nearly tripled to $320.4 million as the costs of launching its Model X sport-utility vehicle led to an 11th consecutive quarterly loss.
However, Tesla held to a strong sales forecast in 2016 and the 2017 launch of its next product, giving investors something to cheer.
The stock jumped nearly 9% in after-hours trading after closing down $4.58 at $143.67 in 4 p.m. Nasdaq trading on Wednesday. It released results after 4 p.m.
Wall Street had expected a slim operating profit for the quarter excluding stock-based compensation and lease accounting. It reported an operating loss of $113.9 million, or 87 cents a share.
"I feel very good about things," said Chief Executive Officer Elon Musk in a call after the earnings. Mr. Musk said the company has moved past a difficult period and is set for smoother times. "The last several months have been quite excruciating, really."
Shares gained as Tesla affirmed plans to sell its next-generation Model 3 electric car by the end of 2017, and said it would be producing nearly 1,000 a week of its $81,000 and up Model X SUV by the end of March.
Overall, Tesla said it could build up to 90,000 vehicles overall this year, which would be about 80% higher than its 2015 production.
The Palo Alto, Calif.-based company said it could achieve a net profit in the final quarter of 2016 and post an operating profit for the full year including adjustments. Wall Street forecasts an adjusted profit of $1.71 a share, or about $224 million, this year.
Tesla's fourth quarter revenue rose 27% to $1.21 billion from $956.6 million a year earlier as deliveries of its new vehicles jumped 76% in the quarter. Its full year net loss was $889 million on revenue of $4.05 billion.
The auto maker projected that it would become net cash flow positive for the year after investing $1.5 billion in capital expenses, a figure slightly lower than the $1.6 billion it invested in 2015. Tesla's supply of cash on hand fell to $1.2 billion at year end, down from $1.4 billion at the end of the third quarter.
Tesla had been burning cash a rate of more than $400 million a quarter for more than a year as its spending ramped up and deliveries of the Model X hadn't begun. With the fourth quarter's revenue gains, Tesla generated about $179 million in cash from operations in the quarter even as capital spending of $411 million dragged down its cash.
Chief Financial Officer Jason Wheeler said his marching orders were to maintain or increase cash. The company's increase in net cash for the year will include taking some money from a recently expanded asset-backed line of credit.
Tesla's results suggested its used car business is starting to have an impact. Used vehicle revenues are included in its general "services" category, which jumped 47% to $97 million in the quarter.
Credit: By Mike Ramsey
Subject: Net losses; Automobile industry; Financial performance; Vehicles; Capital expenditures
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 9190: United States; 8680: Transportation equipment industry; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2016
Publication date: Feb 11, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1764279839
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1764279839?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyrig ht owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Fights GM-Backed Effort to Halt Direct-to-Consumer Sales in Indiana; Lawmakers are reviewing legislation that would end direct sales through company-owned stores at the end of 2017
Author: Ramsey, Mike; Gautham Nagesh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Feb 2016: n/a.
ProQuest document link
Abstract:
Tesla has in multiple states fought initiatives backed by auto-dealer associations to push through legislation that prohibits direct-to-consumer sales.
Full text: Tesla Motors Inc. is fighting a new effort by a state legislature to halt its direct-to-consumer sales, but this time it's General Motors Co. pushing the legislation.
Indiana's Senate Commerce and Technology Committee is reviewing legislation that would end Tesla's ability to sell to consumers through company-owned stores at the end of 2017. The amendment to the bill was sponsored by Sen. Luke Kenley, a Harvard University-trained lawyer who represents Hamilton County.
Tesla says that GM, which testified in a public hearing on Jan. 27 to support the amendment, is behind the push. GM has taken an increasingly active role in trying to block Tesla from operating company-owned stores instead of relying on independent dealers. GM also supported a Michigan law passed in 2014 that blocked Tesla from operating in the state.
Related
* Tesla's Fourth-Quarter Loss Nearly Triples (Feb. 10)
* Tesla Motors Files for a Dealership License in Michigan (Feb. 1)
* Tesla Model X Delay: Not Just The Doors (Jan. 20)
A GM spokesman said GM supports the amendment.
"GM believes that all industry participants should operate under the same rules and requirements on fundamental issues that govern how we sell, service and market our products," spokesman Chris Meagher said via email.
GM is set to launch an electric car called the Chevrolet Bolt late this year that is expected to represent competition for Tesla's forthcoming Model 3 electric sedan.
Tesla has in multiple states fought initiatives backed by auto-dealer associations to push through legislation that prohibits direct-to-consumer sales. In Michigan, Tesla has applied for a dealership license even though the state's laws prohibit car makers from selling directly to customers. Tesla has said the denial of this application may prompt it to file a federal lawsuit challenging the Michigan law.
Tesla's chief counsel, Todd Maron, said recently at a Federal Trade Commission panel that GM was the only major auto maker that appeared to oppose its efforts. At the same time, a panel of economists unanimously said the laws prohibiting Tesla from selling direct served no purpose other than to attempt to protect existing dealers from competition.
Indiana's state Senate Commerce and Technology Committee is scheduled to hear the amendment on Thursday. If the committee approves it, it would then proceed to the House of Representatives, where the bill originated.
Credit: By Mike Ramsey and Gautham Nagesh
Subject: Legislation; Committees; Operating companies; Bills
Location: Indiana Michigan
Company / organization: Name: House of Representatives; NAICS: 921120; Name: Federal Trade Commission--FTC; NAICS: 926150; Name: Harvard University; NAICS: 611310; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 25, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1767805468
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1767805468?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Motors Fends Off Indiana Effort to Hinder Direct-Sales Methods; State Senate committee removes language potentially affecting electric-car maker from pending legislation
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Feb 2016: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. staved off an effort in Indiana to end its ability to sell directly to consumers after a state Senate committee removed language in pending legislation that would have affected the California-based electric-car maker.
Full text: Tesla Motors Inc. staved off an effort in Indiana to end its ability to sell directly to consumers after a state Senate committee removed language in pending legislation that would have affected the California-based electric-car maker.
Tesla's direct-sales methodology has been under attack by auto dealers for several years and more recently Detroit-based General Motors Co. has taken up the lobbying effort against Tesla. The legislation had been promoted by GM and local auto dealers.
Related
* Tesla Motors Files for a Dealership License in Michigan (Feb. 1)
* Tesla, Cuomo Cut Deal to Keep N.Y. Stores (March 28, 2014)
* Tesla to Stop Selling Electric Cars in New Jersey (March 11, 2014)
The amendment to the Indiana Senate bill would have caused Tesla to forfeit its license to sell direct to consumers 30 months after its original issuance, which would be at the end of 2017. Under the state's existing law, sellers of electric vehicles can sell directly to consumers without independent dealerships.
The bill itself, dealing with auto-dealer licensing and regulation, had little to do with direct-sales methods and had originated in the state's House of Representatives. That bill remains under discussion.
"Existing Indiana law supports free markets by providing a level playing field for all manufacturers," said Tesla General Counsel Todd Maron, who thanked the Indiana senators who removed the language.
Auto dealers, having expressed fears that Tesla's direct-to-consumer model could encourage existing manufacturers to try to cut them out of the sales process, have been trying to force Tesla to sell through independent dealers .
Tesla has had to wage battles in nearly every state to be able to sell vehicles through company-owned stores.
GM, for its part, says it wants Tesla to have to operate under the same restraints that it does in regards to using independent dealers. State franchise laws usually prevent manufacturers that already have independent franchisees from operating their own manufacturer-owned stores.
"We will continue to work on this issue in Indiana and nationally and will continue to express our concern anywhere we find market participants are operating under different rules," GM said in a statement.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile dealers; State laws; Bills
Location: Michigan Indiana New Jersey
Company / organization: Name: House of Representatives; NAICS: 921120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 25, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768001407
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768001407?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Voters Should Be Mad at Electric Cars; If Trump and Sanders fans hate absurd handouts to elites, the Tesla economy is the place to look.
Author: Jenkins, Holman W, Jr
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Mar 2016: n/a.
ProQuest document link
Abstract:
[...]here's a problem: GM and other established car makers, under Obama fuel-mileage rules, increasingly also need to churn out electric cars in order to keep selling the pickups and SUVs that earn their profits.
Full text: How much subsidy is flowing to electric cars these days? An accidental experiment in California might open some eyes. California awards carpool-lane privileges to electric cars, but thanks to a legislative lapse ran out of the green stickers for plug-in hybrids. A local Ford dealer tells us that late-model hybrids with the sticker now fetch a $3,000 premium over the identical car without the sticker.
By the way, this merely confirms an earlier finding by Audatex, a company that serves the auto-insurance industry, that stickers added as much as $1,500 to the value of used non-pluggable hybrids after eligibility was removed from those far more numerous cars.
And $3,000 is a drop in the bucket. The grossest handout, obviously, is the federal tax credit for buyers of $7,500. Additional rebates are available in many states ($2,500 in California, $6,000 in Colorado), not to mention further handouts for installation of home chargers.
Then toss in resalable ZEV credits, for zero-emissions vehicles, under rules in California and nine other states, whose value the Los Angeles Times in 2013 pegged at $35,000 per car in states that account for at least one-third of Tesla's U.S. sales.
When averaged over Tesla's total U.S. sales, the combined subsidies amount to $20,000 per car, and in California upward of $45,000. And for what purpose? Electricity, in America, is largely produced from fossil fuels. If the electric system were somehow converted to renewables, then it wouldn't matter how we powered our cars, because passenger cars account for less than 8% of global greenhouse emissions.
But then arguments have nothing to do with it. "Up with electric cars" is a slogan that you can pick the public's pocket with.
This month Tesla will unveil its Model 3, its car for the middle class, retailing for $35,000--or considerably less than the value of its explicit and implicit subsidies in many states. And don't kid yourself that Elon Musk, Tesla's billionaire impresario, doesn't price his cars to make sure the full value of these handouts flows through the buyer's pocket to Tesla's top line.
One sales prediction we can make with confidence. Tesla is expected to sell its 200,000th U.S. car sometime in 2018, and that sale will fall on or very near the first day of a calendar quarter. How do we know? Under current law, federal tax credits for a given manufacturer begin phasing out two calendar quarters after the quarter in which eligible output tops 200,000.
And you wonder why, on some level, voters sense that our political class has led America into a dead-end where the only people doing well are the ones who have subsidies, regulation and political influence stacked in their favor.
The Kauffman Foundation, in a recent study of waning American entrepreneurship, listed "incumbent protection" as a factor. So a pregnant but almost undiscussed question is whether the federal tax rebate will really be allowed to lapse, and whether Tesla's business model can survive it.
Tesla's cars have status cachet, yes. Even middle-class customers might be attracted, notwithstanding low gas prices, as long as helped by an enormous dollop of taxpayer favoritism.
But here's a problem: GM and other established car makers, under Obama fuel-mileage rules, increasingly also need to churn out electric cars in order to keep selling the pickups and SUVs that earn their profits. GM can't survive unless it makes and sells electric cars at a loss, whereas Tesla can't survive unless it sells them at a profit.
A conclusion flows inescapably, especially if the direct tax rebates to buyers go away: The highest, best value of Tesla's brand can be realized only if Tesla sells itself to a pickup truck maker--or buys one.
Of course this has occurred to Tesla--sort of. In a speech in Detroit last year, Tesla Vice President Diarmuid O'Connell proposed that conventional car makers farm out to Tesla the job of making electric "compliance vehicles" for them.
Is this really what American capitalism has come to? Electric-car fans, of course, recognize their vulnerability to the public waking up to the absurdity of their subsidy regime. So do investors. Maybe that's why, after falling for five months, Tesla's stock price turned sharply up the day after the New Hampshire primary.
The New Hampshire outcome, recall, showed Donald Trump dominating the GOP nomination race and suggested to many onlookers that the chances of a Democratic successor to President Obama had materially improved. Indeed, nothing else makes sense when you consider how thoroughly Tesla's business model depends on taxpayer largess.
Credit: By Holman W. Jenkins, Jr.
Subject: Automobile sales; Automobile industry; Electric vehicles
Location: United States--US California
People: Musk, Elon
Company / organization: Name: Los Angeles Times; NAICS: 511110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 11, 2016
column: Business World
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772380844
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772380844?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission o f copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla: How Uncle Sam May Cause Sticker Shock; New Model 3 might be a tougher sell as tax benefits for buyers roll off
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Mar 2016: n/a.
ProQuest document link
Abstract:
According to the Internal Revenue Service, the credit starts to shrink once a manufacturer sells 200,000 cars for use in the U.S. After that, future cars sold are eligible for half the tax credit for two quarters, and 25% for two quarters after that before vanishing altogether.
Full text: Expectations are sky-high for Tesla Motors' new Model 3 mass-market car to be unveiled Thursday. That presents the stock with its toughest test yet.
The premium valuation Tesla shares fetch versus more established rivals is largely due to investors' vision of affordable electric cars generating outsize revenue growth and, in turn, major profits. To get there, Tesla needs to achieve economies of scale that lead to profits and the Model 3 is central to that. But the target market for this model is far more price sensitive than for earlier, luxury Tesla products. Given that, tax incentives will play an important role.
The problem: the more popular Tesla's car becomes, the quicker the company might hit a point where certain incentives diminish or disappear. That, in turn, could crimp sales.
Details on most key features of the Model 3 are scant, but Tesla has said the base model will start at $35,000 before tax incentives. Those incentives are a big deal for buyers . The standard federal electric-vehicle tax credit amounts to a $7,500 rebate. Some states offer more perks on top of that.
These incentives could make the Model 3 cost comparable to more popular vehicles powered by internal combustion.
But actually receiving the Model 3 at this advantageous price isn't straightforward. One reason: that federal credit won't be available to new car buyers forever. According to the Internal Revenue Service, the credit starts to shrink once a manufacturer sells 200,000 cars for use in the U.S. After that, future cars sold are eligible for half the tax credit for two quarters, and 25% for two quarters after that before vanishing altogether. That will push car prices higher.
Hitting that milestone is inevitable should Tesla grow at the rate Chief Executive Elon Musk expects. If past geographic sales patterns hold up, Tesla could be more than halfway toward the threshold by the end of this year. And the Model 3 won't be a regular sight on the roads soon, regardless of how much excitement Tesla generates on Thursday.
Tesla says it expects production and deliveries of the Model 3 to begin late in 2017. Meanwhile, existing product sales would push Tesla closer to the threshold, leaving fewer Model 3 buyers eligible for the full subsidy. Past product launches, such as the Model X sport-utility vehicle, faced yearslong delays.
Meanwhile, a rash of electric car competition from established manufacturers is set to come online in the next few years; those cars will generally be eligible for the subsidy.
The subsidy, which has been a selling advantage for Tesla, then would become a relative disadvantage. Tesla says customers will have up-to-date information about tax incentives when it comes time to actually buy the car. Then, too, the law could be changed to Tesla's benefit.
And Mr. Musk has successfully defied skeptics before.
Nevertheless, the stock's lofty valuation--it trades at 28 times expected 2019 earnings--leaves little margin for error. The prospect of diminishing federal incentives leaves it even less.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Automobile industry; Subsidies; Target markets; Automobile sales; Profits
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: Internal Revenue Service--IRS; NAICS: 921130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 28, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776116733
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776116733?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Weighs New Challenge to State Direct-Sales Bans; Appeals court ruling against funeral directors over monks' sales of coffins offers car maker hope
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Mar 2016: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Motors Inc. hopes to capture mainstream auto buyers with its Model 3, an electric car it plans to unveil this week at a price about the same as the average gasoline-powered vehicle, but it may need a federal court ruling to succeed.
The Palo Alto, Calif., auto maker's direct-to-consumer sales are prohibited by law in six states that represent about 18% of the U.S. new-car market. Barring a change of heart by those states, Tesla is preparing to make a federal case out of the direct-sales bans.
The auto maker's legal staff has been studying a 2013 federal appeals court ruling in New Orleans that determined St. Joseph Abbey could sell monk-made coffins to customers without having a funeral director's license. The case emerged amid a casket shortage after Hurricane Katrina. The abbey had tried to sell coffins, only to find state laws restricted such sales to those licensed by the Louisiana Board of Funeral Directors.
For now, Tesla is banking on a combination of new legislation, pending dealer applications and other factors to open doors to selling directly in Arizona, Michigan, Texas, Connecticut, Utah and West Virginia. But the company said it is ready to argue in federal court using the coffin case if necessary.
"It is widely accepted that laws that have a protectionist motivation or effect are not proper," Todd Maron, the auto maker's chief counsel, said in an interview. "Tesla is committed to not being foreclosed from operating in the states it desires to operate in, and all options are on the table."
The ruling in favor of the monks, upheld by the Fifth Circuit Court of Appeals, could give Tesla the precedent it needs to join an "economic liberty" issue currently in dispute between circuit courts in the U.S., Northwestern University law professor John McGinnis said. The Second Circuit Court of Appeals, for instance, has upheld laws that require licensing to sell certain products even if there isn't a clear reason for it other than protecting existing businesses from new competition.
Related
* Tesla: How Uncle Sam May Cause Sticker Shock
* Tesla Fends Off Indiana Effort to Hinder Direct-Sales Methods
* Tesla Delivers 17,400 Vehicles in Fourth Quarter
* Tesla Motors Files for a Dealership License in Michigan
Tesla has long battled states over franchise laws that insulate dealers from direct competition from auto makers. Laws protecting independent dealers were installed in the 1950s to prevent the arbitrary closing of stores by manufacturers, and in recent years these rules have been used by dealer lobbyists and some auto makers to argue that all stores need to be independently owned.
Tesla doesn't have independent dealers and instead sells through its own stores and through the Internet. To date, its sales have been a fraction of the volumes that major auto makers sell, but it aims to boost annual sales nearly 10 fold to 500,000 by 2020. Being able to widely sell the Model 3--expected to be priced at about $35,000 before tax credits--is an important step in taking on brands as ubiquitous as Chevrolet.
Mr. Maron's legal team has been researching legal options as Tesla wages state-by-state battles with dealer associations that have pushed legislation to restrict direct sales of the Model S and Model X, which commonly sell for above $100,000. Recently, Tesla beat back an effort in Indiana that would have halted its sales operation there by the end of 2017.
In Michigan, Tesla last year filed for a dealer license. Because the state made a law in 2014 prohibiting direct sales to consumers by auto makers, the state could determine the license shouldn't be granted. Michigan's attorney general's office declined to comment.
Louisiana's coffin cases could come in handy if Michigan sides with dealers. And Tesla's use of it as a precedent could breathe life into the economic liberty fight that to date has involved smaller issues, such as selling gravestones or providing flowers to a funeral home.
"Until now, these decisions have been in niche areas of the economy," Mr. McGinnis, the professor, said. "With Tesla behind it, it would go into something as economically important as the structure of the industry for retailing cars."
Auto dealers are battle-tested and have notched a series of victories along the way. Earlier this year, the Second Circuit Court of Appeals refused to hear a case brought by auto makers that wanted to change laws using a similar constitutional challenge and involving warranty reimbursement levels.
Tesla could find powerful allies. The Federal Trade Commission has repeatedly said franchise laws are anti-competitive. Other organizations agree.
"There is no legitimate competitive interest in having consumers purchase cars through an independent dealership," Greg Reed, an attorney with Washington D.C.-based Institute for Justice, a libertarian-leaning law firm, said. He calls Michigan's laws "anti-competitive protectionism."
Write to Mike Ramsey at mike.ramsey@wsj.com
Credit: By Mike Ramsey
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 28, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776141892
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776141892?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Tesla Weighs Legal Fight
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Mar 2016: B.3.
ProQuest document link
Abstract:
In Michigan, Tesla last year filed for a dealer license. Because the state made a law in 2014 prohibiting direct sales to consumers by auto makers, the state could determine the license shouldn't be granted.
Full text: Tesla Motors Inc. hopes to capture mainstream auto buyers with its Model 3, an electric car it plans to unveil this week at a price about the same as the average gasoline-powered vehicle, but it may need a federal court ruling to succeed.
The Palo Alto, Calif., auto maker's direct-to-consumer sales are prohibited in six states that represent about 18% of the U.S. new-car market. Barring a change of heart by those states, Tesla is preparing to make a federal case out of the direct-sales bans.
The auto maker's legal staff has been studying a 2013 federal appeals court ruling in New Orleans that determined St. Joseph Abbey could sell monk-made coffins to customers without having a funeral director's license. The case emerged amid a casket shortage after Hurricane Katrina.
The abbey had tried to sell coffins, only to find state laws restricted such sales to those licensed by the Louisiana Board of Funeral Directors.
For now, Tesla is banking on a combination of new legislation, pending dealer applications and other factors to open doors to selling directly in Arizona, Michigan, Texas, Connecticut, Utah and West Virginia. But the company said it is ready to argue in federal court using the coffin case if necessary.
"It is widely accepted that laws that have a protectionist motivation or effect are not proper," Todd Maron, the auto maker's chief counsel, said in an interview. "Tesla is committed to not being foreclosed from operating in the states it desires to operate in, and all options are on the table."
The ruling in favor of the monks, upheld by the Fifth Circuit Court of Appeals, could give Tesla the precedent it needs to join an "economic liberty" issue currently in dispute between circuit courts in the U.S., Northwestern University law professor John McGinnis said. The Second Circuit Court of Appeals, for instance, has upheld laws that require licensing to sell certain products even if there isn't a clear reason for it other than protecting existing businesses from new competition.
Tesla has long battled states over franchise laws that insulate dealers from direct competition from auto makers.
Laws protecting independent dealers were installed in the 1950s to prevent the arbitrary closing of stores by manufacturers, and in recent years these rules have been used by dealer lobbyists and some auto makers to argue that all stores need to be independently owned.
Tesla doesn't have independent dealers and instead sells through its own stores and through the Internet. To date, its sales have been a fraction of the volumes that major auto makers sell, but it aims to boost annual sales nearly 10 fold to 500,000 by 2020.
Being able to widely sell the Model 3 -- expected to be priced at about $35,000 before tax credits -- is an important step in taking on brands as ubiquitous as Chevrolet.
Mr. Maron's legal team has been researching legal options as Tesla wages state-by-state battles with dealer associations that have pushed legislation to restrict direct sales of the Model S and Model X, which commonly sell for above $100,000. Recently, Tesla beat back an effort in Indiana that would have halted its sales operation there by the end of 2017. In Michigan, Tesla last year filed for a dealer license. Because the state made a law in 2014 prohibiting direct sales to consumers by auto makers, the state could determine the license shouldn't be granted. Michigan's attorney general's office declined to comment. Louisiana's coffin cases could come in handy if Michigan sides with dealers.
And Tesla's use of it as a precedent could breathe life into the economic liberty fight that to date has involved smaller issues, such as selling gravestones or providing flowers to a funeral home.
"Until now, these decisions have been in niche areas of the economy," Mr. McGinnis, the professor, said. "With Tesla behind it, it would go into something as economically important as the structure of the industry for retailing cars."
Auto dealers are battle-tested and have notched a series of victories along the way. Earlier this year, the Second Circuit Court of Appeals refused to hear a case brought by auto makers that wanted to change laws using a similar constitutional challenge and involving warranty reimbursement levels. Tesla could find powerful allies. The Federal Trade Commission has repeatedly said franchise laws are anti-competitive. Other organizations agree.
"There is no legitimate competitive interest in having consumers purchase cars through an independent dealership," Greg Reed, an attorney with Washington, D.C.-based Institute for Justice, a libertarian-leaning law firm, said. He calls Michigan's laws "anti-competitive protectionism."
Credit: By Mike Ramsey
Subject: Federal court decisions; Litigation; Automobile dealers; Automobile sales
Location: United States--US Michigan Palo Alto California
Company / organization: Name: Northwestern University; NAICS: 611310; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Mar 29, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776257366
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776257366?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
China's Tesla Remains at the Mercy of the State; The electric-car maker's growth is powered by government policy--and Beijing is flipping the switch
Author: Bhattacharya, Abheek
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Mar 2016: n/a.
ProQuest document link
Abstract:
The main business of selling cars was the predominant profit driver, as China's electric-car market quadrupled in size.
Full text: China's powers that be gave the local version of Tesla its growth last year. Now they could take it away.
BYD reported electrified numbers for 2015, with net profit almost seven times that of the year before. The main business of selling cars was the predominant profit driver, as China's electric-car market quadrupled in size.
BYD also said that its net profit for the current quarter would be at least six times that of year earlier, partly thanks to a continued surge in electric-vehicle sales. The company is aiming to almost double its electric-vehicle sales volume this year, according to Credit Suisse.
Yet all this growth is powered by government support that is set to fall. The national-government subsidy for pure-electric cars of a certain range is down this year by 35% on average, says LMC Automotive's Scarlett Liu. The separate subsidies offered by big cities are likely to be cut to a similar degree, as city officials typically follow the national-level diktat.
Any subsidy cuts by Shanghai and Shenzhen will be particularly significant, given that the two cities combined for 72% of BYD's electric-car sales last year, according to Jefferies. Investors expect Shanghai to release its policy soon.
Total subsidies last year accounted for as much as 35% to 40% of an electric car's sticker price, so their decrease is sure to damp sales broadly. Early indications are worrying. Wholesale shipments of electric cars in January and February, though more than double the year-earlier figure, were just a third of the November-December level, according to LMC. And the pain is likely to endure as the subsidies are phased out entirely over the next five years.
Regulators have also started complaining that consumers are fraudulently availing themselves of these subsidies, raising fears of a crackdown. BYD was specifically tainted when local media this month reported that one of its dealers committed suicide due to involvement in such fraud. BYD denied wrongdoing.
Even as BYD deals with a potential deceleration in electric-car sales, the competition will be warming up. Seeking to meet tighter Chinese fuel-economy rules, Macquarie says, most top manufacturers will introduce electric cars by 2018--and chances are BYD, with its weaker brand, will lose out to rivals.
BYD shares jumped 5% Tuesday, but the outlook doesn't justify the stock's valuation at 29 times forward earnings. No other Chinese car maker trades above 11 times. If governments stop being generous to China's Tesla, so should investors.
Write to Abheek Bhattacharya at abheek.bhattacharya@wsj.com
Credit: By Abheek Bhattacharya
Subject: Automobile sales; Automobile industry; Investments; Profits; Electric vehicles
Location: China
Company / organization: Name: LMC Automotive; NAICS: 541910; Name: Credit Suisse Group; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 29, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776365094
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776365094?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
A Lot Riding on Tesla's Model 3 Unveiling; Electric-car maker aims to prove its coming mass-market vehicle will sell at a profit
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Mar 2016: n/a.
ProQuest document link
Abstract:
Related * Tesla Weighs New Challenge to State Direct-Sales Bans * Tesla: How Uncle Sam May Cause Sticker Shock * Tesla Fights GM-Backed Effort to Halt Direct Sales in Indiana RBC Capital Markets auto analyst Joseph Spak says Tesla will have to make "compromises" to achieve high volumes, but "we doubt technology will be one of them."
Full text:
Tony Wetzel is taking Thursday off to hang out at a Tesla Motors Inc. showroom outside of Boston and place a deposit on the electric-car maker's latest model.
Referring to Thursday as Model 3 Day--in recognition of the public debut of the Silicon Valley auto maker's first affordable vehicle--the 50-year-old Marshfield, Mass., resident and Tesla sedan owner has high expectations for the car.
"I'm confident the Model 3 will have many more bells and whistles than my Model S," he said, referring to the car expected to be priced starting at roughly $35,000, but which won't be delivered to customers until late 2017.
He isn't the only one counting on a big showing for the car. Tesla Chief Executive Elon Musk wants the car to reverse years of losses and stanch hefty cash outflows. To him, it must accomplish something the Model S and Model X have failed to do: sell at a profit.
He designed the Model 3 to be built at lower cost and in higher volumes. Unlike the company's pricey Model S and Model X--which sell on average for more than $100,000--it will made of steel instead of aluminum, and use a battery that goes fewer miles on a charge.
Related
* Tesla Weighs New Challenge to State Direct-Sales Bans
* Tesla: How Uncle Sam May Cause Sticker Shock
* Tesla Fights GM-Backed Effort to Halt Direct Sales in Indiana
RBC Capital Markets auto analyst Joseph Spak says Tesla will have to make "compromises" to achieve high volumes, but "we doubt technology will be one of them." Mr. Spak believes the vehicle could have semiautonomous driving technology.
Morgan Stanley auto analyst Adam Jonas said the Model 3 will have acceleration and handling characteristics on par with BMWs, and come in various configurations. "We expect the Model 3 range will include a variety of body styles including a four-door sedan, coupe, cabriolet, small SUV and other passenger configurations," he said.
Mr. Musk's ultimate goal is get the vehicle to a wider market, forecasting 500,000 total company sales annually by 2020. Much of that increase would come from a Model 3 that competes against mass-market cars from General Motors Co.'s Chevrolet and Nissan Motor Co.'s Leaf.
The auto is getting an early sales boost by fans. Several U.S. stores are planning unveiling parties and more than 20 groups have said they plan to stage campouts for one or more days ahead of the Model 3's release.
Amanda Wuest, a 36-year-old systems administrator from near Philadelphia, will be on hand. She says a Tesla is "the only car on the road that excites me." Like many planning to buy, Ms. Wuest wants to get in line because the $7,500 federal tax credit available to Tesla buyers begins to phase out when the company hits 200,000 in total U.S. sales.
Barclays estimates the new vehicle will attract 95,000 reservations ahead of first deliveries, or more than three times as many amassed by the Model S when it went on sale four years ago. That product required a $5,000 deposit.
Other analysts say Mr. Musk has to improve his delivery performance. The Model X, an sport-utility vehicle that went on sale late last year, faced several delays and initial production has been hampered by problems with its seats and other manufacturing bugs.
As Tesla pursues mass-market acceptance by adding capacity at an assembly plant in California, adding administrative and engineering overhead, and building a battery "gigafactory" in Nevada, its red ink is mounting. Annual losses tripled in 2015 to $900 million despite a 27% sales increase.
Tesla's website suggests demand for the Model S sedan may be cooling, particularly as interest grows in the segment where the new Model X plays. Interested shoppers can now get a model within about a month of ordering, the site suggests, compared with the several-month wait that had been typical.
Of bigger concern, however, is utilization at the new battery plant near Reno, Nev. Slated to cost $5 billion and employ thousands of workers, Tesla will need to generate revenue from the Model 3 to start paying off the bet on the plant.
"There is this timing issue with gigafactory output intended for Model 3, Credit Suisse analyst Dan Galves said. "If they are delayed a lot, it could create under-utilization," which is significant source of cash burn.
There also is potential for competitors such as Audi AG, which is ramping up electric-vehicle plans, and GM with its coming Chevrolet Bolt electric vehicle, scheduled for late 2016 with a $30,000 price tag and 200 miles in driving range, could provide immediate pressure.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Automobile sales
Location: California
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 30, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776698384
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776698384?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
A Lot Riding on Tesla's Model 3 Unveiling; Electric-car maker aims to prove its coming mass-market vehicle will sell at a profit
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Mar 2016: n/a.
ProQuest document link
Abstract:
Related * Tesla Weighs New Challenge to State Direct-Sales Bans * Tesla: How Uncle Sam May Cause Sticker Shock * Tesla Fights GM-Backed Effort to Halt Direct Sales in Indiana RBC Capital Markets auto analyst Joseph Spak says Tesla will have to make "compromises" to achieve high volumes, but "we doubt technology will be one of them."
Full text: Tony Wetzel is taking Thursday off to hang out at a Tesla Motors Inc. showroom outside of Boston and place a deposit on the electric-car maker's latest model.
Referring to Thursday as Model 3 Day--in recognition of the public debut of the Silicon Valley auto maker's first affordable vehicle--the 50-year-old Marshfield, Mass., resident and Tesla sedan owner has high expectations for the car.
"I'm confident the Model 3 will have many more bells and whistles than my Model S," he said, referring to the car expected to be priced starting at roughly $35,000, but which won't be delivered to customers until late 2017.
He isn't the only one counting on a big showing for the car. Tesla Chief Executive Elon Musk wants the car to reverse years of losses and stanch hefty cash outflows. To him, it must accomplish something the Model S and Model X have failed to do: sell at a profit.
He designed the Model 3 to be built at lower cost and in higher volumes. Unlike the company's pricey Model S and Model X--which sell on average for more than $100,000--it will made of steel instead of aluminum, and use a battery that goes fewer miles on a charge.
Related
* Tesla Weighs New Challenge to State Direct-Sales Bans
* Tesla: How Uncle Sam May Cause Sticker Shock
* Tesla Fights GM-Backed Effort to Halt Direct Sales in Indiana
RBC Capital Markets auto analyst Joseph Spak says Tesla will have to make "compromises" to achieve high volumes, but "we doubt technology will be one of them." Mr. Spak believes the vehicle could have semiautonomous driving technology.
Morgan Stanley auto analyst Adam Jonas said the Model 3 will have acceleration and handling characteristics on par with BMWs, and come in various configurations. "We expect the Model 3 range will include a variety of body styles including a four-door sedan, coupe, cabriolet, small SUV and other passenger configurations," he said.
Mr. Musk's ultimate goal is get the vehicle to a wider market, forecasting 500,000 total company sales annually by 2020. Much of that increase would come from a Model 3 that competes against mass-market cars from General Motors Co.'s Chevrolet and Nissan Motor Co.'s Leaf.
The auto is getting an early sales boost by fans. Several U.S. stores are planning unveiling parties and more than 20 groups have said they plan to stage campouts for one or more days ahead of the Model 3's release.
Amanda Wuest, a 36-year-old systems administrator from near Philadelphia, will be on hand. She says a Tesla is "the only car on the road that excites me." Like many planning to buy, Ms. Wuest wants to get in line because the $7,500 federal tax credit available to Tesla buyers begins to phase out when the company hits 200,000 in total U.S. sales.
Barclays estimates the new vehicle will attract 95,000 reservations ahead of first deliveries, or more than three times as many amassed by the Model S when it went on sale four years ago. That product required a $5,000 deposit.
Other analysts say Mr. Musk has to improve his delivery performance. The Model X, a sport-utility vehicle that went on sale late last year, faced several delays and initial production has been hampered by problems with its seats and other manufacturing bugs.
As Tesla pursues mass-market acceptance by adding capacity at an assembly plant in California, adding administrative and engineering overhead, and building a battery "gigafactory" in Nevada, its red ink is mounting. Annual losses tripled in 2015 to $900 million despite a 27% sales increase.
Tesla's website suggests demand for the Model S sedan may be cooling, particularly as interest grows in the segment where the new Model X plays. Interested shoppers can now get a model within about a month of ordering, the site suggests, compared with the several-month wait that had been typical.
Of bigger concern, however, is utilization at the new battery plant near Reno, Nev. Slated to cost $5 billion and employ thousands of workers, Tesla will need to generate revenue from the Model 3 to start paying off the bet on the plant.
"There is this timing issue with gigafactory output intended for Model 3, Credit Suisse analyst Dan Galves said. "If they are delayed a lot, it could create under-utilization," which is significant source of cash burn.
There also is potential for competitors such as Audi AG, which is ramping up electric-vehicle plans, and GM with its coming Chevrolet Bolt electric vehicle, scheduled for late 2016 with a $30,000 price tag and 200 miles in driving range, could provide immediate pressure.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Automobile sales
Location: California
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 31, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776718226
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776718226?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Counts on Model 3 for Profit
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]31 Mar 2016: B.1.
ProQuest document link
Abstract:
Much of that increase would come from a Model 3 that competes against mass-market cars from General Motors Co.'s Chevrolet brand and Nissan Motor Co.'s battery-powered Leaf car.
Full text: Tony Wetzel is taking Thursday off to hang out at a Tesla Motors Inc. showroom outside of Boston and place a deposit on the electric-car maker's latest model.
Referring to Thursday as Model 3 Day in recognition of the public debut of the Silicon Valley auto maker's first affordable vehicle, the 50-year-old Marshfield, Mass., resident and Tesla sedan owner has high expectations for the car.
"I'm confident the Model 3 will have many more bells and whistles than my Model S," Mr. Wetzel said.
He isn't the only one counting on a big showing for the car, which is expected to be priced starting at about $35,000 with delivery to customers coming in late 2017. Tesla Chief Executive Elon Musk wants the car to reverse years of losses and stanch hefty cash outflows. To him, it must accomplish something the Model S and Model X have failed to do: sell at a profit.
He designed the Model 3 to be built at lower cost and in higher volumes. Unlike the company's pricey Model S and Model X -- which sell on average for more than $100,000 -- it will be made of steel instead of aluminum, and use a battery that goes fewer miles on a charge.
RBC Capital Markets auto analyst Joseph Spak says Tesla will have to make "compromises" to achieve high volumes, but "we doubt technology will be one of them." Mr. Spak believes the vehicle could have semiautonomous driving technology.
Mr. Musk's ultimate goal is get the vehicle to a wider market, helping boost the company's total annual sales to 500,000 vehicles by 2020. Much of that increase would come from a Model 3 that competes against mass-market cars from General Motors Co.'s Chevrolet brand and Nissan Motor Co.'s battery-powered Leaf car.
The auto is getting an early sales boost by fans. Several U.S. stores are planning unveiling parties, and more than 20 groups are planning to stage campouts at showrooms for one or more days ahead of the Model 3's release.
Amanda Wuest, a 36-year-old systems administrator from near Philadelphia, will be on hand. She says a Tesla is "the only car on the road that excites me." Like many planning to buy, Ms. Wuest wants to get in line because the $7,500 federal tax credit available to Tesla buyers begins to phase out when the company's total U.S. sales reach 200,000.
Barclays estimates the new vehicle will attract 95,000 reservations ahead of first deliveries, or more than three times as many as the Model S amassed when it went on salefouryears ago.
Other analysts say Mr. Musk must improve on past deliveries. The Model X, an sport-utility vehicle that went on sale late last year, faced several delays, and initial production has been hampered by problems with its seats and other manufacturing bugs.
As Tesla pursues mass-market acceptance by expanding an assembly plant in California, adding administrative and engineering overhead and building a battery "gigafactory" in Nevada, its red ink is mounting. Annual losses tripled in 2015 to $900 million despite a 27% sales increase.
Tesla's website suggests demand for the Model S sedan may be cooling. Interested shoppers can now get deliveries of the car within about a month of ordering, the site suggests, compared with the several-month wait that had been typical.
Another concern is the new battery plant near Reno, Nev., which is slated to cost $5 billion and employ thousands of workers.
"There is this timing issue with gigafactory output intended for Model 3, Credit Suisse analyst Dan Galves said. "If they are delayed a lot, it could create under-utilization," which is significant source of cash burn.
Credit: By Mike Ramsey
Subject: Automobile industry; Automobile sales
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: RBC Capital Markets; NAICS: 523110; Name: Nissan Motor Co Ltd; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B. 1
Publication year: 2016
Publication date: Mar 31, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776773549
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776773549?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla's Model 3 Electric Car Gets Requests for 180,000 Vehicles on First Day of Ordering; Vehicle is expected to get at least 215 miles of range from a single charge
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Apr 2016: n/a.
ProQuest document link
Abstract:
Sustained enthusiasm for Tesla's business model, reinforced by a recent rebound in the company's stock price, comes even as gasoline prices remain around $2 per gallon in the U.S. Most auto makers have seen cheap fuel prices boost demand for SUVs and pickup trucks, which consume more gasoline.
Full text: LOS ANGELES--Tesla Motors Co. secured about 180,000 reservations during the first day of ordering for the Model 3, with initial demand for an electric car that won't go on sale for at least another year shattering expectations.
The tally was updated Friday in a tweet by Tesla Chief Executive Elon Musk. Thursday, the Silicon Valley auto maker showed the car for the first time to a crowd of about 800, made up of Tesla owners, federal regulators and electric-vehicle enthusiasts, packed into a hangar near Los Angeles. One attendee waved a lightsaber, made popular by Star Wars, during a presentation.
Read more
* Tesla Model 3: Is This Stock Already in Ludicrous Mode?
* Tesla Weighs New Challenge to State Direct-Sales Bans
* Tesla: How Uncle Sam May Cause Sticker Shock
More fans joined a launch event in Amsterdam staged during the early morning hours.
Sustained enthusiasm for Tesla's business model, reinforced by a recent rebound in the company's stock price, comes even as gasoline prices remain around $2 per gallon in the U.S. Most auto makers have seen cheap fuel prices boost demand for SUVs and pickup trucks, which consume more gasoline.
Shares of Tesla rose 1.9% to $234.16 in midday trading Friday in New York. Earlier in the session, the stock traded as high as $247.90.
In a speech Thursday, Chief Executive Elon Musk referred to the smaller electric car as the capstone of a "secret master plan" that was crafted years ago to popularize electric cars. During a test drive for attendees, Tesla Vice President Doug Field said the Model 3 is a once-in-a-lifetime opportunity to make attractive electric vehicles more widely available.
To date, Tesla has sold about 100,000 vehicles--mostly Model S electric sedans with price tags that rival high-end German cars. The Model 3, which has been promised for several years, aims to hit the heart of the "mass market," Mr. Musk said.
He said the car will cost $35,000 and the company aims to have initial copies on roads sometime in 2017. He said the car will be capable of achieving more than 215 miles on a charge, will receive top safety ratings, and will sprint from 0 to 60 miles an hour in less than six seconds.
During the test drive Mr. Field floored a preproduction version of the Model 3, pinning occupants to the backs of their seats. A panoramic roof, a large horizontal telematics touch screen and futuristic trim components--such as the steering wheel or door handles--help distinguish the interior.
The Model 3 represents Mr. Musk's steepest challenge. Selling about 50,000 vehicles in 2015, Tesla expects the addition of a cheaper offering to propel annual sales to 500,000 by 2020.
Tesla's new car will hit the market as its bigger rivals begin to launch cars that could more directly compete. General Motors Co. aims to launch an electric small car later this year, capable of 200 miles on a charge, and Volkswagen AG's Audi brand is planning an electric sport utility.
Mr. Musk lacks the financial firepower of international auto giants, and thanked owners of the pricey Tesla Roadster, Model S sedan and Model X SUV for paving the way for the Model 3.
Rival auto makers have often criticized Mr. Musk for having too narrow a market--Teslas often cost far more than $100,000. But the entrepreneur said on Friday that the only way for the relatively small company to achieve the scale, funding and expertise necessary for a more affordable car was to start at the top-end of the market.
He said "the S and the X are what pay for (Model 3) development...it was only possible to do that before going through the prior steps."
Analysts and investors see a successful Model 3 launch as a potential way to stanch a long string of financial losses and reverse cash outflows. Product hiccups, substantial increases in head count, the construction of a Nevada battery plant and billions of dollars in research and development costs have dented the bottom line.
Mr. Musk realizes things haven't always gone as planned, but said he wants to hit targets. "I do feel fairly confident it will be next year," Mr. Musk said, laughing. The company has struggled to launch vehicles on time under his watch.
Write to John D. Stoll at john.stoll@wsj.com
Credit: By John D. Stoll
Subject: Gasoline prices; Automobile industry; Vehicles
Location: Los Angeles California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 1, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777391017
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777391017?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Huge Backlog Leaves Tesla Little Time to Ramp Up Model 3 Production; Electric car maker faces hurdles satisfying enormous initial demand for $35,000 sedan
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Apr 2016: n/a.
ProQuest document link
Abstract:
Related * Model 3 Review: Electric, Inside and Out * Initial Demand Soars for More-Affordable Tesla * Surging Model 3 Orders Doesn't Solve Tesla Cash Need * Video: Tesla's Elon Musk Debuts Model 3 * Tesla Weighs New Challenge to State Direct-Sales Bans During a test drive Thursday, Tesla Vice President Doug Field floored a preproduction version of the Model 3, pinning occupants to their seat backs as he demonstrated acceleration billed to go from standstill to 60 miles an hour in less than six seconds.
Full text: As electric car maker Tesla Motors Inc. was preparing in 2008 to sell its first product, staffers offered test drives of its Roadster prototype with a glaring problem: the speedometer didn't work.
Operating on a shoestring from a small workshop in northern California at the time, the startup was racing to prove electric cars could be cool even if they had glitches. Today, the company has made more than 110,000 vehicles, and its pricey Model S sedan and Model X sport-utility vehicle are hailed as legitimate contenders to German performance cars.
The unveiling this week of its Model 3, its most affordable car to date, represents the capstone of Tesla Chief Executive Elon Musk's "secret master plan" to popularize vehicles with no tailpipe emissions. The Model 3 promises a sedan capable of seating five and going 215 miles on a charge--all at a starting price of $35,000.
Mr. Musk on Friday tweeted that deposits for 180,000 of the vehicles had been amassed in 24 hours since its release. He said the Model 3 generated a $7.5 billion backlog in a day, calculating the average selling price at $42,000.
The enormous interest in a car that won't ship for at least 18 months, however, presents a difficult challenge for the Palo Alto, Calif., auto maker. Mr. Musk has just 20 months to ramp up production amid continuing quarterly losses and hefty cash outflows.
Even as he and other executives celebrated the latest unveiling with hundreds of cheering fans and Tesla owners at a hanger near Los Angeles, he reiterated a promise to achieve 500,000 total annual sales by 2020, up from about 50,000 last year. That is a very ambitious timetable for any auto maker.
Related
* Model 3 Review: Electric, Inside and Out
* Initial Demand Soars for More-Affordable Tesla
* Surging Model 3 Orders Doesn't Solve Tesla Cash Need
* Video: Tesla's Elon Musk Debuts Model 3
* Tesla Weighs New Challenge to State Direct-Sales Bans
During a test drive Thursday, Tesla Vice President Doug Field floored a preproduction version of the Model 3, pinning occupants to their seat backs as he demonstrated acceleration billed to go from standstill to 60 miles an hour in less than six seconds. A panoramic roof, large telematics touch screen and futuristic steering wheel and door handles distinguish its interior.
The reservations and the extraordinary initial enthusiasm for the Model 3 contrasts lackluster interest in rival electric and hybrid cars now struggling for sales amid low gasoline prices. General Motors Co. will begin selling a Chevrolet Bolt electric small car later this year with some characteristics similar to the Model 3, but the Detroit auto giant doesn't have a waiting list.
On Friday, Tesla investors responded favorably, sending the stock up 3.4% to $237.59 Its current $31.77 billion market value is closing in on GM's $47.85 billion despite selling fewer cars in a year than the Detroit auto giant sells in two weeks.
Delivering desirable cars is only part of the equation. Tesla's sources of cash include selling regulatory credits, battery packs, financing packages and repair services. By early Friday, the company had added $180 million from new deposits, less than 10% of the company's expected annual operating expense.
But Tesla is spending big as it expands an assembly plant in California and opens a battery factory in Nevada. It plans to spend $1.5 billion in capital expenditures this year, or 20% more than its cash on hand, and expects operating expenses will grow 20%.
The company recently installed a new paint shop and stamping lines at a factory it bought from GM and Toyota last decade. More improvements are planned to make way for the Model 3's production.
And Tesla has struggled to meet past commitments on the Model X, a sport-utility vehicle that went on sale last fall.
Design glitches, such as complex seats and falcon-wing doors, slowed its production launch and dented the company's bottom line.
Barclays auto analyst Brian Johnson on Friday said the new sedan's ramp could also prove tedious and costly. He doesn't expect full production of the Model 3 until 2019, and wouldn't be surprised if Tesla raised cash in the near-term despite the company's guidance that it has enough money.
"It's a big challenge to ramp up from 50,000 to 500,000," AlixPartners LLP's auto consultant Mark Wakefield said. Even with those challenges Mr. Wakefield reserved a Model 3 within the first 24 hours, has ordered a Model X and owns a Model S.
Mr. Wakefield said a substantial chunk of those wanting to buy the Model 3 will be patient because Tesla owners are still more interested in being first adopters than immediately filling a slot in their garage.
Mr. Musk isn't ignoring the potential hurdles.
In his speech, he laughed about the company's proposed timetable for Model 3 deliveries, adding "I do feel fairly confident it will be next year."
As Tesla's buyers wait, more rivals will come into view. In addition to the Chevrolet Bolt, luxury car maker Audi AG is preparing to sell an electric SUV and startups, such as California's Faraday Future, have big-spending Chinese backers eager to crack the global electric-vehicle market.
"Tesla has a lot going for it despite these teething problems," Mr. Wakefield said. Swimming against the tide is core to the company's business model.
Much like Tesla, Toyota Motor Corp. and Honda Motor Co. made headway in the U.S. market when Americans were looking for sleek alternatives to gas guzzlers. But the Japanese first found success with their inexpensive small cars--the Corolla and Civic--and then gradually went up market.
Mr. Musk, lacking scale or car-manufacturing experience, said he took a different route because getting the money and know-how to build a mass-market car wouldn't have happened if the company hadn't first sold $100,000 sedans, two-seaters and SUVs.
"The S and the X are what pay for [Model 3] development...it was only possible to do that before going through the prior steps," he said.
Write to John D. Stoll at john.stoll@wsj.com
Credit: By John D. Stoll
Subject: Automobile sales; Automobile industry; Factories; Vehicles
Location: California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 1, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777591101
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777591101?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla's Model 3: Electric on the Inside and Out; With the needed hardware tucked away, designers had much free space to use
Author: Neil, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Apr 2016: n/a.
ProQuest document link
Abstract:
[...]if the Model 3's design team, led by Tesla Motors Inc. design director Franz von Holzhausen, has made car design look easy, it is because, for them, it was a lot easier, thanks to Tesla's trademark electric-vehicle architecture. [...]when the test driver floored the accelerator of the dual-motor Model 3, it had the same speed-levitated feeling as the Model S. The Model 3 captures the signature look of Tesla's big sedan, the Model S, mainly by maintaining the graphical and proportional relationship of the car's glazing; the chrome ellipse around the windows (blacked out B and C pillars), above the sloped beltline; the fly line; and the geometry of tumblehome, the inward slope of the side profile.
Full text: The thing to remember about the Tesla Model 3, which made its debut Thursday night in a swirl of dry ice and hype in Los Angeles, is that the architecture enables the aesthetics.
Yes, it is lovely, with an uncommon grace of line and a body shape--a four-door fastback--that has long been under-represented in the American market. It dares to be modern, and frankly electric--note the absence of an air-breathing grille, a bit like the car has tape over its mouth--but it delivers what to my eye is the most agreeable, most romantic shape in the small-car class.
And if the Model 3's design team, led by Tesla Motors Inc. design director Franz von Holzhausen, has made car design look easy, it is because, for them, it was a lot easier, thanks to Tesla's trademark electric-vehicle architecture. The Model 3's lithium-ion batteries, promising at least 215 miles range, are concealed within a remarkably thin floor pan structure. The rear-situated electric motor is the size of a bathroom trash can (high-performance versions will get a second motor on the front axle).
With much of the necessary hardware nicely tucked away, the Model 3 designers had free play in the design space that other car makers can only envy.
On Thursday night, journalists were given only a brief ride around the premises and weren't allowed to drive the vehicle themselves. But when the test driver floored the accelerator of the dual-motor Model 3, it had the same speed-levitated feeling as the Model S.
The Model 3 captures the signature look of Tesla's big sedan, the Model S, mainly by maintaining the graphical and proportional relationship of the car's glazing; the chrome ellipse around the windows (blacked out B and C pillars), above the sloped beltline; the fly line; and the geometry of tumblehome, the inward slope of the side profile.
Also note how clean the surfacing is. Thanks to Tesla's embrace of complex glass forming for windshields and rear glass, the Model 3 offers nearly polished surface to the wind. The rear glass panel extends to very nearly the middle of the car before it meets a transverse roof support. In the cabin, the experience is strangely like a minisub.
The Model 3 does a lot of things, inside and out, so to speak. It will have the largest interior volume of any car in its class--that is, when it comes to the market late next year, as expected--while also delivering the most sophisticated silhouette. Tesla Chief Executive Elon Musk observed that, in answer to a client question, it can fit a 7-foot surfboard inside.
But the Model 3's electric-vehicle packaging really pays off aesthetically in the front of the car, from the roof pillars forward. As Mr. Musk observed, the Model 3 was able to move the forward transverse structure--the dash, or the "firewall," said Mr. Musk, smiling at the obsolescence--away from the cabin, opening up floor space and leg room for front passengers and allowing the rear seats to move forward. This is something you can't do with a front-engine internal-combustion car.
The entire visual drama of the Model 3 comes down to the intersection of the rakish windscreen, the low scuttle and plunging hood line between two prominent front fenders. If it doesn't look like a Model S, it looks like a fetal Maserati.
From his first impulsive mission statement back in 2006 to today, Mr. Musk embraced an irony: To make electronic vehicles practical, Tesla first had to make them desirable.
As the Model 3 shows, electricity can be a beautiful thing.
Corrections & Amplifications: Tesla's design director is Franz von Holzhausen. An earlier version of this article incorrectly gave his name as Hanz Von Holzhausen. (April 1, 2016)
Write to Dan Neil at Dan.Neil@wsj.com
Credit: By Dan Neil
Subject: Automobile industry; Design
Location: Los Angeles California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 1, 2016
column: Rumble Seat
Section: Life
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777699866
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777699866?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
After Flashy Tesla Reveal, Pressure Is On
Author: Stoll, John D
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Apr 2016: B.1.
ProQuest document link
Abstract:
General Motors Co. will begin selling a Chevrolet Bolt electric small car later this year with some characteristics similar to the Model 3, but the Detroit auto giant doesn't have a waiting list.
Full text: As electric car maker Tesla Motors Inc. was preparing in 2008 to sell its first product, staffers offered test drives of its Roadster prototype with a glaring problem: the speedometer didn't work.
Operating on a shoestring from a small workshop in northern California at the time, the startup was racing to prove electric cars could be cool even if they had glitches. Today, the company has made more than 110,000 vehicles, and its pricey Model S sedan and Model X sport-utility vehicle are hailed as legitimate contenders to German performance cars.
The unveiling this week of its Model 3, its most affordable car to date, represents the capstone of Tesla Chief Executive Elon Musk's "secret master plan" to popularize vehicles with no tailpipe emissions. The Model 3 promises a sedan capable of seating five and going 215 miles on a charge -- all at a starting price of $35,000.
Mr. Musk on Friday tweeted that deposits for 180,000 of the vehicles had been amassed in 24 hours since its release. He said the Model 3 generated a $7.5 billion backlog in a day, calculating the average selling price at $42,000.
The enormous interest in a car that won't ship for at least 18 months, however, presents a difficult challenge for the Palo Alto, Calif., auto maker. Mr. Musk has just 20 months to ramp up production amid continuing quarterly losses and hefty cash outflows.
Even as he and other executives celebrated the latest unveiling with hundreds of cheering fans and Tesla owners at a hanger near Los Angeles, he reiterated a promise to achieve 500,000 total annual sales by 2020, up from about 50,000 last year. That is a very ambitious timetable for any auto maker.
During a test drive Thursday, Tesla Vice President Doug Field floored a preproduction version of the Model 3, pinning occupants to their seat backs as he demonstrated acceleration billed to go from standstill to 60 miles an hour in less than six seconds. A panoramic roof, large telematics touch screen and futuristic steering wheel and door handles distinguish its interior.
The reservations and the extraordinary initial enthusiasm for the Model 3 contrasts lackluster interest in rival electric and hybrid cars now struggling for sales amid low gasoline prices. General Motors Co. will begin selling a Chevrolet Bolt electric small car later this year with some characteristics similar to the Model 3, but the Detroit auto giant doesn't have a waiting list.
On Friday, Tesla investors responded favorably, sending the stock up 3.4% to $237.59 Its current $31.77 billion market value is closing in on GM's $47.85 billion despite selling fewer cars in a year than the Detroit auto giant sells in two weeks.
Delivering desirable cars is only part of the equation. Tesla's sources of cash include selling regulatory credits, battery packs, financing packages and repair services. By early Friday, the company had added $180 million from new deposits, less than 10% of the company's expected annual operating expense.
But Tesla is spending big as it expands an assembly plant in California and opens a battery factory in Nevada. It plans to spend $1.5 billion in capital expenditures this year, or 20% more than its cash on hand, and expects operating expenses will grow 20%.
The company recently installed a new paint shop and stamping lines at a factory it bought from GM and Toyota last decade. More improvements are planned to make way for the Model 3's production.
And Tesla has struggled to meet past commitments on the Model X, a sport-utility vehicle that went on sale last fall.
Design glitches, such as complex seats and falcon-wing doors, slowed its production launch and dented the company's bottom line.
Barclays auto analyst Brian Johnson on Friday said the new sedan's ramp could also prove tedious and costly. He doesn't expect full production of the Model 3 until 2019, and wouldn't be surprised if Tesla raised cash in the near-term despite the company's guidance that it has enough money.
"It's a big challenge to ramp up from 50,000 to 500,000," AlixPartners LLP's auto consultant Mark Wakefield said. Even with those challenges Mr. Wakefield reserved a Model 3 within the first 24 hours, has ordered a Model X and owns a Model S.
Mr. Wakefield said a substantial chunk of those wanting to buy the Model 3 will be patient because Tesla owners are still more interested in being first adopters than immediately filling a slot in their garage.
Mr. Musk isn't ignoring the potential hurdles.
In his speech, he laughed about the company's proposed timetable for Model 3 deliveries, adding "I do feel fairly confident it will be next year."
As Tesla's buyers wait, more rivals will come into view. In addition to the Chevrolet Bolt, luxury car maker Audi AG is preparing to sell an electric SUV and startups, such as California's Faraday Future, have big-spending Chinese backers eager to crack the global electric-vehicle market.
"Tesla has a lot going for it despite these teething problems," Mr. Wakefield said. Swimming against the tide is core to the company's business model.
Much like Tesla, Toyota Motor Corp. and Honda Motor Co. made headway in the U.S. market when Americans were looking for sleek alternatives to gas guzzlers. But the Japanese first found success with their inexpensive small cars -- the Corolla and Civic -- and then gradually went up market.
Mr. Musk, lacking scale or car-manufacturing experience, said he took a different route because getting the money and know-how to build a mass-market car wouldn't have happened if the company hadn't first sold $100,000 sedans, two-seaters and SUVs.
"The S and the X are what pay for [Model 3] development . . . it was only possible to do that before going through the prior steps," he said.
Credit: By John D. Stoll
Subject: Emissions; Automobile industry; Electric vehicles
Location: California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Apr 2, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777698932
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777698932?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Overheard: Tesla's Finances; Reservations for Tesla Motors' new Model 3 won't do much to alter the company's financial position
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Apr 2016: n/a.
ProQuest document link
Abstract:
Can Tesla convert a hugely loyal customer base into a profitable business?
Full text: The unveiling of Tesla Motors' new Model 3 appears to have been a huge success. The reservations it generated won't do much to alter Tesla's financial position, though.
Tesla's shares shot higher Friday after CEO Elon Musk said that Tesla collected 135,000 reservations on the first day, much higher than most observers expected.
The stock now is up a blistering 67% in less than two months.
But the big question for investors still remains: Can Tesla convert a hugely loyal customer base into a profitable business?
Suppose Tesla eventually winds up with 300,000 reservations. To secure one, customers need to plunk down a refundable $1,000 deposit. That would bring an inflow of $300 million in deposits to the company, assuming no one requests a refund.
Tesla's 2015 free cash flow was negative $2.2 billion. At that rate, the new deposit money coming in amounts to less than two months of cash. Tesla ended 2015 with just $1.2 billion of cash on hand.
With the Model 3 not expected to arrive until late 2017 at the earliest, Tesla's need for cash isn't going away, no matter how much excitement Mr. Musk generates for his latest engineering feat.
Subject: Acquisitions & mergers
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 2, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777699860
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777699860?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Motors Says Reservations for Model 3 Surpass 276,000; Model 3 will be a rear-wheel-drive car with all-wheel-drive as an option, CEO says
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Apr 2016: n/a.
ProQuest document link
Abstract:
To give a sense on the scale of the backlog, BMW sold about 95,000 3-series sedans in 2015 in the U.S. The Model 3 is roughly the same size and price and would likely outsell the U.S.'s best-selling compact luxury car in its first year of production if Tesla can make enough cars.
Full text: Reservations for Tesla Motors Inc.'s Model 3 electric car have now topped 276,000 since the company began taking deposits on March 31.
The figure is staggering and could represent both an evolution for Tesla and for electric cars. Tesla CEO Elon Musk gave an update on reservations on Twitter late Saturday evening, after updating the figure several times since Thursday evening's unveiling of the prototype Model 3, due out in late 2017.
The Model 3 is a sedan capable of seating five and going 215 miles on a charge and 0-60 mph in less than 6 seconds, starting at a price of $35,000.
"All efforts focused on accelerating the ramp," Mr. Musk said in a tweet, his standard form of communication.
Mr. Musk also said the company is planning to send out gifts to people who waited in line at Tesla stores as a token of appreciation.
To give a sense on the scale of the backlog, BMW sold about 95,000 3-series sedans in 2015 in the U.S. The Model 3 is roughly the same size and price and would likely outsell the U.S.'s best-selling compact luxury car in its first year of production if Tesla can make enough cars.
Mr. Musk, on Sunday, said on Twitter that the Model 3 will be a rear-wheel-drive car with all-wheel-drive as an option.
The 276,000 reservations equates to an $11.6 billion backlog of orders, based on Mr. Musk's assessment that the average Model 3 would cost about $42,000 with options. Last year, Tesla's global revenues were about $4 billion.
To date, in its existence, Tesla has shipped about 110,000 cars, most of the Model S sedans. It has struggled at times with manufacturing and is still slowly ramping up production of the Model X, its sport-utility vehicle that launched late last year. The huge vote of confidence in its forthcoming vehicle is a blessing and a curse. It is vindication for Mr. Musk and his confidence that the company could sell 500,000 cars a year by 2020, a figure that seems possible now, though still optimistic.
The enormous interest in a car that won't ship for at least 18 months, however, presents a difficult challenge for the Palo Alto, Calif., auto maker. Mr. Musk has just 20 months to ramp up production amid continuing quarterly losses and hefty cash outflows.
The production also will have to sync with the completion of Tesla's giant battery factory, dubbed the "gigafactory" by Mr. Musk. He showed images of the huge, white building during the presentation on Thursday. The plant will produce batteries for the Model 3 and is key to reducing the price of the battery packs enough to be able to make the vehicle affordable.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Social networks
Location: United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 3, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777841090
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777841090?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Motors Says Reservations for Model 3 Surpass 276,000; Model 3 will be a rear-wheel-drive car with all-wheel-drive as an option, CEO says
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Apr 2016: n/a.
ProQuest document link
Abstract:
To give a sense on the scale of the backlog, BMW sold about 95,000 3-series sedans in 2015 in the U.S. The Model 3 is roughly the same size and price and would likely outsell the U.S.'s best-selling compact luxury car in its first year of production if Tesla can make enough cars.
Full text: Reservations for Tesla Motors Inc.'s Model 3 electric car have now topped 276,000 since the company began taking deposits on March 31.
The figure is staggering and could represent both an evolution for Tesla and for electric cars. Tesla CEO Elon Musk gave an update on reservations on Twitter late Saturday evening, after updating the figure several times since Thursday evening's unveiling of the prototype Model 3, due out in late 2017.
The Model 3 is a sedan capable of seating five and going 215 miles on a charge and 0-60 mph in less than 6 seconds, starting at a price of $35,000.
"All efforts focused on accelerating the ramp," Mr. Musk said in a tweet, his standard form of communication.
Mr. Musk also said the company is planning to send out gifts to people who waited in line at Tesla stores as a token of appreciation.
To give a sense on the scale of the backlog, BMW sold about 95,000 3-series sedans in 2015 in the U.S. The Model 3 is roughly the same size and price and would likely outsell the U.S.'s best-selling compact luxury car in its first year of production if Tesla can make enough cars.
Mr. Musk, on Sunday, said on Twitter that the Model 3 will be a rear-wheel-drive car with all-wheel-drive as an option.
The 276,000 reservations equates to an $11.6 billion backlog of orders, based on Mr. Musk's assessment that the average Model 3 would cost about $42,000 with options. Last year, Tesla's global revenues were about $4 billion.
To date, in its existence, Tesla has shipped about 110,000 cars, most of the Model S sedans. It has struggled at times with manufacturing and is still slowly ramping up production of the Model X, its sport-utility vehicle that launched late last year. The huge vote of confidence in its forthcoming vehicle is a blessing and a curse. It is vindication for Mr. Musk and his confidence that the company could sell 500,000 cars a year by 2020, a figure that seems possible now, though still optimistic.
A reservation doesn't constitute an order. Reservation holders will be sent an order agreement at a later date
The enormous interest in a car that won't ship for at least 18 months, however, presents a difficult challenge for the Palo Alto, Calif., auto maker. Mr. Musk has just 20 months to ramp up production amid continuing quarterly losses and hefty cash outflows.
The production also will have to sync with the completion of Tesla's giant battery factory, dubbed the "gigafactory" by Mr. Musk. He showed images of the huge, white building during the presentation on Thursday. The plant will produce batteries for the Model 3 and is key to reducing the price of the battery packs enough to be able to make the vehicle affordable.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Social networks
Location: United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 4, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777843153
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777843153?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Reports Lower Than Expected First-Quarter Sales; Electric car maker cites supplier shortages caused by its own 'hubris'
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Apr 2016: n/a.
ProQuest document link
Abstract:
The Palo Alto, Calif., electric car maker had forecast 16,000 deliveries in the first quarter, a bit lower than the 17,400 cars delivered in the prior three months.
Full text: Tesla Motors Inc. said its first-quarter global sales rose to a less than forecast 14,820 vehicles, up 50% over a year earlier but crimped by supplier shortages and what the company said was its own "hubris."
The Palo Alto, Calif., electric car maker had forecast 16,000 deliveries in the first quarter, a bit lower than the 17,400 cars delivered in the prior three months. Tesla doesn't disclose sales by region.
The company said it shipped 12,420 Model S sedans and 2,400 Model X sport-utility vehicles in the first three months of the year. It blamed trouble manufacturing the SUV as a result of its own "hubris in adding far too much new technology to the Model X in version 1." It lacked sufficient in-house capability to produce some of the parts, it said.
Still, Tesla said it reached production of 750 Model X cars a day by the end of March, which is roughly full capacity, and that it would maintain its forecast of between 80,000 and 90,000 deliveries in 2016.
Tesla's sales have continued to grow as it expands to new markets and increases its production capability. It sold just over 50,000 vehicles in 2015. Tesla said new orders in the first quarter exceeded its deliveries by a "wide margin."
The report comes days after Tesla started taking reservations for its Model 3, a compact sedan that seats five and has a range of 215 miles or more on a charge. Through Saturday, Tesla had logged 276,000 Model 3 reservations, each held by a $1,000 refundable deposit.
The interest in the Model 3 demonstrates a strong demand for the Tesla product that today is inhibited by the high price of its current offerings, which start at $76,000 and often sell for more than $100,000 with options.
Reservations for its coming Model 3 lifted Tesla's shares to a seven-month high, finishing up 4% at $246.99 at 4 p.m. As recently as Feb. 9, the stock exchanged hands at $142.32. Following the sales report, its shares fell 2.4% in after-hours trading on the Nasdaq.
"While in the grand scheme of the 'idea' of Tesla, the 'miss' doesn't matter much, it may stop the stock's recent positive momentum in the wake of Model 3 excitement," RBC analyst Joseph Spak said in a note. "Tesla is trying to assure the market by indicating they are working to ensure the same mistakes are not repeated with the Model 3."
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Automobile sales
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 4, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778158626
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778158626?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Reports Lower-Than-Expected First-Quarter Sales; Electric car maker cites supplier shortages caused by its own 'hubris'
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Apr 2016: n/a.
ProQuest document link
Abstract:
The Palo Alto, Calif., electric car maker had forecast 16,000 deliveries in the first quarter, a bit lower than the 17,400 cars delivered in the prior three months.
Full text: Tesla Motors Inc. said its first-quarter global sales rose to a less than forecast 14,820 vehicles, up 50% over a year earlier but crimped by supplier shortages and what the company said was its own "hubris."
The Palo Alto, Calif., electric car maker had forecast 16,000 deliveries in the first quarter, a bit lower than the 17,400 cars delivered in the prior three months. Tesla doesn't disclose sales by region.
The company said it shipped 12,420 Model S sedans and 2,400 Model X sport-utility vehicles in the first three months of the year. It blamed trouble manufacturing the SUV as a result of its own "hubris in adding far too much new technology to the Model X in version 1." It lacked sufficient in-house capability to produce some of the parts, it said.
Still, Tesla said it reached production of 750 Model X cars a week by the end of March, which is roughly full capacity, and that it would maintain its forecast of between 80,000 and 90,000 deliveries in 2016.
Tesla's sales have continued to grow as it expands to new markets and increases its production capability. It sold just over 50,000 vehicles in 2015. Tesla said new orders in the first quarter exceeded its deliveries by a "wide margin."
The report comes days after Tesla started taking reservations for its Model 3, a compact sedan that seats five and has a range of 215 miles or more on a charge. Through Saturday, Tesla had logged 276,000 Model 3 reservations, each held by a $1,000 refundable deposit.
The interest in the Model 3 demonstrates a strong demand for the Tesla product that today is inhibited by the high price of its current offerings, which start at $76,000 and often sell for more than $100,000 with options.
Reservations for its coming Model 3 lifted Tesla's shares to a seven-month high, finishing up 4% at $246.99 at 4 p.m. As recently as Feb. 9, the stock exchanged hands at $142.32. Following the sales report, its shares fell 2.4% in after-hours trading on the Nasdaq.
"While in the grand scheme of the 'idea' of Tesla, the 'miss' doesn't matter much, it may stop the stock's recent positive momentum in the wake of Model 3 excitement," RBC analyst Joseph Spak said in a note. "Tesla is trying to assure the market by indicating they are working to ensure the same mistakes are not repeated with the Model 3."
Write to Mike Ramsey at michael.ramsey@wsj.com
Corrections & Amplifications
Tesla said it reached production of 750 Model X cars a week by the end of March. An earlier version of this article incorrectly said Tesla had reached production of 750 Model X cars a day by the end of March.
Credit: By Mike Ramsey
Subject: Automobile industry; Automobile sales
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 5, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778271886
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778271886?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Tesla Says Supply Woes Crimped Sales
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Apr 2016: B.3.
ProQuest document link
Abstract:
The Palo Alto, Calif., electric car maker had forecast 16,000 deliveries in the first quarter, a bit lower than the 17,400 cars delivered in the prior three months.
Full text: Tesla Motors Inc. said its first-quarter global sales rose to a less than forecast 14,820 vehicles, up 50% over a year earlier but crimped by supplier shortages and what the company said was its own "hubris."
The Palo Alto, Calif., electric car maker had forecast 16,000 deliveries in the first quarter, a bit lower than the 17,400 cars delivered in the prior three months.
The company said it shipped 12,420 Model S sedans and 2,400 Model X sport-utility vehicles in the first three months of the year. It blamed trouble manufacturing the SUV as a result of its own "hubris in adding far too much new technology to the Model X in version 1." It lacked sufficient in-house capability to produce some of the parts, it said.
Still, Tesla said it reached production of 750 Model X cars a week by the end of March, which is roughly full capacity, and that it would maintain its forecast of between 80,000 and 90,000 deliveries in 2016.
Tesla said new orders in the first quarter exceeded its deliveries by a "wide margin."
Reservations for its coming Model 3 lifted Tesla's shares to a seven-month high, finishing up 4% at $246.99 at 4 p.m.
Credit: By Mike Ramsey
Subject: Automobile sales
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Apr 5, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778346608
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778346608?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Nvidia Unveils Massive Chip to Target 'Machine Learning'; CEO predicts Tesla P100 chip would initially be purchased by unidentified cloud computing services
Author: Clark, Don
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Apr 2016: n/a.
ProQuest document link
Abstract:
Related * HP Enterprise Bets on 'Machine Learning' Cloud Service * Testing to Start for Computer With Chips Inspired by the Human Brain * Amazon Enters Semiconductor Business With Its Own Branded Chips Mr. Huang said the DGX-1, as the new computer is called, can process artificial intelligence tasks as rapidly as 250 servers powered by general-purpose chips like Intel's--an installation that would cost much more.
Full text: SAN JOSE, Calif.--Nvidia Corp. is stepping up plans to expand beyond computer graphics into the field of artificial intelligence, unveiling an unusual processor for the purpose and a computer that uses it to solve scientific problems at extremely high speed.
The company on Tuesday said the new Tesla P100 chip, designed for use in corporate data centers, achieves very high performance by packing 15 billion transistors on a piece of silicon. That is roughly twice as many as Nvidia's prior high-end graphics processor and some new server chips Intel Corp. announced last week .
"It's the largest chip that has ever been made," said Jen-Hsun Huang, Nvidia's chief executive, during a speech kicking off the company's annual technology conference here.
He predicted the chip would initially be purchased by unidentified cloud computing services and next year would begin arrive in servers sold by other companies. Meanwhile, Nvidia plans to offer its own $129,000 computer that comes with eight Tesla P100 chips and software for artificial intelligence applications.
Related
* HP Enterprise Bets on 'Machine Learning' Cloud Service
* Testing to Start for Computer With Chips Inspired by the Human Brain
* Amazon Enters Semiconductor Business With Its Own Branded Chips
Mr. Huang said the DGX-1, as the new computer is called, can process artificial intelligence tasks as rapidly as 250 servers powered by general-purpose chips like Intel's--an installation that would cost much more. A typical chore that would take 150 hours on one standard server, Mr. Huang said, would take two hours on the DGX-1.
Nvidia, based in Santa Clara, Calif., has been on a multiyear crusade to find users beyond videogames for the chips called GPUs, for graphics processing units. The chips, which feature hundreds of simple processors--compared with between one and 22 large calculating engines found on a typical microprocessor--are already used to solve scientific problems in many large supercomputers.
Mr. Huang recently has focused on artificial intelligence, especially a technique called machine learning that is useful for recognizing images and spoken language. Where conventional image-recognition requires programmers to explicitly define the characteristics of a face, machine-learning software enables computers to learn to pick out faces by surveying huge quantities of so-called training photos.
Nvidia already sells GPUs and special-purpose computers that use machine learning to help cars map their surroundings, detect hazards and drive on their own. Among other announcements at the event Tuesday, the company said its hardware would be used by entrants in an event called Roborace that is designed to test autonomous sports cars.
Mr. Huang said Massachusetts General Hospital would be one of the first customers for its DGX-1 system, which will help analyze around 10 billion medical images to help study disease and devise new treatments.
Companies are trying other kinds of chips to accelerate machine-learning jobs. International Business Machines Corp., for example, in 2014 announced a chip designed to function more like the human brain than other processors.
Patrick Moorhead, an analyst at Moor Insights & Strategy, noted that other companies are coming up with original chip designs or using chips that can be electrically configured after they leave the factory. But he said Nvidia is likely to have an impact on fields where speed is important.
"This means instead of waiting for a day to train the system, you could do that in hours," he said.
Nvidia is also betting heavily on virtual reality to drive demand for GPUs. Mr. Huang on Tuesday demonstrated a new technology called Iray that uses hardware in data centers to help generate 3-D landscapes than look much more like photographic imagery than today's VR systems.
Write to Don Clark at don.clark@wsj.com
Credit: By Don Clark
Subject: Graphics boards; Brain; Artificial intelligence; Semiconductors
Company / organization: Name: Intel Corp; NAICS: 334419, 511210, 334210, 334413, 334614
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 5, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778495839
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778495839?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Model X: Electric Meets Extravagant; With gull-wing doors and Lamborghini-like acceleration, Tesla's Model X P90D Ludicrous--an electric all-wheel-drive luxury SUV--comes loaded with contradiction
Author: Neil, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Apr 2016: n/a.
ProQuest document link
Abstract:
Horsepower/torque: 532 hp/713 pound-feet of torque Length/weight: 198.3 inches/5,381 pounds Wheelbase: 116.7 inches 0-60 mph: 3.2 seconds Towing capacity: 5,000 pounds Cargo capacity: 77 cubic feet (total interior storage, six-seat configuration) A bit of context: Mr. Musk has copped to overreach with the Model X. Maybe he tried to do too much, what with the Model X's sensor-rich Autopilot driver aids; the dancing shuttle-craft seats; the HEPA air filtration system with the "Bioweapon Defense Mode" setting; the panoramic windscreen, a stunning soap bubble of a canopy over your head.
Full text: LET'S ADDRESS WHAT some might consider the morally inconsistent status of an all-electric luxury SUV costing $135,400. By design, the Tesla Model X P90D Ludicrous (that's the real name, apparently) is meant to be green and efficient--and well-to-wheel, net-to-net, EVs are way cleaner than gas-powered cars. Electric vehicles are a technical expression of our belief that the atmosphere is the blue commons, owned by all. Egalitarian in impulse, in other words.
But the Model X is also the rarest sushi of materialism, class privilege under a blister of tinted glass, a suede-lined pachinko parlor of the soul. Just remember as you pull up to Nobu in West Hollywood and supermodels come running out to the valet to take a picture with your Model X with the doors up: You're saving the planet.
Here's the hard part for most people: It can be both. A feature of a free society is that some have more than others; such are the risks and rewards of capitalism. This is a given. This is gravity. But everyone, no matter their lifestyles, can consume less. And, by the power of numbers, a lot of lesses add up to quite a lot.
So some Hollywood celebrity downsizes to a Gulfstream IV and now she's Mother Earth? Well, yes. Consider it a self-imposed carbon flat tax.
Related
* Tesla's Model 3: Electric on the Inside and Out
* Tesla Motors Says Reservations for Model 3 Surpass 276,000
* How Tesla Leaves its Rivals Playing Catch Up
F. Scott Fitzgerald said the test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still function. It also seems to apply to the Model X's famous Falcon Wing Doors, since they are simultaneously unnecessary and absolutely vital to the entire enterprise; deeply thought-through yet completely spurious; impractical and...well, more impractical. But you get used to them, because they are so cool. See above re: supermodels.
Or retired aerospace engineers. Or French tourists. Or the hard-core, mainlining petrolheads who kept me waiting in the parking lot at Venice Beach, Calif., while they selfied themselves, laughing madly, sitting in mid-row seats while the doors were up. When all the doors are open you can look through the Model X as if it were a picture window with a Tesla-shaped sill and sash.
Would minivan-style doors have been a more sensible technical solution to a mid-row door opening? Infinitely. You could have done the doors off the Dubonnet Xenia easier that the Model X. But the spell these doors cast--let's call it emotional engineering--is payoff for some of the shrewdest design money ever spent.
2016 Tesla Model X P90D Ludicrous
Price, as tested: $135,400
Powertrain: all-electric all-wheel system comprising dual three-phase, four-pole AC induction motors; liquid-cooled lithium-ion battery pack (90kWh nominal); on-board charger and supercharger enabled; permanent all-wheel drive.
Horsepower/torque: 532 hp/713 pound-feet of torque
Length/weight: 198.3 inches/5,381 pounds
Wheelbase: 116.7 inches
0-60 mph: 3.2 seconds
Towing capacity: 5,000 pounds
Cargo capacity: 77 cubic feet (total interior storage, six-seat configuration)
A bit of context: The Falcon Wing Doors came about because Tesla CEO Elon Musk liked them and wanted them, full stop. He has said he didn't want the production car to be a dialed-back version of the concept car, which is just the sort of initiative and forward thinking that gets people cashiered from General Motors.
To aficionados, Mr. Musk's move smacked of pride since in over a century of automotive design, from the Mercedes-Benz 300SL Gullwing to the DeLoreans to Lambos, gullwing doors have always looked cool and never really worked.
To name a few of the problems: ease of entry and exit, weather sealing and wind noise. From a safety standpoint, center-hinged overhead doors cut into the kind of rectangular geometry around a door opening that lends it rigidity.
What if it snows overnight? What if it's raining? Where do you put the ski racks and bicycles and the Thule roof module full of hiking gear?
Who cares? Have you seen the doors open?
Most maddening was creating a dead-stable pivot point for the doors, which rise and fall slowly on the motorized breeze not like falcon wings but more like seagull wings, with a double fold. The solution required a heroic amount of costly magnesium in the car's dorsal spine.
Mr. Musk has copped to overreach with the Model X. Maybe he tried to do too much, what with the Model X's sensor-rich Autopilot driver aids; the dancing shuttle-craft seats; the HEPA air filtration system with the "Bioweapon Defense Mode" setting; the panoramic windscreen, a stunning soap bubble of a canopy over your head. Dude, you're forgiven. But then again, I'm not a stockholder.
Practicality for fascination. This is the card Mr. Musk continues to play to his advantage. This is the part of the Tesla business plan that might as well have been quoted out of the Old Testament. The rich will want the riches.
Not to be confused with the Model 3 compact sedan that debuted so boffo this week, the Model X is a full-size SUV with dual electric motors front and rear, providing all-wheel drive. Although its body structure is almost entirely aluminum and magnesium, our flagship test car (P90D Ludicrous) was quoting a massive 5,381 pounds, most of it in the floor-mounted battery pack. Four-corner air suspension with five ride-height settings, from off-road to highway, is standard.
The Model X is a luxury family mover, with five-, six- or seven-passenger seating options, with a rear trunk and a frunk (a front trunk). The deeply tinted glass canopy creates a pretty magical space, although (another old lesson, relearned) the California sun is too bright through the roof glass. I understand additional tinting is available.
The front and mid-row seats are mounted on powered pedestals that glide forward as if to a Strauss waltz, easing access to the third row's two cozy bucket seats. The seats' pedestal mountings allow passengers more foot room than otherwise.
All the doors open electrically, which can take some getting used to. If you get in and put your right foot on the brake, the driver's door will swing closed, even if you have not yet retrieved your left leg. The door will gently gnaw on it until you take your foot off the brake.
The price for the "standard" Model X 70S with a 70kWh battery is $80,000, which is about $5,000 more than a base Model S--a fact that is academic because Tesla won't be building any base Model X's for some time.
The company will instead be filling orders for the flagship P90D ("P" for performance). These will come with a face-flapping 713 pound-feet of insta-torque from two huge four-pole AC induction motors ($35,000) and the famous "Ludicrous" Drive Mode ($10,000), which essentially permits the battery to violently eject electrons in pursuit of maximum acceleration. In Ludicrous Mode, the Model X P90D max output is 532 hp.
That's the version that Tesla provided me, and I want them to know, I'm on to their game. It is very hard to find fault with a six-seat SUV that accelerates like a Formula Atlantic open-wheeler. Jeebus. Stamp the accelerator and it goes off like a sprung mousetrap. Tesla estimates 0-60 mph in a Lambo-like 3.2 seconds. While doing so, the Model X quietly withdraws everything from your pockets and scatters it conveniently under the back seats.
And then, between 50 and 100 mph, it's goodbye, Charlie. The P90D Ludicrous operates at an entirely different frame rate than just about anything on the street in L.A. It takes a sustainably harvested baseball bat to Panzer wagons like Porsche Cayenne Turbo and Range Rover Sport SVR.
Around the City of Angels, the sweet, effortless blurt of our EV hot-rod tempted me to do, well, questionable things. No yellow light ever turns red for the Model X P90D. No hole that opens up in traffic is ever too small or far away.
Falcon wings? Maybe Icarus. But if the Model X flies too close to the sun, there's always more window tint.
Credit: By Dan Neil
Subject: Product design; Automobile industry
Location: California
People: Fitzgerald, F Scott (1896-1940)
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 7, 2016
column: Rumble Seat
Section: Life
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1779198579
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1779198579?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Recalls Model X SUVs for Problem With Third-Row Seat; Recall comes as car maker tries to ramp up production
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Apr 2016: n/a.
ProQuest document link
Abstract:
Electric car maker Tesla Motors Inc. is recalling 2,700 Model X sport-utility vehicles to repair their third-row seats, which could fold forward and become unlatched in an accident.
Full text: Electric car maker Tesla Motors Inc. is recalling 2,700 Model X sport-utility vehicles to repair their third-row seats, which could fold forward and become unlatched in an accident.
Tesla said it found the problem in its internal testing before the start of delivery of vehicles to Europe, and it has received no reports of seat failures or of any accidents due to the seat latch.
The recall comes at a crucial time for Tesla as it tries to ramp up production of the $81,000 and up vehicle. Tesla has said production of the SUV had reached 750 vehicles a week at the end of March, after struggling with parts supply shortages earlier in the year.
Palo Alto, Calif.-based Tesla plans to fix the vehicles over the next five weeks and asks that passengers temporarily refrain from sitting in the last row.
Tesla's ability to smoothly launch a vehicle and ramp up to full production is paramount as the company looks toward the launch of its next car, the Model 3 , a five-seat sedan for which it already has logged 325,000 reservations. That car, due out in late 2017, will require the company to scale up production quickly.
More Reading
* Tesla Model X: Electric Meets Extravagant
* Tesla Motors Says Reservations for Model 3 Surpass 276,000
* Huge Backlog Leaves Tesla Little Time to Ramp Up Model 3 Production
The Model X launch has been slow as the company has dealt with challenges related to the middle-row seats and the vertically rising falcon-wing doors.
The recall includes all the vehicles built before March 26. Futuris Automotive, an Australian company that makes interiors, built the seats. Tesla already had taken over production of the middle row seats from Futuris, bringing the production in-house. Futuris will accept the cost related to the recall, the company said.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Minivans; Automobile industry; Vehicles; Product recalls
Location: Europe Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 11, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1779953229
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1779953229?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Tesla Recalls SUV to Fix Seat
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Apr 2016: B.3.
ProQuest document link
Abstract:
Electric car maker Tesla Motors Inc. is recalling 2,700 Model X sport-utility vehicles to repair their third-row seats, which could fold forward and become unlatched in an accident.
Full text: Electric car maker Tesla Motors Inc. is recalling 2,700 Model X sport-utility vehicles to repair their third-row seats, which could fold forward and become unlatched in an accident.
Tesla said it found the problem in its internal testing before the start of delivery of vehicles to Europe, and it has received no reports of seat failures or of any accidents due to the seat latch.
The recall comes at a key time for Tesla as it ramps up production of the $81,000 and up vehicle.
Tesla has said production of the SUV had reached 750 vehicles a week at the end of March, after struggling with parts supply shortages earlier in the year.
Palo Alto, Calif.-based Tesla plans to fix the vehicles over the next five weeks, asking passengers to temporarily refrain from sitting in the last row.
Tesla's ability to smoothly launch a vehicle and ramp up to full production is paramount as the company looks toward the launch of its next car, the Model 3, a five-seat sedan for which it already has logged 325,000 reservations. That car, due out in late 2017, will require the company to scale up production quickly.
The Model X launch has been slow as the company has dealt with challenges related to the middle-row seats and the vertically rising falcon-wing doors.
The recall includes all the vehicles built before March 26. Futuris Automotive, an Australian company that makes interiors, built the seats. Tesla already had taken over production of the middle-row seats from Futuris, bringing the production in-house. Futuris will accept the cost related to the recall, the company said.
Credit: By Mike Ramsey
Subject: Automobile safety; Sport utility vehicles; Product recalls
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Apr 12, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780086480
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780086480?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Recalls Model X SUVs for Problem With Third-Row Seat; Recall comes as car maker tries to ramp up production
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
ProQuest document link
Abstract:
Electric car maker Tesla Motors Inc. is recalling 2,700 Model X sport-utility vehicles to repair their third-row seats, which could fold forward and become unlatched in an accident.
Full text: Electric car maker Tesla Motors Inc. is recalling 2,700 Model X sport-utility vehicles to repair their third-row seats, which could fold forward and become unlatched in an accident.
Tesla said it found the problem in its internal testing before the start of delivery of vehicles to Europe, and it has received no reports of seat failures or of any accidents due to the seat latch.
The recall comes at a crucial time for Tesla as it tries to ramp up production of the $81,000 and up vehicle. Tesla has said production of the SUV had reached 750 vehicles a week at the end of March, after struggling with parts supply shortages earlier in the year.
Palo Alto, Calif.-based Tesla plans to fix the vehicles over the next five weeks and asks that passengers temporarily refrain from sitting in the last row.
Tesla's ability to smoothly launch a vehicle and ramp up to full production is paramount as the company looks toward the launch of its next car, the Model 3 , a five-seat sedan for which it already has logged 325,000 reservations. That car, due out in late 2017, will require the company to scale up production quickly.
More Reading
* Tesla Model X: Electric Meets Extravagant
* Tesla Motors Says Reservations for Model 3 Surpass 276,000
* Huge Backlog Leaves Tesla Little Time to Ramp Up Model 3 Production
The Model X launch has been slow as the company has dealt with challenges related to the middle-row seats and the vertically rising falcon-wing doors.
The recall includes all the vehicles built before March 26. Futuris Automotive, an Australian company that makes interiors, built the seats. Tesla already had taken over production of the middle row seats from Futuris, bringing the production in-house. Futuris will accept the cost related to the recall, the company said.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Minivans; Automobile industry; Vehicles; Product recalls
Location: Europe Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780134890
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780134890?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla CEO Elon Musk's $37,584 Salary Reflects California Minimum Wage; Musk's stake in Tesla valued at about $9.5 billion
Author: Beckerman, Josh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Apr 2016: n/a.
ProQuest document link
Abstract:
Consistent with our historical compensation philosophy, we do not currently provide our senior executive officers with any form of a cash bonus program," Tesla said in its proxy filing.
Full text: Tesla Motors Inc. Chief Executive Elon Musk's total compensation last year was valued at $37,584, in contrast to figures for prominent CEOs that occasionally reach eight digits including elements like stock awards.
Mr. Musk, the biggest shareholder of the electric car company, has never accepted his salary. The amount reflects minimum wage requirements in California.
Chief Financial Officer Jason Wheeler's compensation was valued at $20.9 million, almost entirely from a new-hire stock-option grant.
Mr. Musk owned about 37.2 million Tesla shares, a 26.5% stake, as of Dec. 31. Based on Friday's closing price, that stake would be worth roughly $9.47 billion.
Mr. Musk is also the chairman of SolarCity Corp. and the founder and CEO of privately held SpaceX.
"Our current compensation programs reflect our startup origins in that they consist primarily of salary and equity awards. Consistent with our historical compensation philosophy, we do not currently provide our senior executive officers with any form of a cash bonus program," Tesla said in its proxy filing.
Other big names receiving low compensation including Facebook Inc. CEO Mark Zuckerberg, who received a $1 base salary in 2014. The remainder of his listed compensation of $610,455 reflected the value of personal flights on planes chartered by Facebook.
On Friday, Twitter Inc. said CEO Jack Dorsey's 2015 total compensation was valued at $68,506 .
Earlier this month, Tesla said reservations for the Model 3, due out late next year, totaled more than 325,000 in the first week, representing about $14 billion in potential revenue.
Write to Josh Beckerman at josh.beckerman@wsj.com
Credit: By Josh Beckerman
Subject: Executive compensation; Wages & salaries
Location: California
People: Dorsey, Jack Zuckerberg, Mark
Company / organization: Name: Facebook Inc; NAICS: 519130, 518210; Name: Twitter Inc; NAICS: 519130; Name: SolarCity Corp; NAICS: 238220, 333414, 221114; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 15, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781242688
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781242688?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Quality Woes a Challenge for Tesla's High-Volume Car; Door and seat glitches with Model X sport-utility overshadow mass-market ambitions
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Apr 2016: n/a.
ProQuest document link
Abstract:
Anne Carter had her Tesla Motors Inc. Model X sport-utility vehicle for a few days before the $138,000 electric vehicle suffered a mechanical malfunction. During a very critical time for the pioneering electric-car maker, its well-to-do customers are confronting not only problems with the Model X's rear doors but other issues, including a seat latch the company has recalled.
Full text: Anne Carter had her Tesla Motors Inc. Model X sport-utility vehicle for a few days before the $138,000 electric vehicle suffered a mechanical malfunction.
On a recent morning, the car's falcon-wing doors wouldn't open as she prepared to drive her children's carpool to school. "It's a bummer; you spent all this money...and the doors won't open," she said in an interview while waiting for the Model X to be picked up for repairs. She expected some issues, but feels embarrassed that friends might think: "Look at the Carters--they spent all this money and the doors don't work."
During a very critical time for the pioneering electric-car maker, its well-to-do customers are confronting not only problems with the Model X's rear doors but other issues, including a seat latch the company has recalled. Whether the Palo Alto, Calif., company can quickly resolve these new-model glitches and avoid them in the future will be key to proving it can deliver vehicles in high volumes without a hiccup.
Related
* Tesla Recalls Model X for Problem with Third-Row Seat
* Tesla Motors Says Reservations for Model 3 Surpass 276,000
* Tesla Model X: Electric Meets Extravagant
Tesla says it is quickly addressing its manufacturing problems. And improving its ability to bring high-quality vehicles to market is a priority for Chief Executive Elon Musk. Senior executives are meeting weekly with personnel from engineering and manufacturing to ensure a smooth launch next year of its first affordable car, the Model 3.
Earlier this month, Tesla recalled 2,700 Model X cars to fix a third-row seat latch that could come undone and allow the seat to fold forward during a collision. The company has advised owners to keep passengers from that row until repairs are made and is providing loaner vehicles to some.
The company's reputation has suffered. Online forums, Facebook groups and auto reviewers and competitors point to the Model X's problems as a reason to be skeptical about the company's plan to ramp up its output. Tesla aims to build 500,000 vehicles a year by 2020, most of which will be the Model 3, a sedan intended to compete with mass-market brands like Chevrolet.
The company's car deliveries--a metric closely watched by investors and analysts--fell short of the first quarter goal by 1,200 units, or nearly 10%. Parts shortages were partially to blame, but so were sourcing changes that came late in production planning. Tesla took the rare move bringing the manufacture of middle seats in-house not long before the car's launch.
Jon McNeill, Tesla's president of sales and service, said the company is rapidly responding to issues, many of which have been addressed through a software fix downloaded to customers through over-the-air updates.
"The customer satisfaction levels for owners of the Model X are about the same as the Model S," Mr. McNeill said, referring to the sedan that Tesla launched in 2012. The falcon-wing door problems "are largely behind us."
Some owners are still waiting for repairs.
Brad Ledwith, a financial adviser from Morgan Hill, Calif., got his Model X on the last day of March and loved it, immediately hitting the highway and trying out new features. When the falcon wing doors gave out only a few days later, he at first thought his children were to blame.
After learning the problem was related to manufacturing glitches, Mr. Ledwith called his local showroom, but Tesla's service outlet was overloaded with repair orders. It would be two weeks before the car could be fixed, he was told.
"I think to myself, I am willing to concede a couple of things, but it is just I'm leasing this car for $1,350 per month," said Mr. Ledwith, a former BMW X5 owner. "If it is out two weeks, that costs $700."
Tesla rented a Chrysler Town & Country for Mr. Ledwith.
Ms. Carter, also the recipient of a rental, is grateful for the customer care but hopes Tesla doesn't replicate that offer with the cheaper and higher-volume Model 3. "They better not offer that," she said. "I want to be getting something for paying so much for my car."
It will be years until the Model X's longer term quality is well documented, but its predecessor, the Model S, has had a bumpy road. Consumer Reports last year pulled its recommendation for the Model S because of reliability problems even though reviewers loved driving the car so much they initially gave it the highest score ever.
Mark Rechtin, a Consumer Reports editor, said the product review magazine recommends avoiding new cars in the first year of production, especially those loaded with new technology. "This is one thing if you have the white-glove services," he said. "The bigger concern is that you are starting to have tens of thousands of vehicles out in the fleet."
Having cars with a suite of popular features, such as driving-assist Autopilot functions, Mr. Musk's Tesla has won the loyalty of many of his customers--even when they encounter problems. But its ability to move into high-volume production is putting that loyalty to the test.
"I am totally willing to overlook the issues if Tesla fixes it," Ms. Carter said, estimating one or two trips to the dealer is what it should take. If she had the same problem on her Cadillac Escalade SUV, she said she "would be furious."
John D. Stoll contributed to this article.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Manufacturing; Vehicles; Production planning
People: Musk, Elon
Product name: BMW X5, Chrysler Town & Country
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 19, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economi cs
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781958165
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781958165?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Quality Woes a Challenge for Tesla's High-Volume Car; Door and seat glitches with Model X sport-utility overshadow mass-market ambitions
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Apr 2016: n/a.
ProQuest document link
Abstract:
Anne Carter had her Tesla Motors Inc. Model X sport-utility vehicle for a few days before the $138,000 electric vehicle suffered a mechanical malfunction. During a very critical time for the pioneering electric-car maker, its well-to-do customers are confronting not only problems with the Model X's rear doors but other issues, including a seat latch the company has recalled.
Full text: Anne Carter had her Tesla Motors Inc. Model X sport-utility vehicle for a few days before the $138,000 electric vehicle suffered a mechanical malfunction.
On a recent morning, the car's falcon-wing doors wouldn't open as she prepared to drive her children's carpool to school. "It's a bummer; you spent all this money...and the doors won't open," she said in an interview while waiting for the Model X to be picked up for repairs. She expected some issues, but feels embarrassed that friends might think: "Look at the Carters--they spent all this money and the doors don't work."
During a very critical time for the pioneering electric-car maker, its well-to-do customers are confronting not only problems with the Model X's rear doors but other issues, including a seat latch the company has recalled. Whether the Palo Alto, Calif., company can quickly resolve these new-model glitches and avoid them in the future will be key to proving it can deliver vehicles in high volumes without a hiccup.
Related
* Tesla Recalls Model X for Problem with Third-Row Seat
* Tesla Motors Says Reservations for Model 3 Surpass 276,000
* Tesla Model X: Electric Meets Extravagant
Tesla says it is quickly addressing its manufacturing problems. And improving its ability to bring high-quality vehicles to market is a priority for Chief Executive Elon Musk. Senior executives are meeting weekly with personnel from engineering and manufacturing to ensure a smooth launch next year of its first affordable car, the Model 3.
Earlier this month, Tesla recalled 2,700 Model X cars to fix a third-row seat latch that could come undone and allow the seat to fold forward during a collision. The company has advised owners to keep passengers from that row until repairs are made and is providing loaner vehicles to some.
The company's reputation has suffered. Online forums, Facebook groups and auto reviewers and competitors point to the Model X's problems as a reason to be skeptical about the company's plan to ramp up its output. Tesla aims to build 500,000 vehicles a year by 2020, most of which will be the Model 3, a sedan intended to compete with mass-market brands like Chevrolet.
The company's car deliveries--a metric closely watched by investors and analysts--fell short of the first quarter goal by 1,200 units, or nearly 10%. Parts shortages were partially to blame, but so were sourcing changes that came late in production planning. Tesla took the rare move bringing the manufacture of middle seats in-house not long before the car's launch.
Jon McNeill, Tesla's president of sales and service, said the company is rapidly responding to issues, many of which have been addressed through a software fix downloaded to customers through over-the-air updates.
"The customer satisfaction levels for owners of the Model X are about the same as the Model S," Mr. McNeill said, referring to the sedan that Tesla launched in 2012. The falcon-wing door problems "are largely behind us."
Some owners are still waiting for repairs.
Brad Ledwith, a financial adviser from Morgan Hill, Calif., got his Model X on the last day of March and loved it, immediately hitting the highway and trying out new features. When the falcon wing doors gave out only a few days later, he at first thought his children were to blame.
After learning the problem was related to manufacturing glitches, Mr. Ledwith called his local showroom, but Tesla's service outlet was overloaded with repair orders. It would be two weeks before the car could be fixed, he was told.
"I think to myself, I am willing to concede a couple of things, but it is just I'm leasing this car for $1,350 per month," said Mr. Ledwith, a former BMW X5 owner. "If it is out two weeks, that costs $700."
Tesla rented a Chrysler Town & Country for Mr. Ledwith.
Ms. Carter, also the recipient of a rental, is grateful for the customer care but hopes Tesla doesn't replicate that offer with the cheaper and higher-volume Model 3. "They better not offer that," she said. "I want to be getting something for paying so much for my car."
It will be years until the Model X's longer term quality is well documented, but its predecessor, the Model S, has had a bumpy road. Consumer Reports last year pulled its recommendation for the Model S because of reliability problems even though reviewers loved driving the car so much they initially gave it the highest score ever.
Mark Rechtin, a Consumer Reports editor, said the product review magazine recommends avoiding new cars in the first year of production, especially those loaded with new technology. "This is one thing if you have the white-glove services," he said. "The bigger concern is that you are starting to have tens of thousands of vehicles out in the fleet."
Having cars with a suite of popular features, such as driving-assist Autopilot functions, Mr. Musk's Tesla has won the loyalty of many of his customers--even when they encounter problems. But its ability to move into high-volume production is putting that loyalty to the test.
"I am totally willing to overlook the issues if Tesla fixes it," Ms. Carter said, estimating one or two trips to the dealer is what it should take. If she had the same problem on her Cadillac Escalade SUV, she said she "would be furious."
John D. Stoll contributed to this article.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Manufacturing; Vehicles; Production planning
People: Musk, Elon
Product name: BMW X5, Chrysler Town & Country
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 21, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economi cs
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782327304
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782327304?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Elon Musk Supports His Business Empire With Unusual Financial Moves; From personal loans to buying stock, billionaire leader of Tesla, SpaceX and SolarCity has provided help even though it could be risky
Author: Pulliam, Susan; Ramsey, Mike; Mullins, Brody
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Apr 2016: n/a.
ProQuest document link
Abstract:
Since October 2014, SolarCity Corp. has tried to lure individual investors to the solar-power business by pitching $214 million of what it calls "solar bonds" through the company's website. According to Tesla's latest proxy statement, Mr. Musk owns 37 million shares of Tesla, or roughly a 27% stake worth about $9.38 billion as of Tuesday's close.
Full text: Since October 2014, SolarCity Corp. has tried to lure individual investors to the solar-power business by pitching $214 million of what it calls "solar bonds" through the company's website.
The biggest buyer by far, though, was rocket maker Space Exploration Technologies Inc., including $90 million of $105 million sold last month.
The bonds were an "excellent investment," billionaire entrepreneur Elon Musk said in an interview. And he knows more about the companies than anyone. Mr. Musk is their largest shareholder, the chairman of SolarCity and chief executive of SpaceX.
Mr. Musk, 44 years old, has built a business empire like no other in the world, fueled by his voracious appetite for risk and unyielding confidence. The three companies he leads--SolarCity, SpaceX and car maker Tesla Motors Inc.--are worth nearly $50 billion combined.
He has transformed every industry he has touched, speaking without irony about retiring to Mars after SpaceX successfully launches rockets there .
Along the way, Mr. Musk has helped financially support his companies in ways that are as unconventional as he is.
In addition to the bond purchases, he has taken out $475 million in personal credit lines, buying shares of SolarCity and Tesla when they needed capital, securities filings show.
The credit lines are secured with about $2.52 billion of Mr. Musk's shares in SolarCity and Tesla, based on their closing prices Tuesday.
Few top executives use their shares as collateral for personal loans because it can be risky to other shareholders and also raises concerns that the executive's personal interests could conflict with the company's interests.
If the stock price slides, that could trigger a margin call requiring the executive to sell the shares or put up more collateral to repay the loan.
In securities filings, Tesla has disclosed the possibility of margin calls related to Mr. Musk's loans, which it said "may cause the price of our common stock to decline further."
Last year, Valeant Pharmaceuticals International Inc. shares fell 14% in one day after CEO Michael Pearson received a margin call on $100 million in loans backed by some of his shares in the drug company. Mr. Pearson's lender sold 1.3 million of his shares to meet the margin call .
Some corporate-governance experts and analysts say it is even more questionable for Mr. Musk to borrow large amounts of money backed by chunks of stock now that SolarCity and Tesla are big public companies.
"As an analyst, it is often a red flag for me when companies and management direct loans between entities they have personal or financial interests in," said Nathan Weiss, founder and senior analyst at independent research firm Unit Economics LLC in East Greenwich, R.I.
Mr. Musk said it is "valid" to question his large personal borrowings and the financial shuffling between SolarCity, SpaceX and Tesla.
"There were a few cases where one company was doing considerably better than another, and I borrowed money," he said in the interview.
Mr. Musk defends the moves as consistent with his philosophy that "if I ask investors to put money in, then I feel morally I should put money in as well," Mr. Musk said. "I should not ask people to eat from the fruit bowl if I have not myself been willing to eat from the fruit bowl."
Mr. Musk said it is "important that there not be some sort of house of cards that crumbles if one element of the pyramid of Tesla, SolarCity and SpaceX falters."
He said his loans aren't risky to shareholders because they add up to less than 5% of his total net worth, which exceeds $10 billion. That figure doesn't include Mr. Musk's large stake in SpaceX, which is private. He said he could easily put up more SpaceX or Tesla shares as collateral if needed.
"The odds that a margin call cannot be addressed are almost zero," Mr. Musk said in the interview.
He has had a string of triumphs lately. Tesla unveiled its Model 3 sedan to rave reviews and said 325,000 people pledged $1,000 each in the first seven days to reserve cars. Tesla shares are up 77% since Feb. 10. Tesla is the first successful major U.S. auto-company startup since 1925.
On April 8, SpaceX managed to land a rocket in the middle of the Atlantic Ocean on a floating, Global Positioning System-controlled platform for the first time in the company's history.
According to Tesla's latest proxy statement, Mr. Musk owns 37 million shares of Tesla, or roughly a 27% stake worth about $9.38 billion as of Tuesday's close.
Mr. Musk holds a 22% stake in SolarCity, another securities filing shows. Those 21.8 million shares were worth about $719 million as of Tuesday.
SpaceX was valued at $12 billion in a funding round earlier this year. His ownership stake in SpaceX isn't public, and he declined to disclose it.
At Tesla, Mr. Musk is chairman and chief executive but takes no salary. His total compensation last year was valued at $37,584 , reflecting minimum wage requirements in California, but he has never accepted the money.
Mr. Musk got $1.2 million in total compensation from SolarCity, almost all in the form of stock options that vest over three years.
His compensation at SpaceX is about $2.4 million, according to a government website that lists company contracts. A person familiar with the matter said the total includes a salary of $38,000 and the rest in equity.
A study in February by ISS QuickScore, part of proxy adviser Institutional Shareholder Services Inc., found that executives or directors at just 13% of the 3,000 largest publicly traded U.S. companies have pledged shares for loans.
SolarCity and Tesla shares are volatile. SolarCity, which is based in San Mateo, Calif., and installs solar panels at residences across the U.S., has seen its stock price fall about 35% since the start of this year. Tesla fell 40% from the end of December to February, but has since erased those declines.
Mr. Musk said he has "made it clear to shareholders that I subscribe to the notion that the captain is the last person off the ship." In the interview, he said he has no intention of ever selling any Tesla shares and could even add some of his SpaceX stake to the collateral.
Stephen Jurvetson, a founding partner of venture-capital firm Draper Fisher Jurvetson, an early and large investor in SpaceX, Tesla and SolarCity, said the moves by Mr. Musk aren't cause for concern.
Mr. Musk's "passion is breathtaking," said Mr. Jurvetson, a director at SpaceX and Tesla. He praised what he called Mr. Musk's dedication and vision.
Asked if Mr. Musk's personal loans are in the best interest of shareholders and if directors have discussed the matter, Mr. Jurvetson replied: "I don't have a desire to take on that question."
Mr. Jurvetson added: "You want to look at it as a percentage of his holdings." As long as Mr. Musk ties up less than 5% of his holdings, "you don't have much to talk about," though it is "something that should be watched," said Mr. Jurvetson. Mr. Musk said he set the 5% threshold himself.
Mr. Musk helped spawn SolarCity, SpaceX and Tesla using $165 million reaped from the 2002 sale of his stake in online-payments processor PayPal Holdings Inc.
From the start , he was willing to use money from one fledgling company to help another.
In late 2008 , Tesla faced a potential financial collapse because of tightened access to funding, as well as manufacturing delays related to its newly launched Roadster electric car.
Mr. Musk pledged to invest $20 million of his own money into Tesla as part of a $40 million funding round for the company.
Around the same time, SpaceX, of Hawthorne, Calif., was struggling to develop its rocket-launch business and was running low on cash. Then it won a $1.6 billion contract from the National Aeronautics and Space Administration to send 12 unmanned cargo capsules to help resupply the international space station, according to news releases.
In early 2009, Mr. Musk personally borrowed $20 million from SpaceX. In the interview, he said the loan was "to help fund Tesla."
Tesla went public in June 2010. Mr. Musk said he repaid the SpaceX loan with interest by selling 1.4 million shares of Tesla for about $23.8 million. He said that was the only time he has ever sold any shares in the auto maker.
In early 2013 , Tesla was running out of cash as it struggled to produce Model S sedans, and the cars were plagued by faulty drive motors and other issues. SolarCity needed cash to help run its solar-panel leasing business.
Musk increased his credit lines to a total of $300 million from the previous $85 million, securities filings show. His lenders, Goldman Sachs Group Inc. and Morgan Stanley, declined to comment.
Securities filings show that 9.5 million Tesla shares, or 29% of his total holdings, were pledged as collateral on the credit lines. He also put up six million SolarCity shares, or 29% of his overall stake.
From May 2013 to October 2013, Mr. Musk used some of the money he tapped from the credit lines to buy $100 million of Tesla shares and $10 million of SolarCity shares in stock offerings that injected both companies with capital, according to securities filings.
A SolarCity spokesman said Mr. Musk's investment "represented a relatively small percentage of the $398 million raised in the transaction."
Last year, Tesla burned through more than $1.5 billion in cash reserves, according to analysts. Some analysts fretted about delays in deliveries of the auto maker's new Model X sport-utility vehicle.
SolarCity stumbled as its costs rose and it cut an important growth target by half. Investors also worried that SolarCity could lose the benefit of some tax credits, though that didn't happen.
A SolarCity spokesman said the target was cut because the company wanted to focus on profitability.
Tesla disclosed last year that Mr. Musk had boosted his personal credit lines to a total of $475 million. He bought $20 million of Tesla shares and $17.7 million of shares in SolarCity, securities filings show.
In the interview, Mr. Musk said his stock purchases show that he is aligned with investors in both companies. He said he has borrowed less than 65% of the money available from the two credit lines.
SolarCity's solar-bond offerings have gotten three separate boosts from SpaceX. Securities filings show SpaceX bought $90 million of the bonds in March 2015, $75 million last June and another $90 million last month.
Gordon Johnson, an analyst at Axiom Capital Management in New York who follows Tesla, said most retail investors weren't interested enough in the solar bonds to buy them. SolarCity said the bond offerings have attracted investors from all 50 U.S. states.
Last November, an entity affiliated with Mr. Musk bought $10 million of a $113 million convertible SolarCity bond issue. Lyndon Rive, who is SolarCity's chief executive and a cousin of Mr. Musk, bought $3 million of the remaining $103 million, according to the company.
Mr. Rive said the bonds are a "good investment." He added: "If you take a five-year view on the stock, I think it will have a great return."
SpaceX's purchase of $90 million of SolarCity bonds from the $105 million offering in March will be used to retire the bonds SpaceX bought last year, according to Mr. Musk. He said the latest deal offered SpaceX a "decent return" on about 10% of its roughly $1 billion cash position.
The financial transactions have raised questions on Capitol Hill, where some lawmakers are concerned that money from federal contracts with SpaceX could be used to help SolarCity.
SpaceX has received $3.2 billion for its rocket program from government contracts, according to a person familiar with the matter. The lawmakers want to make sure none of that money winds up at SolarCity.
Rep. Doug Lamborn (R., Colo.) this week proposed an amendment that would prohibit Mr. Musk from using SpaceX money to buy SolarCity bonds. The provision is intended to send a message to Mr. Musk that congressional Republicans are watching him.
"It's more for messaging it than debating it and bringing it to an actual vote," Mr. Lamborn said Wednesday. "It's enough to raise the message about it."
Mr. Musk declined to comment. A SpaceX spokesman said the company's "cash balances are not 'government money.' They are SpaceX funds that originate from a broad combination of commercial customer contracts, government contracts and private investor funds."
Last year, another lawmaker offered a similar amendment to the defense-spending bill, though it was quickly withdrawn. A House committee plans to take up this year's defense-spending bill today.
Jim Oberman and Cassandra Sweet contributed to this article.
Credit: By Susan Pulliam, Mike Ramsey and Brody Mullins
Subject: Investments; Loans; Lines of credit; Executives
Location: California
Company / organization: Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Tesla Motors Inc; NAICS: 336999; Name: Valeant Pharmaceuticals International Inc; NAICS: 325412
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 27, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784596312
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784596312?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Elon Musk Supports His Business Empire With Unusual Financial Moves; From personal loans to buying stock, billionaire leader of Tesla, SpaceX and SolarCity has provided help even though it could be risky
Author: Pulliam, Susan; Ramsey, Mike; Mullins, Brody
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Apr 2016: n/a.
ProQuest document link
Abstract:
Since October 2014, SolarCity Corp. has tried to lure individual investors to the solar-power business by pitching $214 million of what it calls "solar bonds" through the company's website. According to Tesla's latest proxy statement, Mr. Musk owns 37 million shares of Tesla, or roughly a 27% stake worth about $9.36 billion as of Wednesday's close.
Full text: Since October 2014, SolarCity Corp. has tried to lure individual investors to the solar-power business by pitching $214 million of what it calls "solar bonds" through the company's website.
The biggest buyer by far, though, was rocket maker Space Exploration Technologies Inc., including $90 million of $105 million sold last month.
The bonds were an "excellent investment," billionaire entrepreneur Elon Musk said in an interview. And he knows more about the companies than anyone. Mr. Musk is their largest shareholder, the chairman of SolarCity and chief executive of SpaceX.
Mr. Musk, 44 years old, has built a business empire like no other in the world, fueled by his voracious appetite for risk and unyielding confidence. The three companies he leads--SolarCity, SpaceX and car maker Tesla Motors Inc.--are worth nearly $50 billion combined.
He has transformed every industry he has touched, speaking without irony about retiring to Mars after SpaceX successfully launches rockets there .
Along the way, Mr. Musk has helped financially support his companies in ways that are as unconventional as he is.
In addition to the bond purchases, he has taken out $475 million in personal credit lines, buying shares of SolarCity and Tesla when they needed capital, securities filings show.
The credit lines are secured with about $2.51 billion of Mr. Musk's shares in SolarCity and Tesla, based on their closing prices Wednesday.
Few top executives use their shares as collateral for personal loans because it can be risky to other shareholders and also raises concerns that the executive's personal interests could conflict with the company's interests.
If the stock price slides, that could trigger a margin call requiring the executive to sell the shares or put up more collateral to repay the loan.
In securities filings, Tesla has disclosed the possibility of margin calls related to Mr. Musk's loans, which it said "may cause the price of our common stock to decline further."
Last year, Valeant Pharmaceuticals International Inc. shares fell 14% in one day after CEO Michael Pearson received a margin call on $100 million in loans backed by some of his shares in the drug company. Mr. Pearson's lender sold 1.3 million of his shares to meet the margin call .
Some corporate-governance experts and analysts say it is even more questionable for Mr. Musk to borrow large amounts of money backed by chunks of stock now that SolarCity and Tesla are big public companies.
"As an analyst, it is often a red flag for me when companies and management direct loans between entities they have personal or financial interests in," said Nathan Weiss, founder and senior analyst at independent research firm Unit Economics LLC in East Greenwich, R.I.
Mr. Musk said it is "valid" to question his large personal borrowings and the financial shuffling between SolarCity, SpaceX and Tesla.
"There were a few cases where one company was doing considerably better than another, and I borrowed money," he said in the interview.
Mr. Musk defends the moves as consistent with his philosophy that "if I ask investors to put money in, then I feel morally I should put money in as well," Mr. Musk said. "I should not ask people to eat from the fruit bowl if I have not myself been willing to eat from the fruit bowl."
Mr. Musk said it is "important that there not be some sort of house of cards that crumbles if one element of the pyramid of Tesla, SolarCity and SpaceX falters."
He said his loans aren't risky to shareholders because they add up to less than 5% of his total net worth, which exceeds $10 billion. That figure doesn't include Mr. Musk's large stake in SpaceX, which is private. He said he could easily put up more SpaceX or Tesla shares as collateral if needed.
"The odds that a margin call cannot be addressed are almost zero," Mr. Musk said in the interview.
He has had a string of triumphs lately. Tesla unveiled its Model 3 sedan to rave reviews and said 325,000 people pledged $1,000 each in the first seven days to reserve cars. Tesla shares are up 75% since Feb. 10. Tesla is the first successful major U.S. auto-company startup since 1925.
On April 8, SpaceX managed to land a rocket in the middle of the Atlantic Ocean on a floating, Global Positioning System-controlled platform for the first time in the company's history.
According to Tesla's latest proxy statement, Mr. Musk owns 37 million shares of Tesla, or roughly a 27% stake worth about $9.36 billion as of Wednesday's close.
Mr. Musk holds a 22% stake in SolarCity, another securities filing shows. Those 21.8 million shares were worth about $726 million as of Wednesday.
SpaceX was valued at $12 billion in a funding round earlier this year. His ownership stake in SpaceX isn't public, and he declined to disclose it.
At Tesla, Mr. Musk is chairman and chief executive but takes no salary. His total compensation last year was valued at $37,584 , reflecting minimum wage requirements in California, but he has never accepted the money.
Mr. Musk got $1.2 million in total compensation from SolarCity, almost all in the form of stock options that vest over three years.
His compensation at SpaceX is about $2.4 million, according to a government website that lists company contracts. A person familiar with the matter said the total includes a salary of $38,000 and the rest in equity.
A study in February by ISS QuickScore, part of proxy adviser Institutional Shareholder Services Inc., found that executives or directors at just 13% of the 3,000 largest publicly traded U.S. companies have pledged shares for loans.
SolarCity and Tesla shares are volatile. SolarCity, which is based in San Mateo, Calif., and installs solar panels at residences across the U.S., has seen its stock price fall about 35% since the start of this year. Tesla fell 40% from the end of December to February, but has since erased those declines.
Mr. Musk said he has "made it clear to shareholders that I subscribe to the notion that the captain is the last person off the ship." In the interview, he said he has no intention of ever selling any Tesla shares and could even add some of his SpaceX stake to the collateral.
Stephen Jurvetson, a founding partner of venture-capital firm Draper Fisher Jurvetson, an early and large investor in SpaceX, Tesla and SolarCity, said the moves by Mr. Musk aren't cause for concern.
Mr. Musk's "passion is breathtaking," said Mr. Jurvetson, a director at SpaceX and Tesla. He praised what he called Mr. Musk's dedication and vision.
Asked if Mr. Musk's personal loans are in the best interest of shareholders and if directors have discussed the matter, Mr. Jurvetson replied: "I don't have a desire to take on that question."
Mr. Jurvetson added: "You want to look at it as a percentage of his holdings." As long as Mr. Musk ties up less than 5% of his holdings, "you don't have much to talk about," though it is "something that should be watched," said Mr. Jurvetson. Mr. Musk said he set the 5% threshold himself.
Mr. Musk helped spawn SolarCity, SpaceX and Tesla using $165 million reaped from the 2002 sale of his stake in online-payments processor PayPal Holdings Inc.
From the start , he was willing to use money from one fledgling company to help another.
In late 2008 , Tesla faced a potential financial collapse because of tightened access to funding, as well as manufacturing delays related to its newly launched Roadster electric car.
Mr. Musk pledged to invest $20 million of his own money into Tesla as part of a $40 million funding round for the company.
Around the same time, SpaceX, of Hawthorne, Calif., was struggling to develop its rocket-launch business and was running low on cash. Then it won a $1.6 billion contract from the National Aeronautics and Space Administration to send 12 unmanned cargo capsules to help resupply the international space station, according to news releases.
In early 2009, Mr. Musk personally borrowed $20 million from SpaceX. In the interview, he said the loan was "to help fund Tesla."
Tesla went public in June 2010. Mr. Musk said he repaid the SpaceX loan with interest by selling 1.4 million shares of Tesla for about $23.8 million. He said that was the only time he has ever sold any shares in the auto maker.
In early 2013 , Tesla was running out of cash as it struggled to produce Model S sedans, and the cars were plagued by faulty drive motors and other issues. SolarCity needed cash to help run its solar-panel leasing business.
Musk increased his credit lines to a total of $300 million from the previous $85 million, securities filings show. His lenders, Goldman Sachs Group Inc. and Morgan Stanley, declined to comment.
Securities filings show that 9.5 million Tesla shares, or 29% of his total holdings, were pledged as collateral on the credit lines. He also put up six million SolarCity shares, or 29% of his overall stake.
From May 2013 to October 2013, Mr. Musk used some of the money he tapped from the credit lines to buy $100 million of Tesla shares and $10 million of SolarCity shares in stock offerings that injected both companies with capital, according to securities filings.
A SolarCity spokesman said Mr. Musk's investment "represented a relatively small percentage of the $398 million raised in the transaction."
Last year, Tesla burned through more than $1.5 billion in cash reserves, according to analysts. Some analysts fretted about delays in deliveries of the auto maker's new Model X sport-utility vehicle.
SolarCity stumbled as its costs rose and it cut an important growth target by half. Investors also worried that SolarCity could lose the benefit of some tax credits, though that didn't happen.
A SolarCity spokesman said the target was cut because the company wanted to focus on profitability.
Tesla disclosed last year that Mr. Musk had boosted his personal credit lines to a total of $475 million. He bought $20 million of Tesla shares and $17.7 million of shares in SolarCity, securities filings show.
In the interview, Mr. Musk said his stock purchases show that he is aligned with investors in both companies. He said he has borrowed less than 65% of the money available from the two credit lines.
SolarCity's solar-bond offerings have gotten three separate boosts from SpaceX. Securities filings show SpaceX bought $90 million of the bonds in March 2015, $75 million last June and another $90 million last month.
Gordon Johnson, an analyst at Axiom Capital Management in New York who follows Tesla, said most retail investors weren't interested enough in the solar bonds to buy them. SolarCity said the bond offerings have attracted investors from all 50 U.S. states.
Last November, an entity affiliated with Mr. Musk bought $10 million of a $113 million convertible SolarCity bond issue. Lyndon Rive, who is SolarCity's chief executive and a cousin of Mr. Musk, bought $3 million of the remaining $103 million, according to the company.
Mr. Rive said the bonds are a "good investment." He added: "If you take a five-year view on the stock, I think it will have a great return."
SpaceX's purchase of $90 million of SolarCity bonds from the $105 million offering in March will be used to retire the bonds SpaceX bought last year, according to Mr. Musk. He said the latest deal offered SpaceX a "decent return" on about 10% of its roughly $1 billion cash position.
The financial transactions have raised questions on Capitol Hill, where some lawmakers are concerned that money from federal contracts with SpaceX could be used to help SolarCity.
SpaceX has received $3.2 billion for its rocket program from government contracts, according to a person familiar with the matter. The lawmakers want to make sure none of that money winds up at SolarCity.
Rep. Doug Lamborn (R., Colo.) this week proposed an amendment that would prohibit Mr. Musk from using SpaceX money to buy SolarCity bonds. The provision is intended to send a message to Mr. Musk that congressional Republicans are watching him.
"It's more for messaging it than debating it and bringing it to an actual vote," Mr. Lamborn said Wednesday. "It's enough to raise the message about it."
Mr. Musk declined to comment. A SpaceX spokesman said the company's "cash balances are not 'government money.' They are SpaceX funds that originate from a broad combination of commercial customer contracts, government contracts and private investor funds."
Last year, another lawmaker offered a similar amendment to the defense-spending bill, though it was quickly withdrawn. A House committee took up this year's defense-spending bill on Wednesday.
Jim Oberman and Cassandra Sweet contributed to this article.
Credit: By Susan Pulliam, Mike Ramsey and Brody Mullins
Subject: Investments; Loans; Lines of credit; Executives
Location: California
Company / organization: Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Tesla Motors Inc; NAICS: 336999; Name: Valeant Pharmaceuticals International Inc; NAICS: 325412
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 28, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784620567
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784620567?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Elon Musk's Empire Gets Unusual Help --- Billionaire uses his own financial clout to support Tesla and SolarCity
Author: Pulliam, Susan; Ramsey, Mike; Mullins, Brody
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 Apr 2016: A.1.
ProQuest document link
Abstract:
Since October 2014, SolarCity Corp. has tried to lure individual investors to the solar-power business by pitching $214 million of what it calls "solar bonds" through the company's website. According to Tesla's latest proxy statement, Mr. Musk owns 37 million shares of Tesla, or roughly a 27% stake worth about $9.36 billion as of Wednesday's close.
Full text: Since October 2014, SolarCity Corp. has tried to lure individual investors to the solar-power business by pitching $214 million of what it calls "solar bonds" through the company's website.
The biggest buyer by far, though, was rocket maker Space Exploration Technologies Inc., including $90 million of $105 million sold last month.
The bonds were an "excellent investment," billionaire entrepreneur Elon Musk said in an interview. And he knows more about the companies than anyone. Mr. Musk is their largest shareholder, the chairman of SolarCity and chief executive of SpaceX.
Mr. Musk, 44 years old, has built a business empire like no other in the world, fueled by his voracious appetite for risk and unyielding confidence. The three companies he leads -- SolarCity, SpaceX and car maker Tesla Motors Inc. -- are worth nearly $50 billion combined.
He has transformed every industry he has touched, speaking without irony about retiring to Mars after SpaceX successfully launches rockets there.
Along the way, Mr. Musk has helped financially support his companies in ways that are as unconventional as he is.
In addition to the bond purchases, he has taken out $475 million in personal credit lines, buying shares of SolarCity and Tesla when they needed capital, securities filings show.
The credit lines are secured with about $2.51 billion of Mr. Musk's shares in SolarCity and Tesla, based on their closing prices Wednesday.
Few top executives use their shares as collateral for personal loans because it can be risky to other shareholders and also raises concerns that the executive's personal interests could conflict with the company's interests.
If the stock price slides, that could trigger a margin call requiring the executive to sell the shares or put up more collateral to repay the loan.
In securities filings, Tesla has disclosed the possibility of margin calls related to Mr. Musk's loans, which "may cause the price of our common stock to decline further."
Last year, Valeant Pharmaceuticals International Inc. shares fell 14% in one day after CEO Michael Pearson received a margin call on $100 million in loans backed by some of his shares in the drug company. Mr. Pearson's lender sold 1.3 million of his shares to meet the margin call.
Some corporate-governance experts and analysts say it is even more questionable for Mr. Musk to borrow large amounts of money backed by chunks of stock now that SolarCity and Tesla are big public companies.
"As an analyst, it is often a red flag for me when companies and management direct loans between entities they have personal or financial interests in," said Nathan Weiss, founder and senior analyst at independent research firm Unit Economics LLC in East Greenwich, R.I.
Mr. Musk said it is "valid" to question his large personal borrowings and the financial shuffling between SolarCity, SpaceX and Tesla.
"There were a few cases where one company was doing considerably better than another, and I borrowed money," he said in the interview.
Mr. Musk defends the moves as consistent with his philosophy that "if I ask investors to put money in, then I feel morally I should put money in as well," Mr. Musk said. "I should not ask people to eat from the fruit bowl if I have not myself been willing to eat from the fruit bowl."
Mr. Musk said it is "important that there not be some sort of house of cards that crumbles if one element of the pyramid of Tesla, SolarCity and SpaceX falters."
He said his loans aren't risky to shareholders because they add up to less than 5% of his total net worth, which exceeds $10 billion. That figure doesn't include Mr. Musk's large stake in SpaceX, which is private. He said he could easily put up more SpaceX or Tesla shares as collateral if needed.
"The odds that a margin call cannot be addressed are almost zero," Mr. Musk said in the interview.
He has had a string of triumphs lately. Tesla unveiled its Model 3 sedan to rave reviews and said 325,000 people pledged $1,000 each in the first seven days to reserve cars. Tesla shares are up 75% since Feb. 10. Tesla is the first successful major U.S. auto-company startup since 1925.
On April 8, SpaceX managed to land a rocket in the middle of the Atlantic Ocean on a floating, Global Positioning System-controlled platform for the first time in the company's history.
According to Tesla's latest proxy statement, Mr. Musk owns 37 million shares of Tesla, or roughly a 27% stake worth about $9.36 billion as of Wednesday's close.
Mr. Musk holds a 22% stake in SolarCity, another securities filing shows. Those 21.8 million shares were worth about $726 million as of Wednesday.
SpaceX was valued at $12 billion in a funding round earlier this year. His ownership stake in SpaceX isn't public, and he declined to disclose it.
At Tesla, Mr. Musk is chairman and chief executive but takes no salary. His total compensation last year was valued at $37,584, reflecting minimum wage requirements in California, but he has never accepted the money.
Mr. Musk got $1.2 million in total compensation from SolarCity, almost all in the form of stock options that vest over three years.
His compensation at SpaceX is about $2.4 million, according to a government website that lists company contracts. A person familiar with the matter said the total includes a salary of $38,000 and the rest in equity.
A study in February by ISS QuickScore, part of proxy adviser Institutional Shareholder Services Inc., found that executives or directors at just 13% of the 3,000 largest publicly traded U.S. companies have pledged shares for loans.
SolarCity and Tesla shares are volatile. SolarCity, which is based in San Mateo, Calif., and installs solar panels at residences across the U.S., has seen its stock price fall about 35% since the start of this year. Tesla fell 40% from the end of December to February, but has erased those declines.
Mr. Musk said he has "made it clear to shareholders that I subscribe to the notion that the captain is the last person off the ship." In the interview, he said he has no intention of ever selling any Tesla shares and could even add some of his SpaceX stake to the collateral.
Stephen Jurvetson, a founding partner of venture-capital firm Draper Fisher Jurvetson, an early and large investor in SpaceX, Tesla and SolarCity, said the moves by Mr. Musk aren't cause for concern.
Mr. Musk's "passion is breathtaking," said Mr. Jurvetson, a director at SpaceX and Tesla. He praised what he called Mr. Musk's dedication and vision.
Asked if Mr. Musk's personal loans are in the best interest of shareholders and if directors have discussed the matter, Mr. Jurvetson replied: "I don't have a desire to take on that question."
Mr. Jurvetson added: "You want to look at it as a percentage of his holdings." As long as Mr. Musk ties up less than 5% of his holdings, "you don't have much to talk about," though it is "something that should be watched," said Mr. Jurvetson. Mr. Musk said he set the 5% threshold himself.
Mr. Musk helped spawn SolarCity, SpaceX and Tesla using $165 million reaped from the 2002 sale of his stake in online-payments processor PayPal Holdings Inc.
From the start, he was willing to use money from one fledgling company to help another.
In late 2008, Tesla faced a potential financial collapse because of tightened access to funding, as well as manufacturing delays related to its newly launched Roadster electric car.
Mr. Musk pledged to invest $20 million of his own money into Tesla as part of a $40 million funding round for the company.
Around the same time, SpaceX, of Hawthorne, Calif., was struggling to develop its rocket-launch business and was running low on cash. Then it won a $1.6 billion contract from the National Aeronautics and Space Administration to send 12 unmanned cargo capsules to help resupply the international space station, according to news releases.
In early 2009, Mr. Musk personally borrowed $20 million from SpaceX. In the interview, he said the loan was "to help fund Tesla."
Tesla went public in June 2010. Mr. Musk said he repaid the SpaceX loan with interest by selling 1.4 million shares of Tesla for about $23.8 million. He said that was the only time he has ever sold any shares in the auto maker.
In early 2013, Tesla was running out of cash as it struggled to produce Model S sedans, and the cars were plagued by faulty drive motors and other issues. SolarCity needed cash to help run its solar-panel leasing business.
Musk increased his credit lines to a total of $300 million from the previous $85 million, securities filings show. His lenders, Goldman Sachs Group Inc. and Morgan Stanley, declined to comment.
Securities filings show that 9.5 million Tesla shares, or 29% of his total holdings, were pledged as collateral on the credit lines. He also put up six million SolarCity shares, or 29% of his overall stake.
From May 2013 to October 2013, Mr. Musk used some of the money he tapped from the credit lines to buy $100 million of Tesla shares and $10 million of SolarCity shares in stock offerings that injected both companies with capital, according to securities filings.
A SolarCity spokesman said Mr. Musk's investment "represented a relatively small percentage of the $398 million raised in the transaction."
Last year, Tesla burned through more than $1.5 billion in cash reserves, according to analysts. Some analysts fretted about delays in deliveries of the auto maker's new Model X sport-utility vehicle.
SolarCity stumbled as its costs rose and it cut an important growth target by half.
A SolarCity spokesman said the target was cut because the company wanted to focus on profitability.
Tesla disclosed last year that Mr. Musk had boosted his personal credit lines to a total of $475 million. He bought $20 million of Tesla shares and $17.7 million of shares in SolarCity, securities filings show.
In the interview, Mr. Musk said his stock purchases show that he is aligned with investors in both companies. He said he has borrowed less than 65% of the money available from the two credit lines.
SolarCity's solar-bond offerings have gotten three separate boosts from SpaceX. Securities filings show SpaceX bought $90 million of the bonds in March 2015, $75 million last June and another $90 million last month.
Gordon Johnson, an analyst at Axiom Capital Management in New York who follows Tesla, said most retail investors weren't interested enough in the solar bonds to buy them. SolarCity said the bond offerings have attracted investors from all 50 U.S. states.
Last November, an entity affiliated with Mr. Musk bought $10 million of a $113 million convertible SolarCity bond issue. Lyndon Rive, who is SolarCity's chief executive and a cousin of Mr. Musk, bought $3 million of the remaining $103 million, according to the company.
Mr. Rive said the bonds are a "good investment." He added: "If you take a five-year view on the stock, I think it will have a great return."
SpaceX's purchase of $90 million of SolarCity bonds from the $105 million offering in March will be used to retire the bonds SpaceX bought last year, according to Mr. Musk. He said the latest deal offered SpaceX a "decent return" on about 10% of its roughly $1 billion cash position.
The financial transactions have raised questions on Capitol Hill, where some lawmakers are concerned that money from federal contracts with SpaceX could be used to help SolarCity.
SpaceX has received $3.2 billion for its rocket program from government contracts, according to a person familiar with the matter. The lawmakers want to make sure none of that money winds up at SolarCity.
Rep. Doug Lamborn (R., Colo.) this week proposed an amendment that would prohibit Mr. Musk from using SpaceX money to buy SolarCity bonds. The provision is intended to send a message to Mr. Musk that congressional Republicans are watching him.
"It's more for messaging it than debating it and bringing it to an actual vote," Mr. Lamborn said Wednesday. "It's enough to raise the message about it."
Mr. Musk declined to comment. A SpaceX spokesman said the company's "cash balances are not 'government money.' They are SpaceX funds that originate from a broad combination of commercial customer contracts, government contracts and private investor funds."
Last year, another lawmaker offered a similar amendment to the defense-spending bill, though it was quickly withdrawn. A House committee took up this year's defense-spending bill on Wednesday.
---
Jim Oberman and Cassandra Sweet contributed to this article.
Credit: By Susan Pulliam, Mike Ramsey and Brody Mullins
Subject: Investments; Bond issues
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: SolarCity Corp; NAICS: 221114, 238220, 333414
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: Apr 28, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784662993
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784662993?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Earnings: What to Watch; Silicon Valley electric-car maker's core business in view after Model 3 rush
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 May 2016: n/a.
ProQuest document link
Abstract:
Tesla's annual sales goal of 80,000 to 90,000 for 2016 is among the closest-watched metrics for Chief Executive Elon Musk, and the company's ability to achieve that rests largely on the status of the Model X. The company recently said it is nearing full production of the new SUV, but it has struggled with parts shortages and customers are reporting numerous repair issues with the vehicle.
Full text: Tesla Motors Inc.'s first quarter results will be released after the bell on May 4.
EARNINGS FORECAST: Tesla is expected to post an operating loss of 58 cents a share, according to analysts polled by Thomson Reuters, compared with a loss of 36 cents a share reported in the first quarter of 2015. Tesla's first quarter deliveries were 1,180 lower than expected because of problems launching the Model X and sales of the Model S didn't keep pace with the fourth quarter of 2015. Tesla's losses have been deepening, and the Silicon Valley electric-car maker has posted only one profitable quarter on the basis of Generally Accepted Accounting Principles since going public in 2010.
REVENUE FORECAST: Revenue is forecast to have risen 45% to $1.6 billion in the first quarter compared with the prior-year quarterly performance. Unit sales rose to 14,820 a 48% increase over the same period a year ago. Deliveries are closely watched given the amount of cash needed to run an auto company and the expectation that more scale will aid Tesla's business.
WHAT TO WATCH:
MODEL X: Tesla's annual sales goal of 80,000 to 90,000 for 2016 is among the closest-watched metrics for Chief Executive Elon Musk, and the company's ability to achieve that rests largely on the status of the Model X. The company recently said it is nearing full production of the new SUV, but it has struggled with parts shortages and customers are reporting numerous repair issues with the vehicle.
CASH: Mr. Musk has said the company will reverse cash outflows in the first quarter of 2016, potentially lessening the need to live on borrowed money. The company ended 2015 with about $1.2 billion in cash, which is less than its annual capital expenditure budget. The larger order bank of reservations for the forthcoming Model 3, representing $400 million in refundable deposits, could give the company a cushion, but investors will be focused on the company's ability to match spending with income.
MODEL 3: Tesla's ability to amass about 400,000 reservations at $1,000 per slot has indicated the company will see plenty of demand, but it also raises questions. How many of those deposits were multiple reservations from a single person, for instance? Mr. Musk will also be pressed for details on how quickly the company can ramp up production to satisfy customers--currently the Model 3 is projected to cost about $35,000, have a battery range in excess of 200 miles and go on sale sometime in 2017.
POWERWALL: The company's stationary battery business made a big splash early in 2015, but focus has largely been on Tesla's core car business, which sucks up most of the capital. The battery business, by most accounts, is moving along and Tesla should be well on its way to delivering packs around the world. It recently stopped taking orders for its 10 kWh stationary storage device, settling on the 7 kWh model instead due to low demand for the more powerful option.
GIGAFACTORY: Tesla's giant battery factory near Reno, Nev., is closely watched and the company's previously-disclosed timetable raises questions. Analysts and investors will look for more insight on whether the plant is ready to produce cells, and whether it on track to make batteries for the Model 3.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile sales; Financial performance; Automobile industry; Capital expenditures
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 2, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 178 5766868
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785766868?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Is Heading Straight for a Speed Trap; On the supposed long-term road to success, Tesla bulls face a harsh short-term reality, likely evident in Wednesday's quarterly results
Author: Russolillo, Steven
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2016: n/a.
ProQuest document link
Abstract:
First-quarter deliveries were 1,180 lower than expected because of problems launching the Model X and disappointing Model S sales.
Full text: Fundamentals are so overrated.
For three years and counting, investor enthusiasm for Tesla Motors Inc. has repeatedly overshadowed, well, everything. Profits? Mostly irrelevant. Dwindling cash levels? No problem. Production issues? They won't happen again, of course.
Tesla's stock has surged more than 500% since 2013 behind a visionary, albeit unconventional , leader in Elon Musk and a cultlike investor following. But on this supposed long-term road to success, Tesla bulls face a harsh short-term reality.
Tesla has reported years of losses and has burned through billions of dollars. The hope is that the new, shiny and more affordable Model 3 , unveiled earlier this year but not expected to ship until late 2017, will reverse those trends.
Until then, quarterly results, including Wednesday's release, won't be pretty.
Analysts polled by FactSet estimate Tesla's first-quarter adjusted loss widened to 60 cents a share from a loss of 36 cents a year earlier. Revenue is expected to have increased by 45% to $1.6 billion. First-quarter deliveries were 1,180 lower than expected because of problems launching the Model X and disappointing Model S sales.
Investors, though, are focused on the Model 3. Mr. Musk said it received 325,000 preorders in the first week alone, which Tesla claimed was "the biggest one-week launch of any product ever." That has since risen to nearly 400,000.
Yet what gets significantly less attention is Tesla's underlying financial condition. It burned through $2.9 billion over the past six quarters, ending last year with $1.2 billion in cash and equivalents. That is less than the $1.5 billion in capital expenditures it expects in 2016. Tesla says it won't need to raise money. Perhaps the $400 million float from Model 3 deposits can help bridge the gap.
Analysts don't expect operating cash flow minus capital expenditures to be positive until 2018 at the soonest. That is despite Tesla touting last quarter a new and more optimistic "core operational cash flow" metric.
Tesla, the company, is disrupting the U.S. auto industry. But Tesla stock, trading at a nosebleed 130 times projected earnings over the next 12 months, looks like an accident waiting to happen.
Credit: By Steven Russolillo
Subject: Stock prices; Investments; Financial performance; Capital expenditures
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 3, 2016
column: Ahead of the Tape
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786262749
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786262749?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla's Losses Widen on Lower-Than-Expected Deliveries; Vice presidents for production and manufacturing leave, as auto maker looks to increase output
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 May 2016: n/a.
ProQuest document link
Abstract:
"Tesla is going to be hell-bent on becoming the best manufacturer on earth. [...]far, I think we've done a good job on design and technology on our products," Chief Executive Elon Musk said in a conference call with investors on Wednesday.
Full text: Tesla Motors Inc. said on Wednesday it would ramp up annual production to a half-million vehicles two years earlier than planned, but the electric-car maker will be doing so without two top manufacturing executives.
The Palo Alto, Calif., company nearly doubled its first-quarter loss compared with the same period a year ago, even as sales of its pricey sedan and sport-utility vehicle continued to climb. Tesla abandoned a plan to generate positive cash flow in 2016 as it pours money into its coming Model 3, a $35,000 and up car that it now says will help it sell 500,000 cars by 2018.
The company aims to start churning out Model 3s in the second half of next year. It has a goal of building a total of between 100,000 and 200,000 by year end.
Tesla has struggled to build its current products on time and free of glitches. Problems with the doors and seat latches on the $81,000 and up Model X SUV over the last six months have dented the company's image.
On Wednesday, Tesla said two high-ranking executives involved with output--Production Vice President Greg Reichow and Manufacturing Vice President Josh Ensign--have already left or will be leaving the company.
Mr. Reichow had been with the car maker since 2011 and had run its powertrain engineering before taking over production. He will stay until a replacement comes on board, Tesla said. Mr. Ensign headed manufacturing and has left the company.
The departures aren't altogether surprising. Founded in 2003, Tesla has lost a number of executives over the past year as rival electric-car startups and technology companies recruit its employees. Among recent departures: Vice President of Worldwide Finance Michael Zanoni, and Jim Chen, its assistant vice president of regulatory affairs.
"Tesla is going to be hell-bent on becoming the best manufacturer on earth. Thus far, I think we've done a good job on design and technology on our products," Chief Executive Elon Musk said in a conference call with investors on Wednesday. "The key thing we need to do in the future is to also be a leader in manufacturing. It's a thing we need to obviously solve if we are going to scale and scale rapidly."
In a letter to shareholders, Mr. Musk reiterated a target of selling between 80,000 and 90,000 vehicles this year. He also said "increasing production five fold over the next two years will be challenging and will likely require some additional capital."
Wall Street analysts have been closely watching the company's cash burn, and some have speculated it would need to sell addition shares to finance its production push.
Related
* Heard: Tesla Earnings Are All About the Dream
* Tesla Is Heading for a Speed Trap (May 3)
* Tesla Reports Lower-Than-Expected First-Quarter Sales (April 4)
* Tesla CIO Leaves to Launch Stealth Startup (April 4)
Tesla's new production goal comes after nearly 400,000 people placed orders for the Model 3, which is projected to go at least 215 miles on a charge. Reservations required $1,000 refundable deposits and produced hundreds of millions of dollars in new funds during the quarter. Those monies helped bolster Tesla's finances and gave it confidence to pull forward its production plans, officials said.
Mr. Musk, on the call with reporters, estimated Tesla's 2020 production would be 1 million vehicles. Tesla, however, missed its delivery forecast in its first quarter because of a parts shortage for the Model X and other production issues.
It shipped 14,820 vehicles, fewer than the 16,000 cars it had pledged to deliver. It also borrowed $430 million from its line of credit in the quarter, allowing it to increase its cash balance to $1.44 billion at the end of March.
The company used some of the $1,000 deposits submitted for Model 3 orders to help repay $350 million on its credit line after the quarter ended.
Tesla had promised to start generating cash in 2016, but to ramp up production of the Model 3 more quickly it abandoned that pledge and said its capital spending now may rise to $2.25 billion, up from the $1.5 billion forecast earlier.
Tesla reported a first quarter loss of $283 million, or $2.13 a share, as the lower-than-expected deliveries hurt revenues. On an adjusted basis, Tesla lost 57 cents a share, slightly less than the 58-cent loss average compiled by Thomson Reuters.
Revenue for the quarter rose 22% from a year earlier to $1.15 billion and its gross margin declined, excluding the $57 million it was paid for selling pollution credits to other car makers.
Shares of Tesla rose 3.1% to $229.50 in afterhours trading on Wednesday, after slipping 4.2% at 4 p.m. on the Nasdaq Stock Market.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Financial performance; Manufacturing; Vehicles
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 4, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786622711
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786622711?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Earnings: It's All About the Dream; Company's earnings came with more ambitious goals, but investors have to stay focused on the fundamentals
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 May 2016: n/a.
ProQuest document link
Abstract:
Tesla's use of Model 3 deposits to pay down its asset-backed line of credit should also raises eyebrows.
Full text: Enthusiasm for the Model 3 mass-market car has powered Tesla Motors to lofty heights. But first-quarter results should remind investors that the future isn't too far away.
Tesla reported revenue of $1.15 billion and an adjusted loss per share of 57 cents Wednesday. That narrowly topped consensus expectations.
But, expectations for the future, rather than current performance, tend to dictate what eventually happens to stock prices. That is especially true for Tesla.
Chief Executive Elon Musk, as usual, made big promises. Tesla now expects to deliver 500,000 vehicles by 2018, two years earlier than the previous goal. And the company affirmed that Model 3 production will begin late next year. This comes after
Model 3 preorders exceeded even the most optimistic projections.
More ambitious goals should be great news, but the new plan deserves thorough scrutiny. Meeting production deadlines has never been Tesla's strong suit. Quality issues have plagued the rollout of the Model X sport-utility vehicle, which came to market years after originally promised. Meanwhile, two senior manufacturing executives are leaving the company.
Mr. Musk also said the new goal "will likely require additional capital." He added that 2016 capital expenditures will likely be 50% higher than the previous guidance of $1.5 billion. This marks an abrupt reversal, since Tesla said it wouldn't need to raise additional capital back in February. Tesla's use of Model 3 deposits to pay down its asset-backed line of credit should also raises eyebrows.
And, as always, at more than 50 times projected 2018 earnings, Tesla shares are priced for perfection.
Hope for a bright future still drives the stock. That hope will be put to the test--and soon.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Financial performance; Capital expenditures
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 4, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786684520
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786684520?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Sells More Cars; Loses Two Executives
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 May 2016: B.1.
ProQuest document link
Abstract:
"Tesla is going to be hellbent on becoming the best manufacturer on earth. [...]far, I think we've done a good job on design and technology on our products," Chief Executive Elon Musk said in a conference call with investors on Wednesday.
Full text: Tesla Motors Inc. said Wednesday it would ramp up annual production to a half-million vehicles two years earlier than planned, but the electric-car maker will be doing so without two top manufacturing executives.
The Palo Alto, Calif., company nearly doubled its first-quarter loss compared with the same period a year earlier, even as sales of its pricey sedan and sport-utility vehicle continued to climb. Tesla abandoned a plan to generate positive cash flow in 2016 as it pours money into its coming Model 3, a $35,000-and-up car that it now says will help it sell 500,000 cars by 2018.
The company aims to start churning out Model 3s in the second half of next year. It has a goal of building a total of between 100,000 and 200,000 by year's end.
Tesla has struggled to build its current products on time and free of glitches. Problems with the doors and seat latches on the $81,000-and-up Model X SUV over the last six months have dented the company's image.
On Wednesday, Tesla said two high-ranking executives involved with output -- Production Vice President Greg Reichow and Manufacturing Vice President Josh Ensign -- have already left or will be leaving the company.
Mr. Reichow had been with the car maker since 2011 and had run its powertrain engineering before taking over production. He will stay until a replacement comes on board, Tesla said. Mr. Ensign headed manufacturing and has left the company.
The departures aren't altogether surprising. Founded in 2003, Tesla has lost a number of executives over the past year as rival electric-car startups and technology companies recruit its employees. Among recent departures: Vice President of Worldwide Finance Michael Zanoni, and Jim Chen, its assistant vice president of regulatory affairs.
"Tesla is going to be hellbent on becoming the best manufacturer on earth. Thus far, I think we've done a good job on design and technology on our products," Chief Executive Elon Musk said in a conference call with investors on Wednesday. "The key thing we need to do in the future is to also be a leader in manufacturing. It's a thing we need to obviously solve if we are going to scale and scale rapidly."
In a letter to shareholders, Mr. Musk reiterated a target of selling between 80,000 and 90,000 vehicles this year. He also said "increasing production fivefold over the next two years will be challenging and will likely require some additional capital."
Wall Street analysts have been closely watching the company's cash burn, and some have speculated it would need to sell addition shares to finance its production push.
Tesla's new production goal comes after nearly 400,000 people placed orders for the Model 3, which is projected to go at least 215 miles on a charge. Reservations required $1,000 refundable deposits and produced hundreds of millions of dollars in new funds during the quarter. Those monies helped bolster Tesla's finances and gave it confidence to pull forward its production plans, officials said.
Mr. Musk estimated Tesla's 2020 production would be a million vehicles. Tesla, however, missed its delivery forecast in its first quarter because of a parts shortage for the Model X and other production issues. It shipped 14,820 vehicles, fewer than the 16,000 cars it had pledged to deliver. It also borrowed $430 million from its line of credit in the quarter, allowing it to increase its cash balance to $1.44 billion at the end of March.
The company used some of the $1,000 deposits submitted for Model 3 orders to help repay $350 million on its credit line after the quarter ended.
Tesla had promised to start generating cash in 2016, but to ramp up production of the Model 3 more quickly it abandoned that pledge and said its capital spending now may rise to $2.25 billion, up from the $1.5 billion forecast earlier.
Tesla reported a first quarter loss of $283 million, or $2.13 a share, as the lower-than-expected deliveries hurt revenue. On an adjusted basis, Tesla lost 57 cents a share, slightly less than the 58-cent loss average compiled by Thomson Reuters.
Revenue for the quarter rose 22% from a year earlier to $1.15 billion and its gross margin declined, excluding the $57 million it was paid for selling pollution credits.
Shares of Tesla rose 3.1% to $229.50 in after-hours trading, after slipping 4.2% earlier Wednesday.
Credit: By Mike Ramsey
Subject: Corporate reorganization; Financial performance; Automobile industry; Electric vehicles
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: May 5, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786775404
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786775404?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Shakes Up Market for Lithium, Other Metals; 'In order to produce half a million cars a year...we would basically need to absorb the entire world's lithium-ion production,' Elon Musk said in March
Author: Yang, Stephanie; Mukherji, Biman
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 May 2016: n/a.
ProQuest document link
Abstract:
Tesla and other electric-vehicle makers are swallowing up lithium, a lightweight material that some call "white petroleum" for its use in lithium-ion batteries that power electric cars. Fuel-cell cars, another new technology that uses platinum as a catalyst to combine hydrogen with oxygen to generate electricity, could boost the metal's demand but these automobiles haven't yet generated the same interest as Tesla's electric cars.
Full text: Tesla Motors Inc., shaking up the auto industry with its battery-operated cars, is now reshaping metals markets, too.
Tesla and other electric-vehicle makers are swallowing up lithium, a lightweight material that some call "white petroleum" for its use in lithium-ion batteries that power electric cars.
Lithium carbonate prices rose 47% in the first quarter compared with the average price in 2015, according to the most recent available data from data provider Benchmark Mineral Intelligence. In 2015, when most other metals and commodities still were in the doldrums, lithium prices rose 28%, Benchmark Mineral Intelligence said.
Orders for the soft metal show no sign of abating. A report from Goldman Sachs Group Inc. says lithium demand could triple by 2025 to 570,000 tons, driven principally by smartphone and electric-car applications.
Telsa isn't the only consumer, but its voracious appetite for lithium is getting significant attention.
The Palo Alto, Calif., company said Wednesday that it expects to sell 500,000 cars world-wide by 2018, and its 2020 production would be one million vehicles, thanks in part to its coming Model 3 car. With a price tag of $35,000, it would be about half the cost of the Tesla Model S sedan. The company says it already has received nearly 400,000 orders for the Model 3.
Those orders will require a lot of lithium.
"In order to produce half a million cars a year...we would basically need to absorb the entire world's lithium-ion production," Tesla Chief Executive Elon Musk said at the unveiling of the Tesla 3 model on March 31.
Tesla also aims to become the world's largest lithium-ion battery producer with its factory in Sparks, Nev. One Tesla Model S battery contains more lithium than 10,000 smartphones, Goldman Sachs estimates.
While the Earth's crust contains plenty of lithium, which is the lightest metal on the periodic table, it is difficult to dig up. Most deposits are in remote locations that pose technological and logistical challenges. There are about a half dozen major lithium-producing resource sites world-wide, spread among Chile, Argentina and Australia.
Unlike gold, copper or many other commodities, lithium doesn't have a spot market and isn't traded on an exchange. Prices are negotiated individually through contracts between buyers and sellers.
Much of the demand is coming from China, where the government is turning to lithium batteries for use in electric buses and other vehicles. NextEV, a Chinese company that has said it plans to unveil its first electric car next year, could further stoke lithium consumption.
It isn't just lithium that is experiencing what some analysts call the Tesla effect. Aluminum demand could gain from a development known as lightweighting, or substituting aluminum for steel to create lighter cars such as the all-aluminum body frame in Tesla's Model S car.
Demand for copper, which is used as a conductor of electricity, also could rise. An electric car uses 60 kilograms of copper per vehicle, four times that of its diesel equivalent, according to producer Mantos Copper.
Related Coverage
* 5 Things to Know About Lithium-the 'White Petroleum'
* How Tesla Is Shaking Up Metals Markets
"The narrative is changing," said Bart Melek, head of commodity strategy at TD Securities in Toronto. "We are headed in the direction where these vehicles are becoming affordable for the mass market. The technology is at a point in time where we could envision this as an ever-increasing factor."
At the same time, demand for platinum and palladium could ebb, analysts say. These metals are largely used in catalytic converters to filter diesel fuel emissions, and have no use in battery-powered electric cars.
Fuel-cell cars, another new technology that uses platinum as a catalyst to combine hydrogen with oxygen to generate electricity, could boost the metal's demand but these automobiles haven't yet generated the same interest as Tesla's electric cars.
Battery-powered cars and hybrids represent less than 2% of vehicles sold in the U.S., researcher Edmunds.com said, and they remain a long way from becoming mainstream. But Bank of America Merrill Lynch metals strategist Michael Widmer said widespread use of battery-powered cars could deal a devastating blow to platinum and palladium. "There is not much the industry can do on that front," he said.
Even with voracious lithium demand from electric-car makers, some warn that the metal could eventually fall victim to oversupply issues that often plague commodities when producers rush to catch up with rising orders.
Some industry executives said demand for lithium could remain strong for three to five years. After that, though, the market could tip into oversupply as new capacity arrives.
Graham Kerr, CEO of South32 Ltd., a Perth, Australia-based resources company, said he is wary of investing in the lithium market on the basis of battery technology that is quickly evolving. "It is one of those niche kind of commodities that can be the flavor of the moment today," he said "But if technology moves a different way, it doesn't have many multiple uses."
Some big global miners have watched closely the spike in lithium prices but haven't decided if the market is deep enough to enter. Lithium demand is about 175,000 tons a year, according to Pure Energy Minerals, a Vancouver-based resources company.
"We will watch it...but even in some of the most optimistic projections, it is a relatively small market," said BHP Billiton Ltd. CEO Andrew Mackenzie. He said it is a market the world's biggest miner is unlikely to tap.
Rhiannon Hoyle and Yifan Xie contributed to this article.
Corrections & Amplifications: Lithium is the lightest metal; an earlier version of this article incorrectly stated it was the lightest element in the periodic table. Also, BHP's CEO said the miner is unlikely to make a move into the lithium market. An earlier version of this article incorrectly said it was likely. (May 5, 2016)
Write to Stephanie Yang at stephanie.yang@wsj.com and Biman Mukherji at biman.mukherji@wsj.com
Credit: By Stephanie Yang and Biman Mukherji
Subject: Lithium; Electric vehicles; Prices; Metals; Aluminum; Copper; Smartphones; Automobile industry
Location: China Australia Argentina
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 5, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786798561
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786798561?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Reshapes Lithium Landscape
Author: Yang, Stephanie; Mukherji, Biman
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 May 2016: C.1.
ProQuest document link
Abstract:
Tesla and other electric-vehicle makers are swallowing up lithium, a lightweight material that some call "white petroleum" for its use in lithium-ion batteries that power electric cars. Fuel-cell cars, another new technology that uses platinum as a catalyst to combine hydrogen with oxygen to generate electricity, could boost the metal's demand but these automobiles haven't yet generated the same interest as Tesla's electric cars.
Full text: Tesla Motors Inc., shaking up the auto industry with its battery-operated cars, is now reshaping metals markets, too.
Tesla and other electric-vehicle makers are swallowing up lithium, a lightweight material that some call "white petroleum" for its use in lithium-ion batteries that power electric cars.
Lithium carbonate prices rose 47% in the first quarter compared with the average price in 2015, according to the most recent available data from data provider Benchmark Mineral Intelligence. In 2015, when most other metals and commodities still were in the doldrums, lithium prices rose 28%, Benchmark Mineral Intelligence said.
Orders for the soft metal show no sign of abating. A report from Goldman Sachs Group Inc. says lithium demand could triple by 2025 to 570,000 tons, driven principally by smartphone and electric-car applications.
Telsa isn't the only consumer, but it's voracious appetite for lithium is getting significant attention.
The Palo Alto, Calif., company said Wednesday that it expects to sell 500,000 cars world-wide by 2018, and its 2020 production would be one million vehicles, thanks in part to its coming Model 3 car. With a price tag of $35,000, it would be about half the cost of the Tesla Model S sedan. The company says it already has received nearly 400,000 orders for the Model 3.
Those orders will require a lot of lithium.
"In order to produce half a million cars a year . . . we would basically need to absorb the entire world's lithium-ion production," Tesla Chief Executive Elon Musk said at the unveiling of the Tesla 3 model on March 31.
Tesla also aims to become the world's largest lithium-ion battery producer with its factory in Sparks, Nev. One Tesla Model S battery contains more lithium than 10,000 smartphones, Goldman Sachs estimates.
While the Earth's crust contains plenty of lithium, which is the lightest metal on the periodic table, it is difficult to dig up. Most deposits are in remote locations that pose technological and logistical challenges. There are about a half dozen major lithium-producing resource sites world-wide, spread among Chile, Argentina and Australia.
Unlike gold, copper or many other commodities, lithium doesn't have a spot market and isn't traded on an exchange. Prices are negotiated individually through contracts between buyers and sellers.
Much of the demand is coming from China, where the government is turning to lithium batteries for use in electric buses and other vehicles. NextEV, a Chinese company that has said it plans to unveil its first electric car next year, could further stoke lithium consumption.
It isn't just lithium that is experiencing what some analysts call the Tesla effect. Aluminum demand could gain from a development known as lightweighting, or substituting aluminum for steel to create lighter cars such as the all-aluminum body frame in Tesla's Model S car.
Demand for copper, which is used as a conductor of electricity, also could rise. An electric car uses 60 kilograms of copper per vehicle, four times that of its diesel equivalent, according to producer Mantos Copper.
"The narrative is changing," said Bart Melek, head of commodity strategy at TD Securities in Toronto. "We are headed in the direction where these vehicles are becoming affordable for the mass market. The technology is at a point in time where we could envision this as an ever-increasing factor."
At the same time, demand for platinum and palladium could ebb, analysts say. These metals are largely used in catalytic converters to filter diesel fuel emissions, and have no use in battery-powered electric cars.
Fuel-cell cars, another new technology that uses platinum as a catalyst to combine hydrogen with oxygen to generate electricity, could boost the metal's demand but these automobiles haven't yet generated the same interest as Tesla's electric cars.
Some industry executives said demand for lithium could remain strong for three to five years. After that, though, the market could tip into oversupply as new capacity arrives.
Graham Kerr, CEO of South32 Ltd., a Perth, Australia-based resources company, said he is wary of investing in the lithium market on the basis of battery technology that is quickly evolving. "It is one of those niche kind of commodities that can be the flavor of the moment today," he said "But if technology moves a different way, it doesn't have many multiple uses."
Some big global miners have watched closely the spike in lithium prices but haven't decided if the market is deep enough to enter. Lithium demand is about 175,000 tons a year, according to Pure Energy Minerals, a Vancouver-based resources company.
"We will watch it . . . but even in some of the most optimistic projections, it is a relatively small market," said BHP Billiton Ltd. CEO Andrew Mackenzie. He said it is a market the world's biggest miner is unlikely to tap.
---
Rhiannon Hoyle and Yifan Xie contributed to this article.
Credit: By Stephanie Yang and Biman Mukherji
Subject: Metals; Lithium; Electric vehicles
Location: United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Classification: 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 20 16
Publication date: May 6, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787027083
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787027083?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla: The Cost of Elon Musk's Model 3 Vision; Elon Musk's electric ambition could turn into a problem for Tesla shareholders
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 May 2016: n/a.
ProQuest document link
Abstract:
[...]since Tesla was the only meaningful player developing a luxury electric car, production problems didn't cost the company market share. General Motors and Lyft will begin testing a fleet of self-driving electric cars on public roads within a year, The Wall Street Journal reported. [...]this competition validates Mr. Musk's vision.
Full text: Dreams of an electric future have historically mattered much more to Tesla Motors shareholders than current business reality. But Tesla's relentless cash burn and emerging competition could yet flip that script.
Tesla CEO Elon Musk, who has said he would like to retire on Mars, is certainly no stranger to big promises. And last week Mr. Musk made arguably his boldest claim yet: The electric-car pioneer will deliver 500,000 new cars in 2018, and 1 million by 2020, bolstered by the coming Model 3 mass-market vehicle. That timeline is much more ambitious than what the company had previously communicated.
Bulls who have believed in the Tesla story cashed in. The company's debt-adjusted market value has surged exponentially since its 2010 initial public offering. Cash from luxury-vehicle sales, the plan went, would fund vehicles priced for a mass-market consumer. This would generate huge profits for the company, revolutionizing the automobile industry on the way.
Tesla's rise didn't occur entirely as planned. The profitability hasn't materialized yet. Cumulative operating cash flow less capital expenditures is negative $4.6 billion since the company went public. And production snags have delayed the launches of key products .
Those problems didn't prevent a meteoric rise in the stock price, for two major reasons: A rabid customer base and exciting early products, coupled with an easy money investing environment, meant Tesla could easily tap the capital markets. Tesla has raised money through equity or convertible debt in every year since 2010, according to FactSet, for a total of nearly $5 billion. And since Tesla was the only meaningful player developing a luxury electric car, production problems didn't cost the company market share.
But the latest promises have ratcheted expectations significantly higher, and they warrant skepticism. To put the 2018 goal in context, Tesla forecasts 80,000 to 90,000 deliveries in 2016. Even that could be ambitious; the company expects to deliver about 30,000 in the year's first half. Two years ago, Mr. Musk said Tesla would deliver cars at an annualized rate above 100,000 units by the end of 2015.
The new timeline has important knock-on effects. Mr. Musk said Tesla would be willing to build its own vehicle parts if its suppliers aren't up to the new challenge. That could add still more complexity to Tesla's Model 3 production. And Tesla announced last week that two senior production executives are planning to leave the company.
Meanwhile, Tesla scrapped its pledge , issued just three months ago, to be cash-flow positive in 2016. Importantly, it also said its new production plans would "likely" require still more capital. Capital expenditures are now likely to be $2.25 billion this year, up from $1.5 billion forecast in February.
In other words, the cash burn will likely grow worse before it gets better. Meanwhile, the stock is priced as if it will perfectly execute on these promises; it trades at 75 times estimated 2017 earnings.
And the pressure to deliver has expanded along with Tesla's promises. The traditional auto giants are no longer sleeping when it comes to electric vehicles.
The latest sign came last week: General Motors and Lyft will begin testing a fleet of self-driving electric cars on public roads within a year, The Wall Street Journal reported. Several other competitors are also set to launch more reasonably priced, mass-market electric vehicles with driving ranges that could attract customers.
In a way, this competition validates Mr. Musk's vision. But it also means the rubber could soon meet the road for Tesla's lofty valuation and stock.
Credit: By Charley Grant
Subject: Electric vehicles; Capital expenditures; Automobile industry
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 10, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787800862
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787800862?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Plans to Sell $2 Billion of Stock; Proceeds to be used for Model 3 production, Elon Musk's tax obligations
Author: Ramsey, Mike; Stynes, Tess
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 May 2016: n/a.
ProQuest document link
Abstract:
According to a securities filing, Mr. Musk used a loan from Morgan Stanley, which is secured against his holdings in Tesla, to finance the purchase of the options.
Full text: Tesla Motors Inc. said it would sell $2 billion in its stock to help finance production of its Model 3 electric vehicle and to cover tax obligations for an options exercise by Chief Executive Elon Musk.
The Palo Alto, Calif., car manufacturer will offer $1.4 billion in common stock to accelerate production of the coming Model 3. It plans to build a half million vehicles by 2018. Proceeds also could be used for working capital and other corporate purposes, the company said. Tesla expects to raise about $1.7 billion after fees, it said on Wednesday.
The remaining shares will be sold by Mr. Musk to cover tax obligations associated with his exercise of more than 5.5 million in stock options, the company said. Mr. Musk will receive no cash through this sale, the company said.
Shares of Tesla gained less than 1% in after-hours trading after rising $6.51 to $211.17 at 4 p.m. on the Nasdaq Stock Market. It disclosed the share sale after 4 p.m.
Mr. Musk will owe significant taxes on his stock-options exercise because of increases in Tesla's share price since 2009, the company said. He paid $36.5 million to exercise the 5,503,972 options, which were set to expire by the end of the year. Those shares were worth $1.16 billion at Wednesday's closing price.
According to a securities filing, Mr. Musk used a loan from Morgan Stanley, which is secured against his holdings in Tesla, to finance the purchase of the options. His total loan amount to Morgan Stanley stood at $299 million after the share purchase.
Mr. Musk plans to donate 1.2 million shares to charity, the company said. That would be worth $253 million based on Wednesday's closing price.
The options exercise, despite the share sales by Mr. Musk to cover the taxes, will result in Mr. Musk increasing his overall holdings of Tesla stock.
Tesla has more than 400,000 reservations for the Model 3. The car is priced beginning at $35,000, below the price tags of Tesla's other vehicles, the Model S car and Model X sport-utility vehicle. The Model 3 is due out late in 2017, will seat five passengers and is capable of traveling 215 miles on a single charge.
Some analysts have expressed skepticism over Tesla's plans to produce half a million cars during 2018, citing manufacturing complexities.
The company ended the first quarter with $1.4 billion in cash after tapping a credit line. It ditched its forecast for producing positive free cash flow in 2016 and said its capital spending would increase by 50% more than it had earlier predicted.
An infusion of $2 billion should give the company a big enough cushion to finance growth over the next year.
Tesla has had only one profitable quarter since becoming a public company and its losses have grown as it has invested in growth.
Write to Mike Ramsey at michael.ramsey@wsj.com and Tess Stynes at tess.stynes@wsj.com
Credit: By Mike Ramsey and Tess Stynes
Subject: Acquisitions & mergers; Vehicles; Capital expenditures
Location: Palo Alto California
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 18, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789597783
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789597783?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Tesla Sets $1.4 Billion Share Sale For Output
Author: Ramsey, Mike; Styles, Tess
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]19 May 2016: B.3.
ProQuest document link
Abstract:
According to a securities filing, Mr. Musk used a loan from Morgan Stanley, which is secured against his holdings in Tesla, to finance the purchase of the options.
Full text: Tesla Motors Inc. said it would sell $2 billion in its stock to help finance production of its Model 3 electric vehicle and to cover tax obligations for an options exercise by Chief Executive Elon Musk.
The Palo Alto, Calif., car manufacturer will offer $1.4 billion in common stock to accelerate production of the coming Model 3. It plans to build a half million vehicles by 2018. Proceeds also could be used for working capital and other corporate purposes, the company said. Tesla expects to raise about $1.7 billion after fees, it said on Wednesday.
The remaining shares will be sold by Mr. Musk to cover tax obligations associated with his exercise of more than 5.5 million in stock options, the company said. Mr. Musk will receive no cash through this sale, the company said.
Shares of Tesla gained less than 1% in after-hours trading after rising $6.51 to $211.17 at 4 p.m. on the Nasdaq Stock Market. It disclosed the share sale after 4 p.m.
Mr. Musk will owe significant taxes on his stock-options exercise because of increases in Tesla's share price since 2009, the company said. He paid $36.5 million to exercise the 5,503,972 options, which were set to expire by the end of the year. Those shares were worth $1.16 billion at Wednesday's closing price.
According to a securities filing, Mr. Musk used a loan from Morgan Stanley, which is secured against his holdings in Tesla, to finance the purchase of the options. His total loan amount to Morgan Stanley stood at $299 million after the share purchase.
Mr. Musk plans to donate 1.2 million shares to charity, the company said. That would be worth $253 million based on Wednesday's closing price.
The options exercise, despite the share sales by Mr. Musk to cover the taxes, will result in Mr. Musk increasing his overall holdings of Tesla stock.
Some analysts have expressed skepticism over Tesla's plans to produce half a million cars during 2018, citing manufacturing complexities.
Credit: By Mike Ramsey and Tess Styles
Subject: Acquisitions & mergers; Securities offerings
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: May 19, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789697528
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789697528?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Owners Will Have to Pay for Supercharger Access; The fast-charging network is an important marketing feature for the company
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 June 2016: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. Model 3 electric car buyers must pay to use its network of Superchargers, returning to a policy the Palo Alto, Calif., company once required on less expensive versions of its Model S. Chief Executive Elon Musk on Tuesday told shareholders the company would charge buyers of its lower-cost vehicle to use the fast-charging system to make the vehicle's economics work.
Full text: Tesla Motors Inc. Model 3 electric car buyers must pay to use its network of Superchargers, returning to a policy the Palo Alto, Calif., company once required on less expensive versions of its Model S.
Chief Executive Elon Musk on Tuesday told shareholders the company would charge buyers of its lower-cost vehicle to use the fast-charging system to make the vehicle's economics work. When Tesla started selling the Model S sedan in 2012, buyers of its 60-kilowatt-hour battery pack and the 40-kwh battery pack had to pay $2,500 to access the Superchargers. Those models were discontinued because of low demand.
It is an important development for Tesla because the fast-charging network, which Tesla valued at $166.6 million in 2015, is an important marketing feature for the company. It allows customers to recharge the large battery on the car in under an hour. A non-Tesla 240-volt charger commonly found in cities and parking areas could take 10 hours to replenish a battery.
A shareholder who said he took possession of a Model S 85D last July and put 150,000 miles on it in less than a year asked how the company would keep up with Supercharger demand given the potential for hundreds of thousands of new cars to use the network. The company has taken $1,000 deposits for nearly 400,000 Model 3 electric cars. Tesla plans on producing the new car, which starts at $35,000, in the second half of 2017.
"The obvious thing to do is to decouple that [cost] from the cost of the Model 3," Mr. Musk said at the annual shareholder meeting. "It will still be very cheap, especially in comparison to gasoline, but it will not be free long distance for life unless you purchase that option."
A year ago at the company's annual meeting, Mr. Musk offered the first hints that a change to the policy around the Superchargers might come. He made reference to people "abusing" the system by using it for daily charging rather than for quick fill ups between cities, causing congestion at the stations. The statement set off intense debates on Tesla's enthusiastic online message boards.
As the number of Teslas has grown beyond 100,000 globally, the fast-charging stations, which now number 634, with 3,780 individual chargers, have become crowded in some areas where the population of cars is high. Tesla has tried to offset this by building "destination" chargers at hotels and parks that provide charging that is faster than regular 240-volt chargers, but slower than the Superchargers.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Shareholder meetings; Electric vehicles; Stockholders
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 1, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792807253
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792807253?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla CEO Elon Musk Expects Apple to Make Car by 2020; Musk says the market for electrical vehicles is big enough for multiple competitors
Author: Bensinger, Greg
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 June 2016: n/a.
ProQuest document link
Abstract:
Mr. Musk, who is founder and chief executive of rocket maker Space Exploration Technologies Corp., reiterated plans to send a rocket to Mars as soon as 2018 and a manned rocket to the red planet by as soon as 2024, with arrival by 2025.
Full text: RANCHO PALOS VERDES, Calif.--Tesla Motors Inc. Chief Executive Elon Musk said he considers Apple Inc. an eventual direct competitor that could bring its own electric vehicles into production as soon as 2020.
Apple will "probably make a good car and be successful," Mr. Musk said at Vox Media Inc.'s Code Conference here on Wednesday. "They should have embarked on [the car] project sooner."
The Wall Street Journal reported last fall that Apple was developing an electric car project and had assigned it a 2019 ship date, which can mean the time when engineers are expected to sign off on the project, not deliver a product. Apple hasn't confirmed it is working on a car .
"It's great [Apple is] doing this, and I hope it works out," Mr. Musk said to laughter in the audience. He said the market is big enough for multiple competitors.
An Apple spokesman declined to comment on Mr. Musk's remarks.
Mr. Musk said he expected to compete with traditional auto makers in electric vehicles, and added Alphabet Inc.'s Google wasn't likely to make cars itself, in favor of licensing its technology to others. Google executives have said that is their strategy.
"I don't think any of the [traditional] car companies have made a great electric vehicle, yet," he said.
Mr. Musk indicated he plans to hold an event later this year to discuss Tesla's plans in autonomous vehicles, but declined to offer specifics.
He repeated that Tesla has received about 400,000 preorders for its Model 3 vehicle, which is expected to sell at prices starting at $35,000. Mr. Musk expects to make half a million cars by 2018 and 1 million cars a year by 2020.
Mr. Musk said he expected fully autonomous vehicles to be technically possible within two years, though regulators would likely take an additional year to approve broad use of such autos.
Mr. Musk, who is founder and chief executive of rocket maker Space Exploration Technologies Corp., reiterated plans to send a rocket to Mars as soon as 2018 and a manned rocket to the red planet by as soon as 2024, with arrival by 2025. He said he would announce more details at a space conference in September.
He is planning to relaunch one of the rockets that he successfully landed after takeoff within the next two months. Mr. Musk is trying to develop a rocket that can be reused because, he said, most of the cost of space travel are the rockets themselves. He said his rockets cost around $35 million each.
The 44-year-old entrepreneur said he hoped to die one day on Mars. "If you're going to choose where to die, then Mars is not a bad choice," he said.
Write to Greg Bensinger at greg.bensinger@wsj.com
Credit: By Greg Bensinger
Subject: Mars; Electric vehicles; Automobile industry; Competition; Autonomous vehicles
Company / organization: Name: Google Inc; NAICS: 519130; Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Alphabet Inc; NAICS: 551114; Name: Vox Media; NAICS: 515112, 551112; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 2, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793070303
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793070303?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
WSJ.D Technology: Tesla CEO Musk Predicts an iCar --- Entrepreneur expects Apple to begin making its first electric vehicle as early as 2020
Author: Bensinger, Greg
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 June 2016: B.4.
ProQuest document link
Abstract:
Mr. Musk, who is founder and chief executive of rocket maker Space Exploration Technologies Corp., reiterated plans to send a rocket to Mars as soon as 2018 and a manned rocket to the red planet by as soon as 2024, with arrival by 2025.
Full text: RANCHO PALOS VERDES, Calif. -- Tesla Motors Inc. Chief Executive Elon Musk said he considers Apple Inc. an eventual direct competitor that could bring its own electric vehicles into production as soon as 2020.
Apple will "probably make a good car and be successful," Mr. Musk said at Vox Media Inc.'s Code Conference here on Wednesday. "They should have embarked on [the car] project sooner."
The Wall Street Journal reported last fall that Apple was developing an electric car project and had assigned it a 2019 ship date, which can mean the time when engineers are expected to sign off on the project, not deliver a product. Apple hasn't confirmed it is working on a car.
"It's great [Apple is] doing this, and I hope it works out," Mr. Musk said to laughter in the audience. He said the market is big enough for multiple competitors.
Apple declined to comment on Mr. Musk's remarks.
Mr. Musk said he expected to compete with traditional auto makers in electric vehicles, and added Alphabet Inc.'s Google wasn't likely to make cars itself, in favor of licensing its technology to others. Google executives have said that is their strategy.
"I don't think any of the [traditional] car companies have made a great electric vehicle, yet," he said.
Mr. Musk indicated he plans to hold an event later this year to discuss Tesla's plans in autonomous vehicles, but declined to offer specifics.
He repeated that Tesla has received about 400,000 preorders for its Model 3 vehicle, which is expected to sell at prices starting at $35,000. Mr. Musk expects to make half a million cars by 2018 and 1 million cars a year by 2020.
Mr. Musk said he expected fully autonomous vehicles to be technically possible within two years, though regulators would likely take an additional year to approve broad use of such autos.
Mr. Musk, who is founder and chief executive of rocket maker Space Exploration Technologies Corp., reiterated plans to send a rocket to Mars as soon as 2018 and a manned rocket to the red planet by as soon as 2024, with arrival by 2025. He said he wouldannounce more details at a space conference in September.
He is planning to relaunch one of the rockets that hesuccessfully landed after takeoff within the next two months. Mr. Muskis trying to develop a rocket that can be reused because, he said, mostof the cost of space travel are the rockets themselves. He said hisrockets cost around $35 million each.
The 44-year-old entrepreneur said he hoped to die one day on Mars.
"If you're going to choose where to die, then Mars is not a bad choice,"he said.
Credit: By Greg Bensinger
Subject: Electric vehicles; Automobile industry
People: Musk, Elon
Company / organization: Name: Google Inc; NAICS: 519130; Name: Alphabet Inc; NAICS: 551114; Name: Tesla Motors Inc; NAICS: 336999; Name: Apple Inc; NAICS: 334111, 334220, 511210
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2016
Publication date: Jun 3, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793509199
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793509199?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
The Tesla Effect: Elon Musk's Tweet Saps Samsung's Battery; Shares of Samsung SDI fall 8% after a tweet from the Tesla founder
Author: Wong, Jacky
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 June 2016: n/a.
ProQuest document link
Abstract:
For investors chasing buzz, the electric-car maker has increasingly been a driving force among shares of automobile-component suppliers in Asia, akin to what Apple news does to electronics-parts makers .
Full text: The Tesla supply chain rumor mill sure can grind investors into a pulp.
Take Samsung SDI, a component making unit of the broader Samsung empire. Its shares sank 8% Wednesday after billionaire Tesla founder Elon Musk took to Twitter to clear rumors that Tesla would procure batteries from the Korean firm.
"Would like to clarify that Tesla is working exclusively with Panasonic for Model 3 cells. News articles claiming otherwise are incorrect," tweeted Mr. Musk, knocking $580 million off Samsung SDI's market capitalization. Where did Samsung's value go? Panasonic added $800 million to its market value the same day.
For investors chasing buzz, the electric-car maker has increasingly been a driving force among shares of automobile-component suppliers in Asia, akin to what Apple news does to electronics-parts makers .
Yet Tesla is punching above its weight. Its cost of goods sold was only 2% of Apple's last year. And Tesla's scale is much smaller than many auto makers. Nobody pays as much attention when a major auto maker shifts business from one windshield-wiper maker to another.
Tesla news moves stocks, even if the information is hard to confirm. Korea's Hankook Tire shot up in May on news it could become a supplier to Tesla. Similar news also sent LG Chem, another battery maker in Korea, soaring one day in October.
And existing suppliers get punished as Tesla expands . Taiwan's Hota Industrial Manufacturing, Tesla's sole supplier of gearboxes, has risen nearly 10-fold since 2013. Its shares got beaten up in April after reports that Tesla was looking for a second supply source.
Tesla's own shares provide a wild enough ride . Now its suppliers are getting towed along.
Write to Jacky Wong at jacky.wong@wsj.com
Credit: By Jacky Wong
Subject: Automobile industry; Suppliers; Corporate profiles
Location: Asia
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 8, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794436179
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794436179?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Offers Lower-Price Model S Sedan; A new version of the Model S will be priced starting at $66,000
Author: Ramsey, Mike; Spector, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 June 2016: n/a.
ProQuest document link
Abstract:
Tesla Chief Executive Elon Musk is racing to complete work on the $35,000 and up Model 3, a vehicle that will better compete with gasoline-powered cars from General Motors Co., Nissan Motors Co. and other mainstream auto makers. Since March, the Model 3 has generated nearly 400,000 reservations from people who put down a $1,000 deposit for a vehicle that is expected to be priced beginning at $35,000.
Full text: Tesla Motors Inc. released a lower-priced version of its Model S electric sedan, a move to tap into the huge enthusiasm for its coming Model 3 and boost flagging sales growth of its existing cars.
On Thursday, it began selling a $66,000 version of its Model S with a battery modified to limit its travel range to about 200 miles on a charge. The price is 9% below the prior lowest-cost model.
Separately, the National Highway Traffic Safety Administration on Thursday said it is looking into reports of a suspension problem involving the Model S. The safety regulator also chastised the Palo Alto, Calif., company for what it said was a "troublesome nondisclosure agreement" that could discourage customers from reporting safety problems with the vehicle.
NHTSA said it has sought information from Tesla and car owners about any suspension problems, but hasn't begun a formal investigation. Faulty suspensions can cause drivers to lose control of vehicles. The agency didn't suggest the vehicles are defective or suffer from widespread safety problems.
A Tesla spokeswoman had no immediate comment.
Tesla is reviewing the suspension issue but hasn't found it to be a widespread problem, said a person close to the company. Its agreement with customers was intended to keep them from discussing issues on Internet message boards, but wasn't meant to prevent talking with regulators, this person said.
Tesla asked an owner to sign the agreement in exchange for covering some repair costs, the company confirmed.
Daily Kanban, an automotive blog, reported earlier on customer reports of Tesla suspension problems and the response from U.S. regulators.
In after-hours trading, Tesla's stock lost $3.13 a share after declining 2.6% to $229.36 in 4 p.m. Nasdaq Stock Market trading on Thursday.
RBC Capital analyst Joseph Spak said the Model S price reduction could be a sign that Tesla wants to expand its market by pulling in sales that might have been delayed by the enormous attention surrounding the Model 3's introduction earlier this year.
Tesla Chief Executive Elon Musk is racing to complete work on the $35,000 and up Model 3, a vehicle that will better compete with gasoline-powered cars from General Motors Co., Nissan Motors Co. and other mainstream auto makers.
Since March, the Model 3 has generated nearly 400,000 reservations from people who put down a $1,000 deposit for a vehicle that is expected to be priced beginning at $35,000. Tesla has said it expects first shipments of the Model 3 in the second half of 2017.
Related Coverage
* U.S. Regulators Begin Looking at Suspensions in Tesla's Model S (June 9)
* Tesla: The Cost of Elon Musk's Model 3 Vision (May 10)
* Quality Woes a Challenge for Tesla's High-Volume Car (April 20)
* Tesla Motors Says Reservations for Model 3 Surpass 276,000 (April 3)
* Huge Backlog Leaves Tesla Little Time to Ramp Up Model 3 Production (April 1)
The Model S 60 unveiled on Thursday comes with a battery that can be software-upgraded to travel about 250 miles on a charge. It also can be purchased in an all-wheel-drive configuration that is priced beginning at $71,000. Both vehicles will have access to the company's fast-charging network for no additional fee, and come standard with its Autopilot driver-assist hardware.
The auto maker less than a year ago discontinued a 60-kwh battery version of the Model S and introduced a more expensive 70-kwh version of the entry model that remained on the market for just a short time. Tesla said on Thursday it is discontinuing the 70-kwh version and offering the new model to appeal to people interested in the brand but unable to afford the longer-range versions.
The pricing move comes after Tesla reported Model S sales declined in the first quarter compared with the fourth quarter of 2015. While sales of the sedan were up on a year-over-year basis, it blamed production constraints and other factors for the sequential sales decline.
For now, the newest versions of the Model S will be built using a 75-kwh battery and their range will be capped by software at about 200 miles. Customers can unlock the additional travel range by paying an additional $9,000, the company said.
Buyers typically spend more than $100,000 apiece on a Tesla vehicle to purchase added battery power, additional seating, all-wheel-drive and other options.
Tesla said a standard 75-kwh Model S also is now available and is priced beginning at $75,700. It will be capable of driving about 250 miles on a battery charge.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey and Mike Spector
Subject: Agreements; Automobile safety; Vehicles; Automobile industry
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 9, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794831626
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794831626?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Regulators Begin Looking at Suspensions in Tesla's Model S; National Highway Traffic Safety Administration also questions car marker's nondisclosure agreements with customers
Author: Ramsey, Mike; Spector, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 June 2016: n/a.
ProQuest document link
Abstract:
U.S. regulators started probing possible suspension problems in Tesla Motors Inc.'s Model S sedan and took the Silicon Valley electric car maker to task for allegedly using nondisclosure agreements that could discourage customers from reporting safety problems.
Full text: U.S. regulators started probing possible suspension problems in Tesla Motors Inc.'s Model S sedan and took the Silicon Valley electric car maker to task for allegedly using nondisclosure agreements that could discourage customers from reporting safety problems.
The National Highway Traffic Safety Administration on Thursday said it had begun looking into the potential suspension problem, an initial step that could later lead the agency to open an official investigation should regulators be persuaded significant problems exist. Faulty suspensions could cause drivers to lose control of vehicles. The agency didn't suggest the vehicles are defective or suffer from widespread safety problems.
In addition, the U.S. car-safety agency expressed concern over apparent nondisclosure agreements under which Tesla allegedly offered to cover some costs for repairing affected vehicles so long as customers kept the problem to themselves.
"NHTSA is examining the potential suspension issue on the Tesla Model S, and is seeking additional information from vehicle owners and the company," the agency said in a statement. "NHTSA learned of Tesla's troublesome nondisclosure agreement last month. The agency immediately informed Tesla that any language implying that consumers should not contact the agency regarding safety concerns is unacceptable, and NHTSA expects Tesla to eliminate any such language."
Related
* Heard on the Street: Just Another Car Company
* Tesla Motors to Restart Sales of Lower-Range Model S Sedan
Tesla representatives told regulators the company didn't intend to dissuade consumers from contacting them, the agency said.
Tesla is looking into the alleged suspension issue and hasn't yet found it to be a widespread problem, said a person close to the company. Tesla's agreement with customers aimed to keep them from discussing issues on internet message boards, but didn't intend to discourage them from talking with car-safety regulators, this person said.
Daily Kanban, an automotive blog, previously reported on the alleged Tesla suspension problems and the response from regulators.
The owner of a Model S reported on company owner forums in April that his left front assembly separated from the upper control arm after driving 70,000 miles. While the car's warranty has expired, such a problem is unusual for a vehicle with that amount of miles. He alleged that Tesla asked him to sign a "goodwill agreement" that forbid him from disclosing the problem more widely in exchange for the company covering some repair costs.
The suspension issue has separately been pushed by an Australian man who has alerted regulators to the alleged problem. He believes he discovered the problem by examining Tesla vehicles in various junk yards and by reading online forums.
Write to Mike Ramsey at michael.ramsey@wsj.com and Mike Spector at mike.spector@wsj.com
Credit: By Mike Ramsey and Mike Spector
Subject: Agreements; Problems; Automobile industry; Vehicles
Location: United States--US
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 9, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795278010
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1795278010?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Cuts Entry Cost To Boost Car Sales
Author: Ramsey, Mike; Spector, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 June 2016: B.1.
ProQuest document link
Abstract:
Tesla Chief Executive Elon Musk is racing to complete work on the $35,000 and up Model 3, a vehicle that will better compete with gasoline-powered cars from General Motors Co., Nissan Motors Co. and other mainstream auto makers. Since March, the Model 3 has generated nearly 400,000 reservations from people who put down a $1,000 deposit for a vehicle that is expected to be priced beginning at $35,000.
Full text: Tesla Motors Inc. released a lower-priced version of its Model S electric sedan, a move to tap into the huge enthusiasm for its coming Model 3 and boost flagging sales growth of its existing cars.
On Thursday, it began selling a $66,000 version of its Model S with a battery modified to limit its travel range to about 200 miles on a charge. The price is 9% below the prior lowest-cost model.
Separately, the National Highway Traffic Safety Administration on Thursday said it is looking into reports of a suspension problem involving the Model S. The safety regulator also chastised the Palo Alto, Calif., company for what it said was a "troublesome nondisclosure agreement" that could discourage customers from reporting safety problems with the vehicle in return for Tesla covering some costs.
NHTSA said it has sought information from Tesla and car owners about any suspension problems, but hasn't begun a formal investigation. Faulty suspensions can cause drivers to lose control of vehicles. The agency didn't suggest the vehicles are defective or suffer from widespread safety problems.
A Tesla spokeswoman had no immediate comment.
Tesla is reviewing the suspension issue but hasn't found it to be a widespread problem, said a person close to the company. Its agreement with customers was intended to keep them from discussing issues on Internet message boards, but wasn't meant to prevent talking with regulators, this person said.
Daily Kanban, an automotive blog, reported earlier on customer reports of Tesla suspension problems and the response from U.S. regulators.
Tesla's stock lost $3.13 a share in after-hours trading after declining 2.6%, or $6.16, to $229.36 at 4 p.m. in Nasdaq trading on Thursday.
RBC Capital analyst Joseph Spak said the Model S price reduction could be a sign that Tesla wants to expand its market by pulling in sales that might have been delayed by the enormous attention surrounding the Model 3's introduction earlier this year.
Tesla Chief Executive Elon Musk is racing to complete work on the $35,000 and up Model 3, a vehicle that will better compete with gasoline-powered cars from General Motors Co., Nissan Motors Co. and other mainstream auto makers.
Since March, the Model 3 has generated nearly 400,000 reservations from people who put down a $1,000 deposit for a vehicle that is expected to be priced beginning at $35,000. Tesla has said it expects first shipments of the Model 3 in the second half of 2017.
The Model S 60 unveiled on Thursday comes with a battery that can be software-upgraded to travel about 250 miles on a charge. It also can be purchased in an all-wheel-drive configuration that is priced beginning at $71,000. Both vehicles will have access to the company's fast-charging network for no additional fee, and come standard with its Autopilot driver-assist hardware.
The auto maker less than a year ago discontinued a 60-kwh battery version of the Model S and introduced a more expensive 70-kwh version of the entry model that remained on the market for just a short time. Tesla said on Thursday it is discontinuing the 70-kwh version and offering the new model to appeal to people interested in the brand but unable to afford the longer-range versions.
The pricing move comes after Tesla reported Model S sales declined in the first quarter compared with the fourth quarter of 2015. While sales of the sedan were up on a year-over-year basis, it blamed production constraints and other factors for the sequential sales decline.
For now, the newest versions of the Model S will be built using a 75-kwh battery and their range will be capped by software at about 200 miles. Customers can unlock the additional travel range by paying an additional $9,000, the company said.
Buyers typically spend more than $100,000 apiece on a Tesla vehicle to purchase added battery power, additional seating, all-wheel-drive and other options.
Tesla said a standard 75-kwh Model S also is now available and is priced beginning at $75,700. It will be capable of driving about 250 miles on a battery charge.
Credit: By Mike Ramsey and Mike Spector
Subject: Price cuts; Automobile safety; Automobile sales
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Jun 10, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795448350
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1795448350?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Revises Customer Nondisclosure Pacts, Denies Suspension Flaw in Model S Car; NHTSA says previous agreements to fix out-of-warranty problems could be used to dissuade consumers from reporting safety issues
Author: Ramsey, Mike; Spector, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 June 2016: n/a.
ProQuest document link
Abstract:
The Palo Alto, Calif., electric-car maker changed the agreements to make it clear the contracts don't prohibit customers from reporting suspected safety problems to the U.S. National Highway Traffic Safety Administration, Mr. Musk said in an interview on Friday.
Full text: Tesla Motors Inc. has revised nondisclosure agreements to address concerns that customers were discouraged from reporting possible safety problems with the Silicon Valley company's vehicles, Chief Executive Elon Musk confirmed.
The Palo Alto, Calif., electric-car maker changed the agreements to make it clear the contracts don't prohibit customers from reporting suspected safety problems to the U.S. National Highway Traffic Safety Administration, Mr. Musk said in an interview on Friday.
The NHTSA on Friday said Tesla had "clarified the language [in the contracts] in a satisfactory way, resolving the issue."
Tesla's move comes after suggestions from an automotive blog and regulators that agreements the company had asked customers to sign in exchange for covering some repair costs could prevent them from disclosing possible safety issues to U.S. regulators.
Related Reading
* Tesla: Just Another Car Company (June 10)
* Tesla Offers Lower-Price Model S Sedan (June 9)
* Tesla CEO Elon Musk Expects Apple to Make Car by 2020 (June 2)
* Tesla Owners Will Have to Pay for Supercharger Access (June 1)
Regulators on Thursday called the nondisclosure agreement "troublesome." Tesla early on Friday had said suggestions that it had used contracts that attempted to prevent customers from alerting government officials to safety problems were "preposterous."
At issue was what Tesla called a "goodwill agreement" that a Model S sedan owner in Pennsylvania signed after claiming in an online forum that his car had suffered a broken suspension. Faulty suspensions can cause motorists to lose control of their vehicle.
The automotive blog Daily Kanban subsequently reported on the alleged safety problem and suggested the agreement could prevent it from being reported to regulators. The blog also pointed to a possible defect in Tesla's Model X sport-utility vehicle.
The revision of the customer agreements was earlier reported by Automotive News.
Mr. Musk on Friday said the Model S is safe and doesn't have any suspension problems. "If there is something more we could think of to do to make [the Model S] safer, we would do it. I don't want to be responsible for anything that I could have done [and didn't] that could have saved someone's life."
The Model S has been recalled before for a seat-belt problem, with the company unaware of any injuries. The Model X was recalled earlier this year because a rear seat latch that could come undone. Tesla's first model, the Roadster, was recalled several years ago for a possible fire risk.
The NHTSA on Friday said it was undertaking what it called "routine data collection" in reviewing the possible suspension problem on the Model S. "To date, NHTSA has not identified any safety issue with Tesla's suspensions," the agency said, adding the auto maker has fully cooperated with information requests. Regulators haven't opened a formal investigation.
Regulators typically screen myriad complaints and claims from consumers and safety advocates about potential problems across a variety of vehicle models and don't always find dangers exist.
Tesla, in its early Friday blog, had posted a lengthy rebuttal of claims about safety defects or improper agreements with customers. Tesla added that it was cooperating with the NHTSA and that the agency had said it doesn't need further information from the company.
The Tesla owner at the center of the firestorm, Pete Cordaro, in an interview supported the auto maker's view that the agreement he signed didn't prevent him from talking with regulators. "I never thought this prevented me from talking to anyone," he said, noting that he had posted the agreement on the online forum before signing it. But he added that he felt customers could potentially interpret the agreement as requiring them to keep safety concerns to themselves.
Tesla said in its blog post that "first, there is no safety defect with the suspensions in either the Model S or Model X," adding that the company becomes aware of and fully investigates possible problems with vehicles since it owns all its service centers.
Tesla said it has "never and would never ask a customer to sign a document to prevent them from talking to NHTSA or any other government agency. That is preposterous."
The goodwill agreement that Tesla asks customers to sign aims to protect the car maker from being sued after conducting repairs that aren't covered under a vehicle's warranty, the company said.
The online message-board post from Mr. Cordaro, the Pennsylvania Model S owner, ignited a series of events that led to Tesla's long blog post defending its vehicles and practices.
Daily Kanban in its article about the alleged Tesla suspension issue focused on Mr. Cordaro driving his 2013 Model S in late April down a dirt road at 5 miles an hour when his left front assembly separated from the upper control arm, essentially causing a wheel to detach from the vehicle. The car had been driven about 73,000 miles since he purchased it in May 2013, Mr. Cordaro said.
The car's warranty had expired, but Mr. Cordaro asked Tesla to fix the problem because he felt a suspension issue was unusual for a relatively new vehicle. And he had taken the car to a Tesla service center to check out the suspension a few weeks earlier, he said.
Tesla in its blog post said: "The car had over 70,000 miles on it and its owner lives down such a long dirt road that it required two tow trucks to retrieve the car."
Mr. Cordaro disputed that aspect of Tesla's statement. "I live on an asphalt road. My Model S has been on a dirt road only once or twice in its existence."
Mr. Musk said Tesla erred in its claim about the dirt road.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey and Mike Spector
Subject: Agreements; Traffic accidents & safety; Automobile safety; Vehicles; Cooperation
Location: United States--US Palo Alto California
People: Musk, Elon
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Automotive News; NAICS: 511120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 10, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795453519
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1795453519?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla: Just Another Car Company; Quality concerns aren't priced in to Tesla shares
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 June 2016: n/a.
ProQuest document link
Abstract:
Unscripted events, such as product recalls, are common in the automobile industry.
Full text: News that regulators have begun probing possible safety problems on Tesla Motors vehicles highlights an important reality for shareholders: Tesla isn't immune from the pitfalls of the automobile business.
The National Highway Traffic Safety Administration said Thursday it has begun looking into possible suspension problems on Tesla's Model S sedan. Tesla shares fell on Thursday and Friday in the wake of the news.
The NHTSA review isn't yet a formal investigation. And for its part, Tesla denied in a statement that there are widespread suspension issues on the vehicle.
Unscripted events, such as product recalls, are common in the automobile industry. Mass-producing cars is difficult and it is also a capital-intensive, low-return business. That underscores, in part, why auto makers command low valuation multiples. General Motors and Ford Motor trade at five and six times projected 2018 earnings. In sharp contrast, Tesla trades at 33 times 2018 earnings.
It is possible that any suspension issues on Tesla vehicles will be quickly forgotten. But other quality concerns have popped up. Manufacturing problems have plagued the rollout of Tesla's Model X SUV. And Consumer Reports pulled its recommendation for the Model S due to concerns over the car's reliability last fall.
These come as Tesla aims to dramatically expand deliveries from a goal of 80,000-90,000 vehicles this year to half a million in 2018. Expanding production is necessary to generate the economies of scale needed to turn a profit. But meeting even this year's target is hardly a given: Tesla said last month it expects to deliver just over 30,000 in the first two quarters.
It is fair to worry whether Tesla can maintain its reputation for high quality as it strains to pick up the production pace.
Nosebleed valuations mean investors have plenty to lose if Tesla can't successfully juggle speed and quality.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Product recalls; Vehicles; Quality
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Consumer Reports; NAICS: 511120; Name: Tesla Motors Inc; NAICS: 336999; Name: General Motors Corp; NAICS: 336111, 333415, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 10, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795550913
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1795550913?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Revises Customer Nondisclosure Agreements; New terms make clear reporting safety issues to regulators isn't prohibited
Author: Ramsey, Mike; Spector, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 June 2016: n/a.
ProQuest document link
Abstract:
The Palo Alto, Calif., electric car maker revised the agreements to make clear the contracts don't prohibit customers from reporting suspected safety problems to the U.S. National Highway Traffic Safety Administration, this person said.
Full text: Tesla Motors Inc. is revising nondisclosure agreements to address concerns customers were discouraged from reporting possible safety problems with the Silicon Valley company's vehicles, said a person familiar with the matter.
The Palo Alto, Calif., electric car maker revised the agreements to make clear the contracts don't prohibit customers from reporting suspected safety problems to the U.S. National Highway Traffic Safety Administration, this person said.
The move comes after suggestions from an automotive blog and regulators that agreements Tesla asked customers to sign in exchange for covering some repair costs could prevent them from disclosing possible safety issues to U.S. regulators.
Regulators Thursday called the nondisclosure agreement "troublesome." Tesla earlier called "preposterous" suggestions it used contracts that attempted to prevent customers from alerting government officials to safety problems. The revision of the agreements was earlier reported by Automotive News.
At issue was a "goodwill agreement" that a Model S sedan owner in Pennsylvania signed after claiming in an online forum that he had a broken suspension. Faulty suspensions can cause motorists to lose control.
The automotive blog Daily Kanban subsequently reported on the alleged safety problem and suggested the agreement could prevent it from being reported to regulators. The blog also pointed to a possible defect in Tesla's Model X sport-utility vehicle.
The NHTSA on Thursday said it was examining the suspension problem . The inquiry was in the earliest stages and no formal investigation had been opened. Regulators typically screen myriad complaints and claims from consumers and safety advocates about potential problems across a variety of vehicle models without finding significant dangers exist.
Tesla in its own blog posted a lengthy response rebutting claims of safety defects or improper agreements with customers. Tesla added that it was cooperating with the NHTSA and that the agency has said it doesn't need any further information from the company.
The Tesla owner at the center of the firestorm, Pete Cordaro, in an interview supported the auto maker's view that the agreement he signed didn't prevent him from talking with regulators. "I never thought this prevented me from talking to anyone," he said, noting that he posted the agreement on the online forum before signing it. But he added he felt customers could potentially interpret the agreement as requiring them to keep safety concerns to themselves.
"First, there is no safety defect with the suspensions in either the Model S or Model X," Tesla said in its own blog post earlier, adding that it becomes aware of and fully investigates possible problems with vehicles since the company owns all its service centers.
Tesla added it has "never and would never ask a customer to sign a document to prevent them from talking to NHTSA or any other government agency. That is preposterous."
A "goodwill agreement" that Tesla asks customers to sign aims to protect the car maker from being sued after conducting repairs that aren't covered under a vehicle's warranty, the company said.
The online message-board post from Mr. Cordaro, the Pennsylvania Model S owner, ignited a series of events that led to Tesla's long blog post defending its vehicles and practices.
Daily Kanban focused on Mr. Cordaro driving his 2013 Model S in late April down a dirt road at 5 miles an hour when his left front assembly separated from the upper control arm, essentially causing a wheel to detach from the vehicle. The car had been driven about 73,000 miles since he purchased it in May 2013, Mr. Cordaro said.
The car's warranty was expired, but Mr. Cordaro asked Tesla to fix the problem because he felt a suspension issue was unusual for a relatively new vehicle and he had taken it to a Tesla service center a few weeks earlier, he said.
Tesla in its blog post said: "The car had over 70,000 miles on it and its owner lives down such a long dirt road that it required two tow trucks to retrieve the car."
Mr. Cordaro disputed that aspect of Tesla's statement. "I live on an asphalt road. My Model S has been on a dirt road only once or twice in its existence."
A Tesla representative had no immediate comment on Mr. Cordaro's assertion.
Write to Mike Ramsey at michael.ramsey@wsj.com and Mike Spector at mike.spector@wsj.com
Credit: By Mike Ramsey and Mike Spector
Subject: Agreements; Traffic accidents & safety; Automobile safety; Vehicles
Location: United States--US Palo Alto California
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Automotive News; NAICS: 511120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 10, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795565966
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1795565966?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Tesla Defends Vehicle Suspension Systems
Author: Ramsey, Mike; Spector, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 June 2016: B.3.
ProQuest document link
Abstract:
Tesla Motors Inc. revised nondisclosure agreements to address concerns that customers were discouraged from reporting possible safety problems with the Silicon Valley company's vehicles, Chief Executive Elon Musk confirmed.
Full text: Tesla Motors Inc. revised nondisclosure agreements to address concerns that customers were discouraged from reporting possible safety problems with the Silicon Valley company's vehicles, Chief Executive Elon Musk confirmed.
The Palo Alto, Calif., electric-car maker changed the agreements to make it clear the contracts don't prohibit customers from reporting suspected safety problems to the U.S. National Highway Traffic Safety Administration, Mr. Musk said on Friday.
NHTSA on Friday said Tesla has "clarified the language [in the contracts] in a satisfactory way, resolving the issue."
The move comes after suggestions from an automotive blog and regulators that agreements Tesla asked customers to sign in exchange for covering some repair costs could prevent them from disclosing possible safety issues to U.S. regulators.
Regulators had earlier called the nondisclosure agreement "troublesome." Tesla earlier said suggestions it used contracts that attempted to prevent customers from alerting government officials to safety problems were "preposterous." The revision of the agreements was earlier reported by Automotive News.
At issue was a "goodwill agreement" that a Model S sedan owner in Pennsylvania signed after claiming in an online forum that he had a broken suspension. Faulty suspensions can cause motorists to lose control.
The automotive blog Daily Kanban subsequently reported on the customer's problem and suggested the agreement could prevent it from being reported to regulators. The blog also pointed to a possible defect in Tesla's Model X sport-utility vehicle.
Mr. Musk on Friday said the Model S is safe and doesn't have any suspension problems. "If there is something more we could think of to do to make [the Model S] safer, we would do it. I don't want to be responsible for anything that I could have done that could have saved someone's life."
The Model S has been recalled before for a seat-belt problem, with the company unaware of any injuries. The Model X was recalled earlier this year due to a rear seat latch that could come undone.
NHTSA on Friday said it was undertaking "routine data collection" in reviewing the possible suspension problem on the Model S. "To date, NHTSA has not identified any safety issue with Tesla's suspensions," the agency said, adding the auto maker has fully cooperated with information requests.
Regulators often review complaints and claims from consumers and others about potential problems across car models and don't always find dangers exist.
Credit: By Mike Ramsey and Mike Spector
Subject: Automobile industry; Automobile safety; Electric vehicles
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Jun 11, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795833942
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1795833942?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Plans for Electric Planes Gain Momentum; NASA, aviation industry explore hydrogen-fuel cells and electric-power plants; goal is to create a Tesla of the skies
Author: Wall, Robert
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 June 2016: n/a.
ProQuest document link
Abstract:
The Pentagon's technology arm, the Defense Advanced Research Projects Agency, is working with partners including British engine-maker Rolls-Royce Holdings PLC and Honeywell International Inc. on a drone using hybrid-electric propulsion. European budget airline easyJet PLC plans to test equipment on its Airbus single-aisle planes to make them less reliant on traditional fuel-consuming engines, said Ian Davies, the carrier's head of engineering.
Full text: The National Aeronautics and Space Administration is poised to designate an all-electric plane concept as its newest, futuristic aircraft in the biggest boost yet for the idea of building airliners that don't burn fuel.
The announcement, expected Friday, would place the electric plane in the footsteps of other aviation firsts that the U.S. has pursued through its futuristic "X-Planes" series, which dates to Chuck Yeager's Bell X-1 and was first to break the sound barrier in 1947. The electric aircraft is expected to be called the X-57 and could fly as early as next year, said a person familiar with the plan.
NASA Administrator Charles Bolden is expected to unveil the designation of the next X-plane, the person said. NASA had no comment ahead of the official announcement.
Some of the world's industrial giants, NASA and a handful of pioneering airlines are plunging headlong into developing commercially viable electric-power airplanes, aiming to come up with a Tesla of the skies.
The push is moving the idea significantly beyond the small circle of enthusiasts who have chased it for decades. Concepts include relatively straightforward efforts to use hydrogen cells for taxiing and onboard power and more ambitious plans to replace a commercial aircraft's fuel-burning engines with electric power plants.
"We are in the Wild, Wild West again of aeronautics," said Mark Moore, a principal researcher at NASA.
European jet maker Airbus Group SE and German industrial company Siemens AG in April said they plan to put 200 engineers together to work on electric or hybrid-electric technologies that can be used in aerospace. Hybrid electric designs operate similar to a Toyota Prius--a conventional battery-operated electric motor is used to augment a fuel-burning combustion engine.
"We are now really putting significant money" into the effort, Airbus Chief Executive Tom Enders said in a May interview. He projects that 100-seat, hybrid-electric passenger aircraft could be flying by 2030.
Airbus last year flew a two-seat electric plane called the E-Fan across the English Channel to help generate interest. The plane used lithium batteries to power the 36-minute flight, though there is still a long way to go to advance battery technology enough to take a similar approach for larger planes.
Meanwhile, Boeing Co. is working on a concept that would use regular jet engines on takeoff and switch to electric power during the flight. The Pentagon's technology arm, the Defense Advanced Research Projects Agency, is working with partners including British engine-maker Rolls-Royce Holdings PLC and Honeywell International Inc. on a drone using hybrid-electric propulsion.
Airlines are looking at the possibility, too. European budget airline easyJet PLC plans to test equipment on its Airbus single-aisle planes to make them less reliant on traditional fuel-consuming engines, said Ian Davies, the carrier's head of engineering.
Hydrogen fuel cells could allow airliners to taxi without their main engines running, reducing fuel consumption and noise, Mr. Davies said. Another promising idea: Harvest the kinetic energy from spinning wheels on takeoffs and landings in a generator that could charge the plane's batteries. That concept is already used in Formula One race cars, allowing them to store energy from braking that can be used to deliver a boost for overtaking competitors.
Modern jet planes are 70% more fuel-efficient than the kerosene guzzlers of 40 years ago. The pace of efficiency improvement is moderating, though, just as pressure for greater savings is growing. Airlines this year are expected to burn 80 billion gallons of fuel. Even at today's low oil price that amounts to an annual fuel bill of about $127 billion for the airline industry.
Political pressure to reduce fuel consumption also is mounting. The International Civil Aviation Organization, the United Nations' aviation regulator, this year approved the first fuel-efficiency standard for new planes. ICAO members later this year could endorse a global carbon-dioxide cap-and-trade system for aviation, adding an incentive for airlines to reduce fuel consumption.
Industry executives acknowledge the technological challenges. Boeing, in an email statement, said "it would be premature to speculate when or if we will see a hybrid commercial airplane as there are still many technology hurdles to overcome."
Regulatory hurdles are also high.
"You can't expect the [Federal Aviation Administration] to be permitting this technology until it has lots of hours in operation," NASA's Mr. Moore said.
NASA plans to demonstrate some of its electric-plane ideas with the coming X-Plane: a highly modified version of the four-seat, Tecnam P2006T plane, called the Sceptor. Costruzioni Aeronautiche Tecnam s.r.l., based just north of Naples, has been in business since 1948 and specializes in building two-seat to four-seat planes.
NASA engineers want to ditch the plane's twin engines and wings, replacing them with a series of small electric propellers spread across much sleeker wings.
NASA's Mr. Moore said the configuration promises a 30% reduction in total operating costs. The batteries driving the propellers could be charged on the ground using solar cells, Mr. Moore said.
The plane concept has already won converts. Cape Air, a Barnstable, Mass.-based independent regional airline, is working with NASA and the Italian manufacturer to incorporate practical considerations in the design.
Cape Air operates a fleet of mainly nine-seat Cessna planes flying short routes, such as from Boston to Nantucket, Mass. The short flight times make the use of electric planes a real prospect, said Jim Goddard, senior vice president for fleet planning at the airline. "We think it would be a great fit," he said.
Andy Pasztor and Jon Ostrower contributed to this article.
Write to Robert Wall at robert.wall@wsj.com
Credit: By Robert Wall
Subject: Airlines; Aviation; Aircraft industry; Engines; Electric power; Energy efficiency; Aeronautics
Company / organization: Name: National Aeronautics & Space Administration--NASA; NAICS: 927110; Name: easyJet Airline Co Ltd; NAICS: 481111; Name: Boeing Co; NAICS: 336411, 336413, 336414; Name: Honeywell International Inc; NAICS: 334511, 334512, 334513, 335999, 332911, 334290; Name: Defense Advanced Research Projects Agency; NAICS: 928110; Name: Siemens AG; NAICS: 334517, 334210, 334220
Product name: Toyota Prius
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 16, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1797419368
Document URL: https://login.ezproxy.uta.edu/login?url=https://s earch.proquest.com/docview/1797419368?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Hey, Jay Leno, What About Tesla's Dependence on the Taxpayer? Elon Musk says government handouts speed things up, but he's chasing a toxic carrot.
Author: Jenkins, Holman W, Jr
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 June 2016: n/a.
ProQuest document link
Abstract:
[...]a Tuesday on which Donald Trump is progressing toward the Republican nomination, then a landslide defeat by Obama heir Hillary Clinton, has been a good day to buy Tesla stock. First of all, where is the evidence that Tesla and its founder Elon Musk have been short of adulation?
Full text: As a rule, a Tuesday on which Donald Trump is progressing toward the Republican nomination, then a landslide defeat by Obama heir Hillary Clinton, has been a good day to buy Tesla stock.
Tesla surged right after Mr. Trump won the New Hampshire primary, was up strongly after his Michigan win, then down sharply on his April 5 Wisconsin loss. Mr. Trump restored his luster with his big New York win on April 19 but by then matters had grown complicated for Tesla with the first poll showing that he might actually beat Mrs. Clinton.
OK, lots of factors affect a stock price so these results are merely suggestive, but Tesla is a business heavily dependent on government handouts in the U.S. and abroad. Oddly, such subsidies are seldom emphasized in Wall Street's bullish reports on Tesla, but they do strongly figure (because the Securities and Exchange Commission is good for something) in Tesla's own public filings.
Then there was Jay Leno's somewhat unnecessary defense of Tesla this week on CNBC, by way of promoting his excellent "Jay Leno's Garage" TV show.
Mr. Leno likes entrepreneurship and innovation. Who doesn't? But he went on to say. "I don't understand why people attack this car. It is made in America, by Americans. It is built local. . . . I don't understand why we don't celebrate entrepreneurship more and success in this country."
First of all, where is the evidence that Tesla and its founder Elon Musk have been short of adulation? As for revolutionizing transportation, Google, Uber and even the traditional U.S. car companies (with their safety innovations) are doing as much or more, and without conspicuous government support and even in the face of political opposition.
Tesla's main contribution, let's remember, has been to substitute electric drive for gasoline drive--which is great. Electric cars are interesting. But why does this justify government favoritism, to the point where Tesla's market cap is a modest fraction of the value of its future expected subsidies? The handouts currently amount to at least $20,000 per car.
If the answer is climate change, the largest source of greenhouse emissions is electric-power generation, twice as much as all forms of transportation combined. So why subsidize a car to run on electricity? Passenger cars are such a small part of the alleged problem--a single-digit share of emissions--why focus on cars at all?
But you know the answer. Tesla has captured the public's imagination, and politicians latch onto any opportunity to transfer public resources to a grateful recipient, because that's what politicians do. The real question isn't whether Mr. Musk is enterprising and innovative, but whether government's excessive interest has so distorted his decision-making that it's leading his company to disaster.
Sometimes it's right just to sit back and marvel. Tesla was running out of money when the Detroit auto bust and the Toyota sudden-acceleration panic occurred, conspiring to deliver Tesla its California factory and a nakedly political cash infusion from Toyota just in time to boost Tesla's pending IPO. The company benefited from $465 million in federal loan guarantees. Its cars enjoy tax credits showered on customers around the world, including, for one year, a $42,000 state tax credit for Colorado buyers.
Mr. Musk's current ambition to proceed swiftly to a mass-market electric car, the Model 3, wouldn't be happening without $1.3 billion in state incentives for his Nevada battery plant. His rush may also be aimed at stirring Washington to preserve soon-to-expire Tesla tax benefits. With $400 million in refundable deposits in hand for the Model 3--a car unlikely to be ready by the high-pressure target date of mid 2017--Tesla suddenly is a bank run waiting to happen. Yet, in another serendipity, a Goldman Sachs analyst last month issued a glowing report on the stock just as his colleagues on the other side of the Chinese wall were raising a fresh $2 billion to keep the Tesla magic act going a bit longer.
All this perhaps should have a familiar ring. Like Solyndra, the solar-panel innovator lured to destruction by $535 million in federal loan guarantees, Tesla is following a carrot that may prove toxic. Legendary short-seller Jim Chanos recently acknowledged taking a bearish position in the company's stock. He cites Tesla's exceedingly improbable timetable for the Model 3. If Mr. Chanos is right, Mr. Musk may one day rue letting government shape so much of his business plan. Or as he delicately phrased it himself last year in response to a Los Angeles Times accounting, taxpayer handouts "improve the rate at which a certain thing happens."
That's one way of putting it. In their absence, Mr. Musk would have to restrict himself to building a company that can survive on the support it receives from its customers, including Jay Leno. Here's betting the electric-car cause would be better served in the long run.
Credit: By Holman W. Jenkins, Jr.
Subject: Guaranteed loans; Automobile industry; Subsidies; Politics; Electric vehicles; Entrepreneurship
Location: Wisconsin California United States--US Michigan New York New Hampshire
People: Leno, Jay Clinton, Hillary
Company / organization: Name: Google Inc; NAICS: 519130; Name: Securities & Exchange Commission; NAICS: 926150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 17, 2016
column: Business World
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1797606915
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1797606915?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Offers to Acquire SolarCity; Elon Musk is chairman, largest shareholder of both companies
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 June 2016: n/a.
ProQuest document link
Abstract:
Related * Tesla Offers Lower-Price Model S Sedan (June 9, 2016) * Tesla Revises Customer Nondisclosure Pacts, Denies Suspension Flaw in Model S Car (June 10, 2016) * Tesla CEO Elon Musk Expects Apple to Make Car by 2020 (June 2, 2016) Mr. Musk, who has garnered attention for unusual financial maneuvers to support his companies, recused himself from voting on the deal at the Tesla board meeting at which it was approved and will do so for any vote on the SolarCity board as well, the letter said.
Full text: Elon Musk proposed combining his electric-car and solar-energy companies, in a bold effort to consolidate his holdings and offer widespread clean-energy products from vehicles to power in homes.
Tesla Motors Inc., Mr. Musk's Palo Alto, Calif., electric-car company, on Tuesday offered to acquire SolarCity Corp. in a stock deal valuing it at up to $2.8 billion. Mr. Musk is the chairman and largest shareholder of both companies.
Tesla in a letter to SolarCity's chief executive said its offer represented a value of $26.50 to $28.50 a share, or a premium of roughly 21% to 30% over SolarCity's Tuesday closing price of $21.19.
Related
* Tesla Offers Lower-Price Model S Sedan (June 9, 2016)
* Tesla Revises Customer Nondisclosure Pacts, Denies Suspension Flaw in Model S Car (June 10, 2016)
* Tesla CEO Elon Musk Expects Apple to Make Car by 2020 (June 2, 2016)
Mr. Musk, who has garnered attention for unusual financial maneuvers to support his companies, recused himself from voting on the deal at the Tesla board meeting at which it was approved and will do so for any vote on the SolarCity board as well, the letter said. Antonio Gracias, a director on the boards of both companies, also recused himself, the letter said.
Tesla said the deal is subject to approval of "a majority of disinterested stockholders" of both companies, suggesting Mr. Musk will also recuse himself from the shareholder voting.
SolarCity shares surged 24% in after hours trading, while Tesla shares fell 6.7%.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Shareholder voting; Stockholders
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 21, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1798468750
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1798468750?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Buying SolarCity: This Deal Defies Common Sense; Transaction has no industrial logic and shows weak governance
Author: Grant, Charley; Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 June 2016: n/a.
ProQuest document link
Abstract: None available.
Full text: Just a day after Tesla boss Elon Musk made the odd boast that one of its cars "floats well enough to turn into a boat," he did something even odder. Tesla's bid for solar panel installation firm SolarCity on Tuesday afternoon is the sort of move that, even for the most Panglossian Silicon Valley investor, stretches the bounds of industrial logic. It also stretches some ethical limits given the fact that Mr. Musk is the largest, albeit a minority, shareholder in each firm. He also has borrowed personally to buy SolarCity shares, which are down by 58% in the year to date.
Although the offer is for shares, not cash, meaning that Tesla won't have to go back to the capital markets well quite yet, the deal is far from the "obvious thing to do" that Mr. Musk says it is.
Both businesses, for different reasons, are cash hungry. In the past four quarters alone, Tesla burned up nearly 50 cents of cash for every dollar of sales it made. But it was practically the U.S. Mint compared with SolarCity which burned nearly $6 for each dollar of sales.
Tesla may be the less sustainable of the two because SolarCity auctions off the tax breaks it gets for installing solar panels on suburban rooftops to outside investors. The auto maker, meanwhile, is about to ramp up spending for the project that will make or break the company--its mass-market Model 3 sedan. Its market value--some 3½ times that of far larger Fiat Chrysler Automobiles--already assumes wild success.
Banding together with another cash-hungry business simply because it is also green and may one day make use of Tesla's batteries may excite some investors and burn short sellers in SolarCity's stock. But, as Mr. Musk warned about his amphibious wonder car, such harebrained schemes can only float "for short periods of time."
Write to Charley Grant at charles.grant@wsj.com and Spencer Jakab at spencer.jakab@wsj.com
Credit: By Charley Grant and Spencer Jakab
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 21, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1798476348
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1798476348?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Offers to Acquire SolarCity; Elon Musk is chairman, largest shareholder of both companies
Author: Ramsey, Mike; Cook, Lynn; Spector, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 June 2016: n/a.
ProQuest document link
Abstract:
Related * Heard on the Street: Tesla's Solar Deal Doesn't Make Sense * MoneyBeat: Elon Musk Eats the Shorts * Tesla Revises Customer Nondisclosure Pacts, Denies Suspension Flaw in Model S Car (June 10) * Tesla Offers Lower-Price Model S Sedan (June 9) * Tesla CEO Elon Musk Expects Apple to Make Car by 2020 (June 2) * Elon Musk Supports His Business Empire With Unusual Financial Moves (April 27) * The Musk Family Plan for Transforming the World's Energy (Sept. 18, 2014) Mr. Musk, who has borrowed money and shuffled funds among his companies, recused himself from voting on the deal at the Tesla board meeting at which it was approved and will do so for any vote on the SolarCity board as well, the offer letter said.
Full text: Elon Musk proposed combining the electric-car and solar-energy companies that he backs, the latest in a series of financial shuffles among disparate firms of his empire.
Tesla Motors Inc., Mr. Musk's Palo Alto, Calif., electric-car company, on Tuesday offered to acquire SolarCity Corp. in an all-stock deal valuing it at up to $2.8 billion. Mr. Musk is the chairman and largest shareholder of both companies.
Tesla shares tumbled 12% in after-hours trading following Mr. Musk's announcement, while SolarCity shares surged 15%.
Tesla, in a letter to SolarCity Chief Executive Lyndon Rive--also Mr. Musk's cousin--said its offer represented a value of between $26.50 and $28.50 a share, or a premium of roughly 21% to 30% over SolarCity's Tuesday closing price of $21.19. The mothers of Messrs. Musk and Rive are twin sisters.
"This is something that we have been thinking about and debated for many years," Mr. Musk said in a call with reporters Tuesday. "But the timing seemed to be right now" because Tesla is ramping up production of batteries used in conjunction with solar panels, SolarCity's main business, he said. Mr. Rive on the same call said he was "very excited" about the potential deal, which still requires approval from shareholders.
Related
* Heard on the Street: Tesla's Solar Deal Doesn't Make Sense
* MoneyBeat: Elon Musk Eats the Shorts
* Tesla Revises Customer Nondisclosure Pacts, Denies Suspension Flaw in Model S Car (June 10)
* Tesla Offers Lower-Price Model S Sedan (June 9)
* Tesla CEO Elon Musk Expects Apple to Make Car by 2020 (June 2)
* Elon Musk Supports His Business Empire With Unusual Financial Moves (April 27)
* The Musk Family Plan for Transforming the World's Energy (Sept. 18, 2014)
Mr. Musk, who has borrowed money and shuffled funds among his companies, recused himself from voting on the deal at the Tesla board meeting at which it was approved and will do so for any vote on the SolarCity board as well, the offer letter said. Antonio Gracias, a director on the boards of both companies, also recused himself, the letter said.
Tesla said the deal is subject to approval of "a majority of disinterested stockholders" of both companies.
"You should know that the board and the shareholders will be considering this, and so while I am personally excited, I will be recusing myself from the decision-making process," Mr. Rive said in a letter to employees. "Ultimately, the shareholders will decide."
The acquisition aims to create a company employing nearly 30,000 people with all products renamed "Tesla" that will package electric cars, batteries and solar panels for customers, Mr. Musk said.
But it would also add to the growing complexity and vertical integration of Tesla and add an unprofitable operation to its already-strained finances. Tesla, in a huge growth effort that includes building a $5 billion battery factory in Nevada, isn't expected to be profitable until 2020 at the earliest and recently launched a share sale to raise $1.7 billion for capital expenses.
Tesla, with a market capitalization of $32.7 billion is a much larger company than SolarCity, whose market value is $2.1 billion.
The proposal is also likely to draw further scrutiny of Mr. Musk's dealings with multiple companies he owns and helms, and their financial viability. In addition to Tesla and SolarCity, Mr. Musk is the largest shareholder and chief executive of rocket maker Space Exploration Technologies Inc.
SpaceX in 2014 was the largest buyer of $214 million in bonds SolarCity offered.
Mr. Musk has purchased shares of both Tesla and SolarCity when they have needed capital, and secured $475 million in personal credit lines with his own shares in the companies. Mr. Musk has disclosed the risks of margin calls related to the loans that can risk destabilizing the companies' stocks.
While Mr. Musk has called questions about the financial maneuvering "valid," he has defended the transactions with a philosophy that he has a moral obligation to put his own money at risk alongside those of other investors backing his companies.
"I don't think this creates additional financial risk for Tesla," Mr. Musk said on Tuesday of the proposed SolarCity takeover. "It only amplifies the possibilities for both companies."
Still, Tesla has burned billions of dollars in cash building expensive electric vehicles with ambitious production goals.
Tesla aims to start selling a more modestly priced Model 3 car starting at around $35,000 in the second half of next year, for which it has received nearly 400,000 reservations. "This does not impact Model 3 in any way, shape or form," Mr. Musk said of the proposed SolarCity takeover.
Mr. Musk has attracted a cultlike following, making bold predictions that include an eventual trip to Mars. Tesla's stock price has surged more than 500% since 2013, helping it achieve a market value of more than $30 billion, more than two thirds the current value of General Motors Co. On Sunday, he declared that Tesla's Model S car "floats well enough to turn into a boat" while emphasizing he wasn't recommending motorists attempt such a feat.
But Tesla's surging stock hasn't yet translated to profits, and investors have closely watched the company for signs of dangerous cash burns.
Tesla's proposed takeover comes amid significant struggles for SolarCity, which has suffered stock-price declines exceeding 60% over the past 12 months and lost $283 million during the first three months of this year.
The San Mateo, Calif., company installs solar panels at residences across the U.S. The company stumbled as costs rose and it cut an important growth target by half, a move SolarCity attributed to a desire to focus on profitability.
Mr. Musk said the proposed takeover wasn't motivated by SolarCity's declining stock price.
SolarCity's business model is built on leasing rooftop panels to homeowners for as long as 20 years, but owning home solar arrays can bring greater savings so many consumers are opting to buy.
SolarCity's competition has intensified over the past year as more upstart firms began offering homeowners low-cost loans to kit out their roofs.
More broadly, the home solar industry is facing stiff headwinds across several states as electric utilities push back against policies that have made it economic for homeowners to generate their own rooftop solar power and sell excess electricity they didn't use to the power grid.
Nevada, Hawaii and other states traditionally friendly to renewable energy efforts have dialed back their solar-power incentives payments, which are the backbone of home solar firms' balance sheets.
Several states have significantly lowered the amount of money they are willing to pay homeowners with solar panels for their excess electricity; many more states are weighing changes to those so-called net metering programs.
Write to Mike Ramsey at michael.ramsey@wsj.com , Lynn Cook at lynn.cook@wsj.com and Mike Spector at mike.spector@wsj.com
Credit: By Mike Ramsey, Lynn Cook and Mike Spector
Subject: Acquisitions & mergers; Stockholders; Lines of credit
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 22, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1798553328
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1798553328?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Moves to Buy Solar Firm Tied to Founder Musk
Author: Ramsey, Mike; Cook, Lynn; Spector, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]22 June 2016: A.1.
ProQuest document link
Abstract:
Tesla's stock price has surged more than 500% since 2013, helping it achieve a market capitalization of more than two thirds the current value of General Motors Co. On Sunday, he declared that Tesla's Model S car "floats well enough to turn into a boat" while emphasizing he wasn't recommending motorists attempt such a feat.
Full text: Elon Musk proposed combining the electric-car and solar-energy companies that he backs, the latest in a series of financial shuffles among disparate firms of his empire.
Tesla Motors Inc., Mr. Musk's Palo Alto, Calif., electric-car company, on Tuesday offered to acquire SolarCity Corp. in an all-stock deal valuing it at up to $2.8 billion. Mr. Musk is the chairman and largest shareholder of both companies.
Tesla shares tumbled 12% in after-hours trading following Mr. Musk's announcement, while SolarCity shares surged 15%.
Tesla, in a letter to SolarCity Chief Executive Lyndon Rive -- also Mr. Musk's cousin -- said its offer represented a value of between $26.50 and $28.50 a share, or a premium of roughly 21% to 30% over SolarCity's Tuesday closing price of $21.19. The mothers of Messrs. Musk and Rive are twin sisters.
"This is something that we have been thinking about and debated for many years," Mr. Musk said in a call with reporters Tuesday. "But the timing seemed to be right now" because Tesla is ramping up production of batteries used in conjunction with solar panels, SolarCity's main business, he said. Mr. Rive on the same call said he was "very excited" about the potential deal, which still requires approval from shareholders.
Mr. Musk, who has borrowed money and shuffled funds among his companies, recused himself from voting on the deal at the Tesla board meeting at which it was approved and will do so for any vote on the SolarCity board as well, the offer letter said. Antonio Gracias, a director on the boards of both companies, also recused himself, the letter said.
Tesla said the deal is subject to approval of "a majority of disinterested stockholders" of both companies. Mr. Musk won't vote his shares in either company, a Tesla spokeswoman said.
In a letter to employees, Mr. Rive said: "You should know that the board and the shareholders will be considering this, and so while I am personally excited, I will be recusing myself from the decision-making process. Ultimately, the shareholders will decide."
The acquisition aims to create a company employing nearly 30,000 people with all products renamed "Tesla" that will package electric cars, batteries and solar panels for customers, Mr. Musk said.
But it would also add to the growing complexity and vertical integration of Tesla and add an unprofitable operation to its already-strained finances. Tesla, in a huge growth effort that includes building a $5 billion battery factory in Nevada, isn't expected to be profitable until 2020 at the earliest and recently launched a share sale to raise $1.7 billion for capital expenses.
Tesla, with a market capitalization of $32.7 billion, is a much-larger company than SolarCity.
The proposal is also likely to draw further scrutiny of Mr. Musk's dealings with multiple companies he owns and helms, and their financial viability. In addition to Tesla and SolarCity, Mr. Musk is the largest shareholder and chief executive of rocket maker Space Exploration Technologies Inc.
SpaceX in 2014 was the largest buyer of $214 million in bonds SolarCity offered.
Mr. Musk has purchased shares of both Tesla and SolarCity when they have needed capital, and secured $475 million in personal credit lines with his own shares in the companies. Mr. Musk has disclosed the risks of margin calls related to the loans that can risk destabilizing the companies' stocks.
While Mr. Musk has called questions about the financial maneuvering "valid," he has defended the transactions with a philosophy that he has a moral obligation to put his own money at risk alongside those of other investors backing his companies.
"I don't think this creates additional financial risk for Tesla," Mr. Musk said on Tuesday of the proposed SolarCity takeover. "It only amplifies the possibilities for both companies."
Still, Tesla has burned billions of dollars in cash building expensive electric vehicles with ambitious production goals.
Tesla aims to start selling a more modestly priced Model 3 car starting at around $35,000 in the second half of next year, for which it has received nearly 400,000 reservations. "This does not impact Model 3 in any way, shape or form," Mr. Musk said of the proposed SolarCity takeover.
Mr. Musk has attracted a cultlike following, making bold predictions that include an eventual trip to Mars. Tesla's stock price has surged more than 500% since 2013, helping it achieve a market capitalization of more than two thirds the current value of General Motors Co. On Sunday, he declared that Tesla's Model S car "floats well enough to turn into a boat" while emphasizing he wasn't recommending motorists attempt such a feat.
But Tesla's surging stock hasn't yet translated to profits, and investors have closely watched the company for signs of dangerous cash burns.
Tesla's proposed takeover comes amid significant struggles for SolarCity, which has suffered stock-price declines exceeding 60% over the past 12 months and lost $283 million during the first three months of this year.
The San Mateo, Calif., company installs solar panels at residences across the U.S. The company stumbled as costs rose and it cut an important growth target by half, a move SolarCity attributed to a desire to focus on profitability.
Mr. Musk said the proposed takeover wasn't motivated by SolarCity's declining stock price.
SolarCity's business model is built on leasing rooftop panels to homeowners for as long as 20 years, but owning home solar arrays can bring greater savings so many consumers are opting to buy.
SolarCity's competition has intensified over the past year as more upstart firms began offering homeowners low-cost loans to kit out their roofs.
More broadly, the home-solar industry is facing stiff headwinds across several states as electric utilities push back against policies that have made it economic for homeowners to generate their own rooftop solar power and sell excess electricity they didn't use to the power grid.
Nevada, Hawaii and other states have dialed back their solar-power incentives payments.
Several states have significantly lowered the amount of money they are willing to pay homeowners with solar panels for their excess electricity; many more states are weighing changes to those so-called net metering programs.
---
Rebecca Smith contributed to this article.
Credit: By Mike Ramsey, Lynn Cook and Mike Spector
Subject: Acquisitions & mergers; Electric vehicles; Solar energy
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: SolarCity Corp; NAICS: 221114, 238220, 3334 14
Classification: 8680: Transportation equipment industry; 2330: Acquisitions & mergers; 1510: Energy resources; 8370: Construction & engineering industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: Jun 22, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1798615701
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1798615701?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Shares Hit Hard After Offer to Buy SolarCity; Investors unhappy with Elon Musk's plan to merge the electric-car and solar-energy companies he backs
Author: Ramsey, Mike; Smith, Rebecca
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 June 2016: n/a.
ProQuest document link
Abstract:
The planned takeover puts "your head in the conflict-of-interest blender," said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware.
Full text: Tesla Motors Inc.'s plan to acquire SolarCity Corp. got a cold reception from investors and analysts, who raised concerns the takeover could prove a diversion for the electric-car maker and worsen both companies' strained finances.
Tesla shares plunged by more than 10% on Wednesday, a day after it proposed an all-stock deal valuing the solar-power company at up to $2.8 billion. Both firms are unprofitable, and SolarCity lost more than 60% of its value over the past 12 months. Its shares closed 3.3% higher.
"We are not happy with the offer," said Sam Korus, an analyst with ARK Investment Management LLC, which holds 75,000 shares of Tesla in three different funds and has often been bullish on the company. He said his firm would likely vote against the offer.
Tesla CEO Elon Musk is the chairman and largest shareholder of both companies. Mr. Musk, whose cousin Lyndon Rive runs SolarCity, owns more than 20% of each company and has recused himself from shareholder votes and board decisions.
"The market obviously hates this," said Shawn Kravetz, a fund manager at Esplanade Capital LLC in Boston who invests in solar companies and until recently owned SolarCity shares. "There are symbiotic relationships here, but cousins should not get married."
Mr. Kravetz fears SolarCity shares could plunge even further if the deal fails. Barclays Capital said the deal would add another $2.6 billion in debt to Tesla's balance sheet for a solar company with limited synergies and uncertain growth and cash prospects.
More
* Tesla Offers to Acquire SolarCity
* Heard on the Street: Why Tesla Is No Trillion-Dollar Baby
* Heard on the Street: Valuing SolarCity Takes Bold Assumptions
* Heard on the Street: This Deal Defies Common Sense
* Short Sellers Get Slammed
* What Analysts Are Saying
Oppenheimer & Co. analyst Colin Rusch suggested investors would view the takeover as a bailout of SolarCity and lowered Tesla's rating to perform from outperform.
The planned takeover puts "your head in the conflict-of-interest blender," said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. He said loyalty is difficult to discern when directors are on boards of both companies in merger discussions. "One of these companies is getting a better deal. Which one is it?"
Mr. Musk on Wednesday defended the proposed takeover, couching the offer as part of a long-term plan to create a clean-energy company that will take advantage of inexorable trends toward all vehicles becoming electric and consumers tapping the sun for power.
In a call with analysts, he said acquiring SolarCity was "an obviously correct move" that would lower costs and provide synergies for both producing and selling products to customers, creating significant long-term value for investors.
"As a combined automotive and power storage and power generation company...the potential is there for Tesla to be a $1 trillion company," Mr. Musk said.
Tesla, burning cash in a race to meet ambitious production targets for a more affordable Model 3 electric car and build a Nevada battery factory, isn't expected to be profitable until 2020 at the earliest. A deal could force the Palo Alto, Calif., auto maker to once again seek cash with no guarantees that capital markets will remain hospitable, analysts said.
One rationale for the deal is states' aims to reduce dependency on fossil fuels. As much as a third of California's afternoon electricity over the past week came from renewable sources, and the state is racing to get half its power that way by 2030.
The takeover plan aims to create a company employing nearly 30,000 people with all products renamed "Tesla" that will package electric cars, batteries and solar panels for customers.
Some cash-strapped startups often fail to book profits for years before eventually becoming successful. Investors bullish on Tesla are betting Mr. Musk will meet his clean-car goals and effectively challenge traditional auto makers as government-mandated fuel-economy targets surge in coming years.
"We think it's an exciting deal," said Katherine Ryzhaya, chief commercial officer for Advanced Microgrid Solutions in San Francisco, a company that sells energy-storage systems and is installing Tesla batteries at California State University's Long Beach campus and elsewhere. "The more visibility the sector gets the better, and Elon Musk attracts attention."
Still, Wednesday's Tesla selloff augurs possible tough sledding for Mr. Musk when shareholders vote on the takeover plan, which the company's general counsel said should occur in the next few months.
"We expect a robust shareholder fight over this acquisition centered on corporate governance," Oppenheimer's Colin Rusch said.
In addition to the familial ties, Mr. Musk has a history of borrowing money and buying shares in both companies when they have needed capital. Mr. Musk's shares in both companies serve as collateral on loans that are subject to margin calls if the stocks decline too much, potentially destabilizing both firms.
Mr. Musk has called questions about the financial maneuvers valid while defending them under a philosophy that he should put his own money at risk alongside other investors backing his companies.
Mr. Musk said the discussions would be above board with independent directors and shareholders weighing the takeover plan. "We've tried to do this in the way that's--in a way as fair as possible and really going beyond what's legally required and then to make it as not just legally correct but morally correct," he said.
Cassandra Sweet contributed to this article.
Corrections & Amplifications: SolarCity's chief executive is Lyndon Rive. An earlier version of this article incorrectly spelled Mr. Rive's name.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey and Rebecca Smith
Subject: Acquisitions & mergers; Corporate governance; Shareholder voting; Investments; Electric vehicles; Stockholders; Automobile industry
Location: California
People: Rive, Lyndon
Company / organization: Name: ARK Investment Management LLC; NAICS: 523930; Name: Esplanade Capital LLC; NAICS: 525910; Name: University of Delaware; NAICS: 611310; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 22, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1798788208
Document URL: https://login.ezproxy.uta.edu/login?ur l=https://search-proquest-com.ezproxy.uta.edu/docview/1798788208?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla: Incessant Cash Burn and Looming Competition Isn't a Trillion-Dollar Formula; Tesla's old formula for success won't be successful forever
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 June 2016: n/a.
ProQuest document link
Abstract:
Visions of a future dominated by electric cars have long powered Tesla Motors' stock price. [...]the big auto makers have much more financial resources at their disposal to compete on price, should they choose to.
Full text: Visions of a future dominated by electric cars have long powered Tesla Motors' stock price. Sooner or later, the reality of corporate finance is likely to intervene.
Tesla's offer to acquire solar-energy company SolarCity brings this issue to the forefront.
Though details on the financial benefits of the proposed tie-up are scant, Tesla CEO Elon Musk was his usual bold self on a conference call with analysts on Wednesday. He said the proposed deal could help Tesla become the world's first company with a trillion-dollar market capitalization. That would require a more than 30-fold increase from today's value.
Yet that boast may not be the most jarring one Mr. Musk has offered of late. Powered by the new Model 3 mass-market sedan, Tesla aims to deliver 500,000 vehicles in 2018, Mr. Musk said last month. That target is two years ahead of the previous goal. Tesla forecasts 80,000 to 90,000 deliveries this year.
In a world of slow growth and cautious corporate management teams, bold ambition is a central part of Tesla's appeal to investors. But reaching for the stars has proven expensive .
Tesla's core business has burned more than $3 billion in cash over the past six quarters. Capital needs are expected to further intensify over the coming years. No surprise there; automobile manufacturing is a low-return, capital-intensive business.
The SolarCity transaction could further pressure Tesla's financial profile. Mr. Musk said Wednesday that Tesla would be willing to provide a bridge loan to SolarCity before the deal closes if needed, although he thought such a scenario to be unlikely.
Still, even the possibility of such a loan should raise eyebrows. Mr. Musk said he expects SolarCity to be cash-flow positive within three to six months. That could be the case in a given quarter, but analysts at Barclays forecast 2016 free cash flow at negative-$1.8 billion. As for Tesla, Barclays expects the auto maker to burn $2.1 billion without much improvement over the coming two years. The combined company could burn as much as $3.4 billion in 2018, before factoring in the financial impact of the merger.
Tesla has issued equity or convertible debt in every year since 2010, most recently last month. Further stock issuance will be needed to close the SolarCity deal, and if Barclays's math is correct, the coming years won't be any different.
Continuing dependence on capital markets access hasn't hurt Tesla shares yet . An easy-money investing environment and pioneering products helped. But competition is intensifying. General Motors is set to begin selling the Chevrolet Bolt, an electric car with 200 miles of driving range, later this year. Volkswagen said last week that it plans to develop about 30 different electric models over the next 10 years, with the goal of electric cars accounting for one-quarter of total company sales. Other major manufacturers also have signaled an increased focus in this area.
True, these companies don't carry the same type of brand cachet with electric-car enthusiasts. But the big auto makers have much more financial resources at their disposal to compete on price, should they choose to. And Tesla won't be able to justify its valuation over the long term without becoming a major presence in the mass market.
All this would be manageable for investors, were Tesla not valued as though its ambitions have already been achieved. The shares trade at more than 120 times forward adjusted earnings, according to FactSet.
Incessant cash burn and looming competition is hardly a trillion-dollar formula.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Electric vehicles; Acquisitions & mergers; Investments
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: General Motors Corp; NAICS: 336111, 333415, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 22, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1798811554
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1798811554?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Valuing Companies Like SolarCity Requires Bold Assumptions; As it offers to buy solar-panel company SolarCity, Tesla Motors is confident in valuing a business about which Wall Street can't make up its mind
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 June 2016: n/a.
ProQuest document link
Abstract:
Yet the combined market value of the electric-car maker and solar-panel seller fell the day after the news, indicating skepticism .
Full text: If Tesla Motors succeeds in buying SolarCity, it will own a company that relies on assumptions about pricing and customer behavior that stretch to 2036. By then Elon Musk could be living on Mars .
Yet the combined market value of the electric-car maker and solar-panel seller fell the day after the news, indicating skepticism . Perhaps just as telling, the share prices of the two companies most similar to SolarCity, Vivint Solar and Sunrun, were trailing the market. The opposite usually occurs when someone pays a premium for a competitor.
But then the market is often wrong and it has had
an especially hard time figuring out solar stocks . SolarCity's shares have risen or fallen by at least 5% on 166 separate trading days, or nearly one-fifth of the time, since going public. In a two-year span its market value surged tenfold but it is down by 70% from its 2014 peak.
But these wild swings aren't for a company with pie-in-the-sky energy technology. SolarCity is in the business of installing rooftop solar panels--made by others--that are supposed to generate steady income for decades. Growth is always uncertain, but the value of solar companies' installed bases shouldn't be. Companies provide detailed assumptions to underpin an exact value per watt for their businesses if they had to shut their doors tomorrow and just operate in runoff mode.
The problem is that those projections are fishy. Take something as basic as how long customers will lease rooftop panels or how often they have to replace expensive inverters. Vivint, for example, assumes 30 years and two replacements, at year 11 and 21. Contracts are only for 20 years, but they assume all customers will renew at 90% of the original rate. This all depends on the retail cost of electricity in 2036 and assumes some superior renewable energy solution won't be available. And since most customers will either move or die in the next 30 years, it assumes new owners or heirs will take over existing contracts.
Even if all goes to plan, solar companies are burning cash today and rely on investors to pay them for streams of tax breaks tied to solar. The price they are willing to pay has varied considerably. Vivint, SunRun and SolarCity each use a 6% discount rate to arrive at a value per watt for their installed base. Raise that and the value per watt moves much lower.
Last but not least are the considerable overheads that affect the cost per watt for each installation. In the first quarter, for example, SolarCity's cost rose to $3.18 from $2.89 a year earlier. They project a sharp drop for the remainder of this year as installations surge, but growth eats up scarce cash in the short run.
Tesla itself is a risky bet for the mundane reasons of valuation and execution risk. SolarCity depends on far more obscure assumptions. Adding that uncertainty to Tesla's big challenges won't help either company.
Credit: By Spencer Jakab
Subject: Photovoltaic cells
People: Musk, Elon
Company / organization: Name: Vivint Solar Inc; NAICS: 221114; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 22, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1798836317
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1798836317?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Shares Hit Hard After Offer to Buy SolarCity; Investors unhappy with Elon Musk's plan to merge the electric-car and solar-energy companies he backs
Author: Ramsey, Mike; Smith, Rebecca
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 June 2016: n/a.
ProQuest document link
Abstract:
The planned takeover puts "your head in the conflict-of-interest blender," said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware.
Full text: Tesla Motors Inc.'s plan to acquire SolarCity Corp. got a cold reception from investors and analysts, who raised concerns the takeover could prove a diversion for the electric-car maker and worsen both companies' strained finances.
Tesla shares plunged by more than 10% on Wednesday, a day after it proposed an all-stock deal valuing the solar-power company at up to $2.8 billion. Both firms are unprofitable, and SolarCity lost more than 60% of its value in the past 12 months. Its shares closed 3.3% higher.
"We are not happy with the offer," said Sam Korus, an analyst with ARK Investment Management LLC, which holds 75,000 shares of Tesla in three different funds and has often been bullish on the company. He said his firm would likely vote against the offer.
Tesla CEO Elon Musk is the chairman and largest shareholder of both companies. Mr. Musk, whose cousin Lyndon Rive runs SolarCity, owns more than 20% of each company and has recused himself from shareholder votes and board decisions.
"The market obviously hates this," said Shawn Kravetz, a fund manager at Esplanade Capital LLC in Boston who invests in solar companies and until recently owned SolarCity shares. "There are symbiotic relationships here, but cousins should not get married."
Mr. Kravetz fears SolarCity shares could plunge even further if the deal fails. Barclays Capital said the deal would add another $2.6 billion in debt to Tesla's balance sheet for a solar company with limited synergies and uncertain growth and cash prospects.
Related Coverage
* Tesla Offers to Acquire SolarCity
* Heard on the Street: Why Tesla Is No Trillion-Dollar Baby
* Heard on the Street: Valuing SolarCity Takes Bold Assumptions
* Heard on the Street: This Deal Defies Common Sense
* Short Sellers Get Slammed
* What Analysts Are Saying
Oppenheimer & Co. analyst Colin Rusch suggested investors would view the takeover as a bailout of SolarCity and lowered Tesla's rating to perform from outperform.
The planned takeover puts "your head in the conflict-of-interest blender," said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. He said loyalty is difficult to discern when directors are on boards of both companies in merger discussions. "One of these companies is getting a better deal. Which one is it?"
A SolarCity spokesman said those who are predicting a strain on finances don't understand his company's business.
"SolarCity is the overwhelming leader in a high growth market," spokesman Jonathan Bass said Wednesday night. "We already have more than $7 billion in estimated future contracted payments coming to us, significantly exceeding our debt."
Mr. Musk on Wednesday defended the proposed takeover, couching the offer as part of a long-term plan to create a clean-energy company that will take advantage of inexorable trends toward all vehicles becoming electric and consumers tapping the sun for power.
In a call with analysts, he said acquiring SolarCity was "an obviously correct move" that would lower costs and provide synergies for both producing and selling products to customers, creating significant long-term value for investors.
"As a combined automotive and power storage and power generation company...the potential is there for Tesla to be a $1 trillion company," Mr. Musk said.
Tesla, burning cash in a race to meet ambitious production targets for a more affordable Model 3 electric car and build a Nevada battery factory, isn't expected to be profitable until 2020 at the earliest. A deal could force the Palo Alto, Calif., auto maker to once again seek cash with no guarantees that capital markets will remain hospitable, analysts said.
One rationale for the deal is states' aims to reduce dependency on fossil fuels. As much as a third of California's afternoon electricity over the past week came from renewable sources, and the state is racing to get half its power that way by 2030.
The takeover plan aims to create a company employing nearly 30,000 people with all products renamed "Tesla" that will package electric cars, batteries and solar panels for customers.
Some cash-strapped startups often fail to book profits for years before eventually becoming successful. Investors bullish on Tesla are betting Mr. Musk will meet his clean-car goals and effectively challenge traditional auto makers as government-mandated fuel-economy targets surge in coming years.
"We think it's an exciting deal," said Katherine Ryzhaya, chief commercial officer for Advanced Microgrid Solutions in San Francisco, a company that sells energy-storage systems and is installing Tesla batteries at California State University's Long Beach campus and elsewhere. "The more visibility the sector gets the better, and Elon Musk attracts attention."
Still, Wednesday's Tesla selloff augurs possible tough sledding for Mr. Musk when shareholders vote on the takeover plan, which the company's general counsel said should occur in the next few months.
"We expect a robust shareholder fight over this acquisition centered on corporate governance," Oppenheimer's Colin Rusch said.
In addition to the familial ties, Mr. Musk has a history of borrowing money and buying shares in both companies when they have needed capital. Mr. Musk's shares in both companies serve as collateral on loans that are subject to margin calls if the stocks decline too much, potentially destabilizing both firms.
Mr. Musk has called questions about the financial maneuvers valid while defending them under a philosophy that he should put his own money at risk alongside other investors backing his companies.
Mr. Musk said the discussions would be above board with independent directors and shareholders weighing the takeover plan. "We've tried to do this in the way that's--in a way as fair as possible and really going beyond what's legally required and then to make it as not just legally correct but morally correct," he said.
Cassandra Sweet contributed to this article.
Corrections & Amplifications: SolarCity's chief executive is Lyndon Rive. An earlier version of this article incorrectly spelled Mr. Rive's name.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey and Rebecca Smith
Subject: Acquisitions & mergers; Corporate governance; Shareholder voting; Investments; Electric vehicles; Stockholders
Location: California
People: Rive, Lyndon
Company / organization: Name: ARK Investment Management LLC; NAICS: 523930; Name: Esplanade Capital LLC; NAICS: 525910; Name: University of Delaware; NAICS: 611310; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 23, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1798902405
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docv iew/1798902405?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Deal Worries Investors
Author: Ramsey, Mike; Smith, Rebecca
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]23 June 2016: B.1.
ProQuest document link
Abstract:
The planned takeover puts "your head in the conflict-of-interest blender," said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware.
Full text: Tesla Motors Inc.'s plan to acquire SolarCity Corp. got a cold reception from investors and analysts, who raised concerns the takeover could prove a diversion for the electric-car maker and worsen both companies' strained finances.
Tesla shares plunged by more than 10% on Wednesday, a day after it proposed an all-stock deal valuing the solar-power company at up to $2.8 billion. Both firms are unprofitable, and SolarCity lost more than 60% of its value over the past 12 months. Its shares closed 3.3% higher.
"We are not happy with the offer," said Sam Korus, an analyst with ARK Investment Management LLC, which holds 75,000 shares of Tesla in three different funds and has often been bullish on the company. He said his firm would likely vote against the offer.
Tesla CEO Elon Musk is the chairman and largest shareholder of both companies. Mr. Musk, whose cousin Lyndon Rive runs SolarCity, owns more than 20% of each company and has recused himself from shareholder votes and board decisions.
"The market obviously hates this," said Shawn Kravetz, a fund manager at Esplanade Capital LLC in Boston who invests in solar companies and until recently owned SolarCity shares. "There are symbiotic relationships here, but cousins should not get married."
Mr. Kravetz fears SolarCity shares could plunge even further if the deal fails. Barclays Capital said the deal would add another $2.6 billion in debt to Tesla's balance sheet for a solar company with limited synergies and uncertain growth and cash prospects.
Oppenheimer & Co. analyst Colin Rusch suggested investors would view the takeover as a bailout of SolarCity and lowered Tesla's rating to perform from outperform.
The planned takeover puts "your head in the conflict-of-interest blender," said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. He said loyalty is difficult to discern when directors are on boards of both companies in merger discussions. "One of these companies is getting a better deal. Which one is it?"
A SolarCity spokesman said those who are predicting a strain on finances don't understand his company's business.
"SolarCity is the overwhelming leader in a high growth market," spokesman Jonathan Bass said Wednesday night. "We already have more than $7 billion in estimated future contracted payments coming to us, significantly exceeding our debt."
Mr. Musk on Wednesday defended the proposed takeover, couching the offer as part of a long-term plan to create a clean-energy company that will take advantage of inexorable trends toward all vehicles becoming electric and consumers tapping the sun for power.
In a call with analysts, he said acquiring SolarCity was "an obviously correct move" that would lower costs and provide synergies for both producing and selling products to customers, creating significant long-term value for investors.
"As a combined automotive and power storage and power generation company . . . the potential is there for Tesla to be a $1 trillion company," Mr. Musk said.
Tesla, burning cash in a race to meet ambitious production targets, isn't expected to be profitable until 2020 at the earliest. A deal could force the Palo Alto, Calif., auto maker to once again seek cash with no guarantees that capital markets will remain hospitable, analysts said.
Some cash-strapped startups often fail to book profits for years before eventually becoming successful. Investors bullish on Tesla are betting Mr. Musk will meet his clean-car goals and effectively challenge traditional auto makers as government-mandated fuel-economy targets surge in coming years.
"We think it's an exciting deal," said Katherine Ryzhaya, chief commercial officer for Advanced Microgrid Solutions in San Francisco, a company that sells energy-storage systems. "The more visibility the sector gets the better, and Elon Musk attracts attention."
Still, Wednesday's Tesla selloff augurs possible tough sledding for Mr. Musk when shareholders vote on the takeover plan, which the company's general counsel said should occur in the next few months.
"We expect a robust shareholder fight over this acquisition centered on corporate governance," Oppenheimer's Colin Rusch said.
Mr. Musk said the discussions would be above board with independent directors and shareholders weighing the takeover plan.
---
Cassandra Sweet contributed to this article.
Credit: By Mike Ramsey and Rebecca Smith
Subject: Shareholder voting; Acquisitions & mergers
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: SolarCity Corp; NAICS: 221114, 238220, 333414
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Jun 23, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1798955784
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1798955784?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla to Buy Solar Firm Tied to Elon Musk
Author: Ramsey, Mike; Cook, Lynn; Spector, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 June 2016: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc., Mr. Musk's Palo Alto, Calif., electric-car company, on Tuesday offered to acquire SolarCity Corp., in which Silver Lake Kraftwerk has a stake, in an all-stock deal valuing it at up to $2.8 billion.
Full text: Elon Musk proposed combining the electric-car and solar-energy companies that he backs, the latest in a series of financial shuffles among disparate firms of his empire.
Tesla Motors Inc., Mr. Musk's Palo Alto, Calif., electric-car company, on Tuesday offered to acquire SolarCity Corp., in which Silver Lake Kraftwerk has a stake, in an all-stock deal valuing it at up to $2.8 billion. Mr. Musk is the chairman and largest shareholder of both companies.
Tesla shares were off more than 8% in early trading Wednesday before recovering slightly, while SolarCity shares surged 7.1%.
Tesla, in a letter to SolarCity Chief Executive Lyndon Rive--also Mr. Musk's cousin--said its offer represented a value of between $26.50 and $28.50 a share, or a premium of roughly 21% to 30% over SolarCity's Tuesday closing price of $21.19. The mothers of Messrs. Musk and Rive are twin sisters.
"This is something that we have been thinking about and debated for many years," Mr. Musk said in a call with reporters Tuesday. "But the timing seemed to be right now" because Tesla is ramping up production of batteries used in conjunction with solar panels, SolarCity's main business, he said. Mr. Rive on the same call said he was "very excited" about the potential deal, which still requires approval from shareholders.
Mr. Musk, who has borrowed money and shuffled funds among his companies, recused himself from voting on the deal at the Tesla board meeting at which it was approved and will do so for any vote on the SolarCity board as well, the offer letter said. Antonio Gracias, a director on the boards of both companies, also recused himself, the letter said.
Tesla said the deal is subject to approval of "a majority of disinterested stockholders" of both companies. Mr. Musk won't vote his shares in either company, a Tesla spokeswoman said.
In a letter to employees, Mr. Rive said: "You should know that the board and the shareholders will be considering this, and so while I am personally excited, I will be recusing myself from the decision-making process. Ultimately, the shareholders will decide."
The acquisition aims to create a company employing nearly 30,000 people with all products renamed "Tesla" that will package electric cars, batteries and solar panels for customers, Mr. Musk said.
But it would also add to the growing complexity and vertical integration of Tesla and add an unprofitable operation to its already-strained finances. Tesla, in a huge growth effort that includes building a $5 billion battery factory in Nevada, isn't expected to be profitable until 2020 at the earliest and recently launched a share sale to raise $1.7 billion for capital expenses.
Tesla, with a market capitalization of $32.7 billion, is a much larger company than SolarCity.
The proposal is also likely to draw further scrutiny of Mr. Musk's dealings with multiple companies he owns and helms, and their financial viability. In addition to Tesla and SolarCity, Mr. Musk is the largest shareholder and chief executive of rocket maker Space Exploration Technologies Inc.
SpaceX in 2014 was the largest buyer of $214 million in bonds SolarCity offered.
Mr. Musk has purchased shares of both Tesla and SolarCity when they have needed capital, and secured $475 million in personal credit lines with his own shares in the companies. Mr. Musk has disclosed the risks of margin calls related to the loans that can risk destabilizing the companies' stocks.
While Mr. Musk has called questions about the financial maneuvering "valid," he has defended the transactions with a philosophy that he has a moral obligation to put his own money at risk alongside those of other investors backing his companies.
"I don't think this creates additional financial risk for Tesla," Mr. Musk said on Tuesday of the proposed SolarCity takeover. "It only amplifies the possibilities for both companies."
Still, Tesla has burned billions of dollars in cash building expensive electric vehicles with ambitious production goals.
Tesla aims to start selling a more modestly priced Model 3 car starting at around $35,000 in the second half of next year, for which it has received nearly 400,000 reservations. "This does not impact Model 3 in any way, shape or form," Mr. Musk said of the proposed SolarCity takeover.
Mr. Musk has attracted a cultlike following, making bold predictions that include an eventual trip to Mars. Tesla's stock price has surged more than 500% since 2013, helping it achieve a market capitalization of more than two thirds the current value of General Motors Co.
But Tesla's surging stock hasn't yet translated to profits, and investors have closely watched the company for signs of dangerous cash burns.
Tesla's proposed takeover comes amid significant struggles for SolarCity, which has suffered stock-price declines exceeding 60% over the past 12 months and lost $283 million during the first three months of this year.
The San Mateo, Calif., company installs solar panels at residences across the U.S. The company stumbled as costs rose and it cut an important growth target by half, a move SolarCity attributed to a desire to focus on profitability.
Mr. Musk said the proposed takeover wasn't motivated by SolarCity's declining stock price.
SolarCity's business model is built on leasing rooftop panels to homeowners for as long as 20 years, but owning home solar arrays can bring greater savings so many consumers are opting to buy.
SolarCity's competition has intensified over the past year as more upstart firms began offering homeowners low-cost loans to kit out their roofs.
Silver Lake Kraftwerk in 2015 agreed to put up $100 million in a $113 million investment in SolarCity.
Silver Lake Kraftwerk, the San Mateo-based growth equity arm of technology investor Silver Lake, in a statement issued at that time said it would be joined by Mr. Musk and Mr. Rive, who would invest $10 million and $3 million, respectively.
Silver Lake Kraftwerk first invested in SolarCity alongside Valor Equity Partners in an $81 million equity financing round in 2012. The company went public in December 2012, pricing 11.5 million shares at $8 each. Silver Lake Kraftwerk exited its investment in SolarCity in late 2013.
Credit: By Mike Ramsey, Lynn Cook and Mike Spector
Subject: Acquisitions & mergers; Electric vehicles; Stockholders; Lines of credit
Location: Palo Alto California
Company / organization: Name: Silver Lake Kraftwerk; NAICS: 523910; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 23, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1799031531
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1799031531?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Wall Street's Enthusiasm for Tesla Cools; Car maker's offer to acquire SolarCity seen as a confounding move by some analysts
Author: Vigna, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 June 2016: n/a.
ProQuest document link
Abstract:
Acquiring SolarCity won't help Tesla tap the capital markets, reduce its cash burn or make better cars, Morgan Stanley analyst Adam Jonas wrote Thursday, recommending investors be less aggressive in buying the stock and cutting his price forecast to $245 from $333.
Full text: Wall Street used to be crowded with cheerleaders for Tesla Motors Inc., but they are getting harder to find.
Analysts who had long praised the electric-car maker turned sour this week, after billionaire entrepreneur Elon Musk moved Tuesday to combine two of his companies by having Tesla buy SolarCity Corp. for up to $2.8 billion in stock.
Some called it a confounding move , a merger of two money-losing companies facing their own challenges in distinct markets.
Acquiring SolarCity won't help Tesla tap the capital markets, reduce its cash burn or make better cars, Morgan Stanley analyst Adam Jonas wrote Thursday, recommending investors be less aggressive in buying the stock and cutting his price forecast to $245 from $333.
"While there may be any number of lucid arguments supporting the strategic rationale of a combination," Mr. Jonas wrote, "we believe many of the benefits could have been achieved through arm's length/strategic partnership and without the risks inherent in exposing Tesla shareholders to the financial and capital markets risks."
Mr. Jonas's take is notable. Last summer, he had a $465 price target on Tesla's stock and said the company was "uniquely positioned to dominate" the stodgy auto industry. Since then, Mr. Jonas and much of Wall Street have grown more wary.
Tesla's shares were little changed Thursday at $196.40 after a sharp drop a day earlier . SolarCity's stock was up slightly at $21.98--well below the offer from Tesla, which values SolarCity shares at $23.96 to $25.73 at Thursday's close.
Wall Street analysts now on average have a "hold" rating on Tesla's stock, according to data compiled by FactSet. That essentially means they are telling investors not to buy any more, and not to sell any, either. The average price target is $252.
Oppenheimer cut the stock to a "perform" rating Wednesday, saying it didn't see much benefit from the SolarCity deal. Piper Jaffray said earlier in June it can't recommend buying the stock, though it did recommend buying the car.
Mr. Musk owns more than 20% of each company and has recused himself from shareholder votes and board decisions on the deal.
Related Coverage
* Dealpolitik: Conflicts Abound in SolarCity Deal
* Tesla Offers to Acquire SolarCity
* Heard on the Street: Why Tesla Is No Trillion-Dollar Baby
* Heard on the Street: Valuing SolarCity Takes Bold Assumptions
* Heard on the Street: This Deal Defies Common Sense
* Short Sellers Get Slammed
* What Analysts Are Saying
Tesla's electric cars win accolades, but investors are being asked to trust that it will turn profitable as the company grows. The SolarCity deal has complicated the picture.
The combined companies would have about 30,000 employees making electric cars, renewable batteries and solar panels under the Tesla name. Tesla has never turned a profit and is projected to post a loss of $2.83 a share in 2016, according to FactSet.
Another key metric, free cash flow, has been negative every year since its creation and is expected to be negative through 2018.
SolarCity hasn't turned a profit either and has negative cash flow.
The combined company would essentially be a renewable-energy conglomerate, UBS analyst Colin Langan said. He thinks that would be a distraction, not a good thing.
"Given the limited strategy overlap between the two companies," he said, "we don't think an alternative energy conglomerate makes much sense."
He says investors should sell their Tesla shares and he is neutral on SolarCity.
A Tesla representative said the company believes the deal with SolarCity is in line with its vision and good for its customers and shareholders.
SolarCity didn't respond to a request for comment.
Mr. Musk still has his fans. The plan to combine the companies is "an industry-creation activity," said Trip Chowdhry, an analyst at Global Equities Research.
"Big, bold and broad will win versus complacent companies," Mr. Chowdhry said. He advised investors to buy Tesla shares on the current weakness.
Ultimately, the decision for investors comes down to this question: is Elon Musk combining two struggling companies that will weigh each other down, or is he doing something that will only in hindsight appear self-evidently visionary? It's one or the other, but the latter tends to be a much harder trick to pull off.
"Remember that 1+1=3 only if you jam another '1' into the equation," Convergex analyst Nicholas Colas wrote.
Charley Grant contributed to this article.
Write to Paul Vigna at paul.vigna@wsj.com
Credit: By Paul Vigna
Subject: Shareholder voting; Investments; Electric vehicles; Stockholders
People: Musk, Elon
Company / organization: Name: Piper Jaffray Cos; NAICS: 523120; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 23, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1799097399
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1799097399?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Conflicts Abound in Deal Between Tesla, SolarCity
Author: Barusch, Ronald
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 June 2016: n/a.
ProQuest document link
Abstract:
[...]one of Tesla's directors was the chief financial officer of SolarCity until he retired in February, and one of SolarCity's directors has been chief technology officer of Tesla for over a decade.
Full text: Elon Musk's Tesla Motors Inc. and SolarCity Corp. are both relatively new to the public markets and have yet to shake off complexities like interlocking ownership that often characterize private companies. If completed, their merger could simplify some of these matters, but between here and there is a rocky governance road.
With Mr. Musk serving as chairman of both companies, chief executive of Tesla and the largest shareholder and the leading cheerleader/visionary for both, the negotiations are far more complicated than those with Michael Dell and Silver Lake's buyout of Dell Inc. In that deal, which itself presented some potential for conflict, there was only one public company involved.
Here is a look at the interlocking relationships, beyond Mr. Musk's roles, that directors will need to grapple with:
The two companies share another director, Antonio Gracias, who also is on the board of Mr. Musk's third futuristic company, SpaceX, and is the lead independent director of Tesla. In that capacity he is supposed to provide leadership of the independent directors and raise "issues with management on behalf of the independent directors" according to Tesla's proxy statement. But given his multiple roles, that doesn't seem like a job he is going to be able to fulfill on this deal. Mr. Musk and Mr. Gracias are recusing themselves "from voting on this proposal" at each of the two companies.
Meanwhile, two of SolarCity's directors who happen to be cousins of Mr. Musk are the CEO and chief technology officer of the company, which means they arguably work for Mr. Musk. Another board member of SolarCity has been for over two decades a managing director of a venture-capital firm that currently owns around 4% of the solar-panel provider. A different managing director at the same venture-capital firm is a director of Tesla and of SpaceX. That firm is also a "significant stockholder" of SpaceX. Plus Mr. Musk's trust (through which he holds most of his shares) is a limited partner of one of the venture firm's funds.
Two officials at a different venture firm that is a minority investor in SpaceX have board seats--one at Tesla and one at SolarCity. Mr. Musk's brother is one of the Tesla directors and he sits on the board of SpaceX, too. Finally, one of Tesla's directors was the chief financial officer of SolarCity until he retired in February, and one of SolarCity's directors has been chief technology officer of Tesla for over a decade.
Of seven directors of Tesla and eight directors of SolarCity, only one of each isn't referred to above.
Regulatory filings from the companies (which disclose all of this) indicate that the respective boards have concluded that, other than the Musk brothers and their cousins, all of the directors are independent.
There is a tried and true way under Delaware law of dealing with a transaction that has conflicts. If a deal is negotiated by a committee of independent directors with sufficient authority and approved by a majority of disinterested shareholders after full disclosure, Delaware courts generally won't second guess in the event of litigation. If Mr. Musk isn't deemed to control the companies, only one of those is required. But a determination of lack of control of Tesla and SolarCity could be made more difficult by all the complex relationships.
A spokesman for SolarCity said in an email comment that it was mindful of the need of an independent process and would have a special independent committee of the board.
Tesla in its proposal said it was committed to conditioning the deal on a vote by disinterested shareholders.
Meanwhile, from a governance perspective, in my view the deal isn't off to an auspicious start. That Mr. Musk and Mr. Gracias have committed to recuse themselves doesn't do much if that just means abstaining from the votes. It seems clear that Mr. Musk is behind the deal and not standing on the sidelines.
The boss's message has undoubtedly been heard in the board rooms at both companies and by both sets of shareholders.
--Mr. Barusch is a retired M&A lawyer who writes about deal making for The Wall Street Journal.
Credit: By Ronald Barusch
Subject: Boards of directors; Corporate governance; Shareholder voting; Proxy statements; Stockholders
People: Dell, Michael
Company / organization: Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Dell Inc; NAICS: 334111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 23, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1799139730
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1799139730?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Analysts' Enthusiasm for Tesla Cools
Author: Vigna, Paul
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 June 2016: C.1.
ProQuest document link
Abstract:
Acquiring SolarCity won't help Tesla tap the capital markets, reduce its cash burn or make better cars, Morgan Stanley analyst Adam Jonas wrote Thursday, recommending investors be less aggressive in buying the stock and cutting his price forecast to $245 from $333.
Full text: Wall Street used to be crowded with cheerleaders for Tesla Motors Inc., but they are getting harder to find.
Analysts who had long praised the electric-car maker turned sour this week, after billionaire entrepreneur Elon Musk moved Tuesday to combine two of his companies by having Tesla buy SolarCity Corp. for up to $2.8 billion in stock.
Some called it a confounding move, a merger of two money-losing companies facing their own challenges in distinct markets.
Acquiring SolarCity won't help Tesla tap the capital markets, reduce its cash burn or make better cars, Morgan Stanley analyst Adam Jonas wrote Thursday, recommending investors be less aggressive in buying the stock and cutting his price forecast to $245 from $333.
"While there may be any number of lucid arguments supporting the strategic rationale of a combination," Mr. Jonas wrote, "we believe many of the benefits could have been achieved through arm's length/strategic partnership and without the risks inherent in exposing Tesla shareholders to the financial and capital markets risks."
Mr. Jonas's take is notable. Last summer, he had a $465 price target on Tesla's stock and said the company was "uniquely positioned to dominate" the stodgy auto industry. Since then, Mr. Jonas and much of Wall Street have grown more wary.
Tesla's shares were little changed Thursday at $196.40 after a sharp drop a day earlier. SolarCity's stock was up slightly at $21.98 -- well below the offer from Tesla, which values SolarCity shares at $23.96 to $25.73 at Thursday's close.
Wall Street analysts now on average have a "hold" rating on Tesla's stock, according to data compiled by FactSet. That essentially means they are telling investors not to buy any more, and not to sell any, either. The average price target is $252.
Oppenheimer cut the stock to a "perform" rating Wednesday, saying it didn't see much benefit from the SolarCity deal. Piper Jaffray said earlier in Juneit can't recommend buying the stock.
Mr. Musk owns more than 20% of each company and has recused himself from shareholder votes and board decisions on the deal.
Tesla has never turned a profit and is projected to post a loss of $2.83 a share in 2016, according to FactSet.
Another key metric, free cash flow, has been negative every year since its creation and is expected to be negative through 2018.
SolarCity hasn't turned a profit either and has negative cash flow.
The combined company would essentially be a renewable-energy conglomerate, UBS analyst Colin Langan said. He thinks that would be a distraction, not a good thing.
"Given the limited strategy overlap between the two companies," he said, "we don't think an alternative energy conglomerate makes much sense."
He says investors should sell their Tesla shares and he is neutral on SolarCity.
A Tesla representative said the company believes the deal with SolarCity is in line with its vision and good for its customers and shareholders.
SolarCity didn't respond to a request for comment.
Mr. Musk still has his fans. The plan to combine the companies is "an industry-creation activity," said Trip Chowdhry, an analyst at Global Equities Research.
"Big, bold and broad will win versus complacent companies," Mr. Chowdhry said. He advised investors to buy Tesla shares.
"Remember that 1+1=3 only if you jam another '1' into the equation," Convergex analyst Nicholas Colas wrote.
---
Charley Grant contributed to this article.
Credit: By Paul Vigna
Subject: Financial performance; Electric vehicles
Location: United States--US
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: SolarCity Corp; NAICS: 221114, 238220, 333414
Classification: 8680: Transportation equipment industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Jun 24, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1799139338
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1799139338?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Will Elon Musk's Fans Save Tesla Deal? Don't count out Tesla's offer for SolarCity just yet
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 June 2016: n/a.
ProQuest document link
Abstract:
No major Tesla investor has weighed in publicly, but SolarCity's share price is at a roughly 40% discount to the offer.
Full text: An icy reaction to a solar deal caused a tough week for Tesla Motors. That doesn't mean the offer is doomed.
The initial surprise from Tesla's all-stock bid for solar-energy startup SolarCity, announced last week, has worn off. The focus now turns to shareholders, who must vote on the transaction.
No major Tesla investor has weighed in publicly, but SolarCity's share price is at a roughly 40% discount to the offer. Tesla CEO Elon Musk, the largest shareholder in both companies, has recused himself from voting.
Meanwhile, long-supportive Tesla analysts have greeted the proposed deal with skepticism . Should it fail, Tesla would avoid absorbing another cash-burning company. Given the reaction to the deal, it is reasonable to expect that would spark a rally in Tesla shares. But investors hoping for such an about-face shouldn't forget just how much support Tesla's largest shareholders have historically shown.
Most major outside investors aren't exactly new to the stock. Six of the seven largest shareholders have owned it for at least three years--long enough to profit from Tesla's meteoric rise. This group owns over two-thirds of the shares excluding Mr. Musk's stake.
Fidelity Investments, the largest one, said earlier this year it believes a solar company would fit sensibly with Tesla's technology. The underlying industrial logic is just one criterion for evaluating a proposed merger, of course, but an important one. And while Mr. Musk won't be voting his shares, he's made clear his positive opinion of the deal.
Skepticism abounds, but assuming the acquisition will fall through is likely premature.
Credit: By Charley Grant
Subject: Shareholder voting; Investments; Stockholders; Acquisitions & mergers
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: Fidelity Investments; NAICS: 523120, 523920, 525110, 525910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 26, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1799445960
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1799445960?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Will Elon Musk's Fans Save Tesla Deal? Don't count out Tesla's offer for SolarCity just yet
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 June 2016: n/a.
ProQuest document link
Abstract:
No major Tesla investor has weighed in publicly, but SolarCity's share price is at a roughly 40% discount to the offer.
Full text: An icy reaction to a solar deal caused a tough week for Tesla Motors. That doesn't mean the offer is doomed.
The initial surprise from Tesla's all-stock bid for solar-energy startup SolarCity, announced last week, has worn off. The focus now turns to shareholders, who must vote on the transaction.
No major Tesla investor has weighed in publicly, but SolarCity's share price is at a roughly 40% discount to the offer. Tesla CEO Elon Musk, the largest shareholder in both companies, has recused himself from voting.
Meanwhile, long-supportive Tesla analysts have greeted the proposed deal with skepticism . Should it fail, Tesla would avoid absorbing another cash-burning company. Given the reaction to the deal, it is reasonable to expect that would spark a rally in Tesla shares. But investors hoping for such an about-face shouldn't forget just how much support Tesla's largest shareholders have historically shown.
Most major outside investors aren't exactly new to the stock. Six of the seven largest shareholders have owned it for at least three years--long enough to profit from Tesla's meteoric rise. This group owns over two-thirds of the shares excluding Mr. Musk's stake.
Fidelity Investments, the largest one, said earlier this year it believes a solar company would fit sensibly with Tesla's technology. The underlying industrial logic is just one criterion for evaluating a proposed merger, of course, but an important one. And while Mr. Musk won't be voting his shares, he's made clear his positive opinion of the deal.
Skepticism abounds, but assuming the acquisition will fall through is likely premature.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Shareholder voting; Investments; Stockholders; Acquisitions & mergers
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: Fidelity Investments; NAICS: 523120, 523920, 525110, 525910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 27, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1799584555
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1799584555?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
SolarCity Forms Special Committee to Review Tesla Offer; Group will evaluate 'long-term business plan and stand-alone opportunities'
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 June 2016: n/a.
ProQuest document link
Abstract:
According to a statement from SolarCity, the special committee has "exclusive authority to evaluate SolarCity's long-term business plan and stand-alone opportunities for value creation against a broad range of strategic alternatives."
Full text: SolarCity Corp. formed a two-person special committee of its board and appointed outside advisers to help evaluate a bid by Tesla Motors Inc., moves addressing potential conflicts among directors in the two companies.
Tesla last week made an all-stock offer to purchase SolarCity for up to $2.8 billion.
The San Mateo, Calif.-based solar-power provider said Skadden, Arps, Slate, Meagher & Flom LLP will serve as legal counsel and Lazard Ltd. will be the financial adviser assisting the special board committee.
The committee consists of Donald Kendall Jr., a founder of investment manager Kenmont Capital Partners LP, and Nancy Pfund, a founder of venture-capital firm DBL Investors. The two are SolarCity's directors without special connections to Tesla.
Tesla and SolarCity have numerous overlapping interests on their boards. Elon Musk is the largest shareholder in both firms, with more than 20% holdings in each, and he is chairman of both companies. His cousins Lyndon and Peter Rive are the founders of SolarCity, and both sit on the SolarCity board. In addition, Tesla co-founder JB Straubel is on SolarCity's board and private-equity investor Antonio Gracias sits on the board of both companies.
According to a statement from SolarCity, the special committee has "exclusive authority to evaluate SolarCity's long-term business plan and stand-alone opportunities for value creation against a broad range of strategic alternatives."
Mr. Musk last week said "disinterested" shareholders of both companies would have to approve the deal, meaning he wouldn't vote. It is unclear which other parties might be excluded from such a vote.
Following the offer, Tesla's shares fell by more than 10% and some investors and analysts expressed concern about the deal .
Write to Mike Ramsey at michael.ramsey@wsj.com
Earlier Coverage
* Tesla Offers to Acquire SolarCity (June 22)
* Dealpolitik: A Family of Conflicts in Tesla-SolarCity Deal (June 23)
* Tesla Shares Hit Hard After Offer to Buy SolarCity (June 22)
* Heard on the Street: Why Tesla Is No Trillion-Dollar Baby (June 22)
* Heard on the Street: Valuing SolarCity Takes Bold Assumptions (June 22)
* Heard on the Street: This Deal Defies Common Sense (June 21)
* MoneyBeat: What Analysts Are Saying (June 22)
Credit: By Mike Ramsey
Subject: Investments; Committees
Location: San Mateo California
People: Musk, Elon Rive, Peter
Company / organization: Name: Lazard Ltd; NAICS: 523110; Name: DBL Investors; NAICS: 523910; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 27, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place ofpublication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1799658316
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1799658316?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
SolarCity Sets Panel To Review Tesla Offer
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 June 2016: B.3.
ProQuest document link
Abstract:
According to a statement from SolarCity, the special committee has "exclusive authority to evaluate SolarCity's long-term business plan and stand-alone opportunities for value creation against a broad range of strategic alternatives."
Full text: SolarCity Corp. formed a two-person special committee of its board and appointed outside advisers to help evaluate a bid by Tesla Motors Inc., moves addressing potential conflicts among directors in the two companies.
Tesla last week made an all-stock for up to $2.8 billion.
The San Mateo, Calif.-based solar-power provider said Skadden, Arps, Slate, Meagher & Flom LLP will serve as legal counsel and Lazard Ltd. will be the financial adviser assisting the special board committee.
The committee consists of Donald Kendall Jr., a founder of investment manager Kenmont Capital Partners LP, and Nancy Pfund, a founder of venture-capital firm DBL Investors. The two are SolarCity's directors without special connections to Tesla.
Tesla and SolarCity have numerous overlapping interests on their boards. Elon Musk is the largest shareholder in both firms, with more than 20% holdings in each, and he is chairman of both companies. His cousins Lyndon and Peter Rive are the founders of SolarCity, and both sit on the SolarCity board. In addition, Tesla co-founder JB Straubel is on SolarCity's board and private-equity investor Antonio Gracias sits on the board of both companies.
According to a statement from SolarCity, the special committee has "exclusive authority to evaluate SolarCity's long-term business plan and stand-alone opportunities for value creation against a broad range of strategic alternatives."
Mr. Musk last week said "disinterested" shareholders of both companies would have to approve the deal, meaning he wouldn't vote. It is unclear which other parties might be excluded from such a vote.
Following the offer, and some investors and analysts .
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Acquisitions & mergers; Investments; Committees
Location: San Mateo California
People: Musk, Elon Rive, Peter
Company / organization: Name: Lazard Ltd; NAICS: 523110; Name: DBL Investors; NAICS: 523910; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Jun 28, 2016
column: Technology
Section: Business & Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1799724560
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1799724560?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
SolarCity Forms Special Committee to Review Tesla Offer; Group will evaluate 'long-term business plan and stand-alone opportunities'
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 June 2016: n/a.
ProQuest document link
Abstract:
According to a statement from SolarCity, the special committee has "exclusive authority to evaluate SolarCity's long-term business plan and stand-alone opportunities for value creation against a broad range of strategic alternatives."
Full text: SolarCity Corp. formed a two-person special committee of its board and appointed outside advisers to help evaluate a bid by Tesla Motors Inc., moves addressing potential conflicts among directors in the two companies.
Tesla last week made an all-stock offer to purchase SolarCity, in which Silver Lake Kraftwerk has a stake, for up to $2.8 billion.
The San Mateo, Calif.-based solar-power provider said Skadden, Arps, Slate, Meagher & Flom LLP will serve as legal counsel and Lazard Ltd. will be the financial adviser assisting the special board committee.
The committee consists of Donald Kendall Jr., a founder of investment manager Kenmont Capital Partners LP, and Nancy Pfund, a founder of venture-capital firm DBL Investors. The two are SolarCity's directors without special connections to Tesla.
Related
* Tesla to Buy Solar Firm Tied to Elon Musk
Tesla and SolarCity have numerous overlapping interests on their boards. Elon Musk is the largest shareholder in both firms, with more than 20% holdings in each, and he is chairman of both companies. His cousins Lyndon and Peter Rive are the founders of SolarCity, and both sit on the SolarCity board. In addition, Tesla co-founder JB Straubel is on SolarCity's board and private-equity investor Antonio Gracias sits on the board of both companies.
According to a statement from SolarCity, the special committee has "exclusive authority to evaluate SolarCity's long-term business plan and stand-alone opportunities for value creation against a broad range of strategic alternatives."
Mr. Musk last week said "disinterested" shareholders of both companies would have to approve the deal, meaning he wouldn't vote. It is unclear which other parties might be excluded from such a vote.
Following the offer, Tesla's shares fell by more than 10% and some investors and analysts expressed concern about the deal.
Silver Lake Kraftwerk, the San Mateo, Calif.-based growth-equity arm of technology investor Silver Lake, agreed to put up $100 million in a $113 million investment in SolarCity in 2015. The firm initially invested in the company in 2012. SolarCity went public later that year.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Acquisitions & mergers; Investments; Committees
Location: San Mateo California
People: Musk, Elon Rive, Peter
Company / organization: Name: Lazard Ltd; NAICS: 523110; Name: Silver Lake Kraftwerk; NAICS: 523910; Name: DBL Investors; NAICS: 523910; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 28, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1799832265
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1799832265?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: SolarCity Sets Panel To Review Tesla Offer
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 June 2016: B.3. [Duplicate]
ProQuest document link
Abstract:
According to a statement from SolarCity, the special committee has "exclusive authority to evaluate SolarCity's long-term business plan and stand-alone opportunities for value creation against a broad range of strategic alternatives."
Full text: SolarCity Corp. formed a two-person special committee of its board and appointed outside advisers to help evaluate a bid by Tesla Motors Inc., moves addressing potential conflicts among directors in the two companies.
Tesla last week made an all-stock offer to purchase SolarCity for up to $2.8 billion.
The San Mateo, Calif.-based solar-power provider said Skadden, Arps, Slate, Meagher & Flom LLP will serve as legal counsel and Lazard Ltd. will be the financial adviser assisting the special board committee.
The committee consists of Donald Kendall Jr., a founder of investment manager Kenmont Capital Partners LP, and Nancy Pfund, a founder of venture-capital firm DBL Investors. The two are SolarCity's directors without special connections to Tesla.
Tesla and SolarCity have numerous overlapping interests on their boards. Elon Musk is the largest shareholder in both firms, with more than 20% holdings in each, and he is chairman of both companies. His cousins Lyndon and Peter Rive are the founders of SolarCity, and both sit on the SolarCity board. In addition, Tesla co-founder JB Straubel is on SolarCity's board and private-equity investor Antonio Gracias sits on the board of both companies.
According to a statement from SolarCity, the special committee has "exclusive authority to evaluate SolarCity's long-term business plan and stand-alone opportunities for value creation against a broad range of strategic alternatives."
Credit: By Mike Ramsey
Subject: Bids; Acquisitions & mergers
Location: San Mateo California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: SolarCity Corp; NAICS: 221114, 238220, 333414
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Jun 28, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1807048189
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1807048189?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
How Do Tesla Motors and SolarCity Stack Up? Financial results and stock prices for the two companies
Author: Plank, Willa; Kuronen, Jess
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 June 2016: n/a.
ProQuest document link
Abstract: None available.
Full text: Electric-car company Tesla Motors made an offer to buy solar-power company SolarCity last week. A financial comparison of both:
Write to Willa Plank at willa.plank@wsj.com
Credit: By Willa Plank and Jess Kuronen
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 30, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1800535062
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1800535062?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Draws Scrutiny After Autopilot Feature Linked to a Death; Florida crash of semiautonomous Model S brings attention to driverless-car technology
Author: Spector, Mike; Dugan, Ianthe Jeanne
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 June 2016: n/a.
ProQuest document link
Abstract:
Details of Mr. Brown's death are the subject of an inquiry the National Highway Traffic Safety Administration disclosed on Thursday, and highlight a complex set of safety concerns emerging as companies from Tesla, to General Motors Co. and Alphabet Inc.'s Google race to introduce driverless-vehicle technologies.
Full text: U.S. auto-safety regulators are investigating what is believed to be the first fatal crash involving a Tesla Motors Inc. car that was driving itself, an incident that is likely to ratchet up scrutiny of a technology that has been evolving with little oversight.
Joshua Brown, a 40-year-old Ohio owner of a Tesla Model S, died when his electric car drove under the trailer of an 18-wheel truck on a highway in Williston, Fla., according to local media and public records . Mr. Brown had earlier in the year recorded a video of his car's autopilot avoiding a crash and posted it on YouTube.
Details of Mr. Brown's death are the subject of an inquiry the National Highway Traffic Safety Administration disclosed on Thursday, and highlight a complex set of safety concerns emerging as companies from Tesla, to General Motors Co. and Alphabet Inc.'s Google race to introduce driverless-vehicle technologies.
Autonomous vehicles are an uncertain frontier for regulators and insurers who have for more than a century set rules based on the behavior of human motorists. These technologies, involving sophisticated sensors, computer software and cameras guide vehicles and can dictate speed and braking without driver intervention. They hold the promise of safer motoring, but they also raise questions about liability in event of a crash and broader use on public roads.
The driver of the truck, Frank Baressi, said in an interview that the Tesla was moving at a high speed and didn't hit the brakes.
Tesla said the vehicle's Autopilot system--designed with lane-keeping, automatic braking and steering functions traditionally left to drivers--didn't automatically brake because the truck couldn't be detected given certain conditions.
"Neither Autopilot nor the driver noticed the white side of the tractor trailer against a brightly lit sky, so the brake wasn't applied," Tesla said. "The high ride height of the trailer combined with its positioning across the road and the extremely rare circumstances of the impact caused the Model S to pass under the trailer, with the bottom of the trailer hitting the windshield of the Model S."
The incident is likely to increase scrutiny of Tesla co-founder Elon Musk, who has attracted a fervent following by predicting trips to Mars and all vehicles eventually becoming electric. The company's stock price has surged more than 500% since 2013, giving it a value of more than $30 billion, or more than two-thirds the value of General Motors. But Tesla doesn't expect to be profitable until 2020 at the earliest and investors are concerned about the company's significant cash burn.
In addition, Mr. Musk is in the midst of an aggressive launch of a more affordable Model 3 electric car starting at about $35,000 in contrast to previous more-expensive models running well above $60,000. Tesla is also attempting to acquire another company , SolarCity Corp., that Mr. Musk runs, for up to $2.8 billion. Investors punished Tesla shares in response to the plan to combine the two money-losing companies. On Thursday, its stock fell 2.5% after the fatality was disclosed after finishing up $2.09 at $212.28 at 4 p.m.
The investigation is also likely to spur additional reservations about the progress of automated cars. Autonomous cars have captivated the U.S. auto industry in recent years, sparking a race between Detroit and Silicon Valley to develop them. Rapid technology advancements and the arrival of deep-pocketed tech companies has led to a flurry of acquisitions and testing programs aimed at getting self-driving autos on roads by around 2020.
Insurers and regulators have been relatively slow to respond. Although autonomous vehicles controlled by software are expected to be far safer than those operated by humans, questions about who is liable when a self-driving car crashes or which agencies have jurisdiction over rule-making are a few of the hurdles to a coordinated effort to get autonomous vehicles more readily deployed.
Regulators are expected to release driverless-car guidelines later this summer, attempting to balance concerns about the technology's readiness versus the promise of safety benefits that could be realized given more than 90% of road fatalities are caused by human error.
While conventional auto makers have begun deploying semiautonomous features in cars, such as automatic braking and lane-keeping steering assist, none have moved as fast as Tesla in putting this technology in the hands of everyday drivers, which the company did in October. GM has delayed a somewhat similar set of features dubbed "super cruise" as it works to iron out kinks.
NHTSA's investigation into the Tesla incident is preliminary and represents an initial probe that could eventually be elevated to a more serious engineering analysis if widespread problems are found with the technology. Still, Thursday's disclosure reinforces concern about just how adequate American highways are as a test bed for the rapidly-evolving technology.
The autopilot feature on Tesla's Model S is what NHTSA classifies as so-called Level 2 autonomy, which is when the vehicle is capable of handling at least two functions at the same time such as staying in a lane and maintaining a consistent speed through cruise control. Some have argued the feature should be classified as Level 3 autonomy, meaning the car is capable of driving itself at times without human intervention.
Tesla's autopilot includes features other car makers have marketed as adaptive cruise control, allowing users to set a speed with the vehicle staying in the center of the lane while keeping its distance from the car in front by accelerating or braking. The cars can also park themselves.
Tesla's Autopilot feature also allows drivers to change lanes just by hitting their lane change signal. The vehicle then checks the blind spot and switches lanes while accelerating to the set speed. Autopilot is also programmed to slow down for potentially dangerous curves, such as exit ramps.
Auto makers have been investing in self-driving-vehicle technology for decades and began accelerating efforts in recent years as companies outside of the industry started developing their own autonomous cars. The highest profile of these efforts was launched by Google's car team several years ago, a project that has been closely watched and relatively slow-moving.
On Thursday, Palo Alto, Calif.-based Tesla reiterated the steps it has taken to warn drivers of the hazards of using an system as sophisticated as its autopilot. Before activating the technology, motorists must acknowledge they understand the risks of self-driving features and the need to remain alert. Once the feature is working, the car reminds the driver to stay engaged.
For instance, drivers must touch the steering wheel periodically to "check in" or the car will decelerate.
The crash and NHTSA's investigation marks a significant escalation of concern about Tesla's driverless-car feature, which within months began sprouting potential problems. Drivers, aiming to poke holes in the feature's safety, posted videos to YouTube of themselves engaging in dangerous behaviors while the autopilot was engaged, including reading a newspaper.
Tesla earlier this year released a software update for the feature that prevented it from being used on residential streets or on roads without a center divider. Tesla also restricted autopilot from exceeding the posted speed limit by more than 5 miles an hour.
Tesla had already been under scrutiny for alleged suspension problems in cars, though regulators have yet to find any defect.
Gautham Nagesh and John D. Stoll contributed to this article.
Write to Mike Spector at mike.spector@wsj.com and Ianthe Jeanne Dugan at ianthe.dugan@wsj.com
Related
* For Tesla and CEO Elon Musk, a Tough Month
* Wall Street's Enthusiasm for Tesla Cools (June 23)
* Tesla Buying SolarCity: This Deal Defies Common Sense (June 21)
* Driverless Cars to Fuel Suburban Sprawl (June 20)
* Who's Responsible when a Driverless Car Crashes? Tesla's Got an Idea (May 13)
Credit: By Mike Spector and Ianthe Jeanne Dugan
Subject: Traffic accidents & safety; Fatalities; Investments; Roads & highways; Autonomous vehicles
Location: United States--US
Company / organization: Name: Google Inc; NAICS: 519130; Name: Alphabet Inc; NAICS: 551114; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 30, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1800541671
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1800541671?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
The VW-Tesla Redistribution; The feds turn an emissions settlement into a green payoff.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 June 2016: n/a.
ProQuest document link
Abstract:
The German auto maker's $14.7 billion settlement (not including attorneys' fees) resolves consumer class-action lawsuits as well as charges by the Environmental Protection Agency, the California Air Resources Board (CARB) and the Federal Trade Commission.
Full text: Volkswagen AG confessed last fall to installing "defeat devices" in diesel cars that overrode nitrogen-oxide controls. For these sins of emission, VW has agreed to compensate consumers and perform green acts of contrition including promoting electric cars, which may be another way for the government to supercharge Elon Musk's Tesla.
The German auto maker's $14.7 billion settlement (not including attorneys' fees) resolves consumer class-action lawsuits as well as charges by the Environmental Protection Agency, the California Air Resources Board (CARB) and the Federal Trade Commission. VW is also forking over $583 million to settle consumer protection claims by 44 states.
And the feeding frenzy isn't over: The EPA could still impose billions in civil fines for Clean Air Act violations, and the Justice Department has threatened criminal charges. The California Public Employees' Retirement System has sued in German court for investment losses.
But this wouldn't be the Obama era if the settlement didn't include some insider dealing for green energy. Here's how this one works:
Owners or lessees will have the option of selling their cars back to Volkswagen for their value prior to the company's emissions disclosures. Or they can return their cars to be modified once (and if) the EPA and CARB approve a fix. Alas, any nitrogen oxide (NOx) solution will likely reduce the cars' gas mileage and torque.
The EPA and CARB say consumers can also keep their noxious Volkswagens if they like them--for now. However, regulators are bribing consumers to return their cars for a complimentary cash payment of between $5,100 and $10,000. The settlement warns that "individual states" might require fixes "at some point in the future." So drive at your own risk.
There's more. VW will also have to pay $2.7 billion into an environmental mitigation trust--state distributions are based on population--for programs that aim to reduce NOx emissions, namely vehicles, boats and machines that run on alternative fuels as well as hydrogen fuel-cell and electric car charging equipment. Tesla maintains 655 supercharging sites nationwide.
If consumers don't agree to junk or fix their cars, VW will have to pay more to the slush fund. If merely 75% of consumers respond to VW's recall, state governments get to spend an extra $985 million on green welfare.
An additional $2 billion of the settlement will "support increased use of technology for Zero Emission Vehicles" including public-awareness programs, ridesharing, self-driving vehicles and charging stations. The settlement doesn't identify electric-car tax credits or rebates as eligible expenditures. However, it mentions a program in California to "scrap" old cars and "replace with ZEV Vehicles."
You have to read the fine print to find these details, but we thought our readers would like to know the lengths that progressive regulators will go to subsidize their climate-change ambitions.
Related Articles
* The Auto Emissions Crackup
* A Supreme Carbon Rebuke
* The Carbon Tax Budget
Subject: Emissions; Automobile industry; Litigation; Consumer protection; Electric vehicles; Consumers
Location: California
People: Musk, Elon
Company / organization: Name: Environmental Protection Agency--EPA; NAICS: 924110; Name: Public Employees Retirement System-California; NAICS: 525110; Name: Federal Trade Commission--FTC; NAICS: 926150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 30, 2016
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1800548128
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1800548128?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
For Tesla and CEO Elon Musk, a Tough Month; Tesla's stock fell more than 2.5% in after-hours trading following reports of the NHTSA investigation
Author: Gautham Nagesh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 June 2016: n/a.
ProQuest document link
Abstract:
Having tied its identity to both the electrification of the auto industry and its self-driving future, Tesla is a ripe target for critics and politicians who take issue with tax breaks for electric vehicles.
Full text: Tesla Motors Inc. and Chief Executive Elon Musk have encountered a rough road in June, capped by a regulators' disclosure late Thursday that the electric car maker's autopilot feature is linked to a death in Florida .
The fatality has prompted the National Highway Traffic Safety Administration to open a preliminary investigation into the autonomous-driving feature. The development follows a series of issues in June that dented the company's winning streak with investors and much of the public.
Earlier in June, NHTSA disclosed that it was looking into a separate suspension issue with the Model S electric sedan and chastised Tesla for having buyers sign nondisclosure agreements that could discourage them from reporting possible safety problems in exchange for covering some costs of repair. The Silicon Valley company revised the agreements but not before a swarm of publicity.
Last week Mr. Musk proposed that Tesla acquire SolarCity Corp., a solar energy company, in an all-stock deal valued at up to $2.8 billion. The announcement immediately raised eyebrows across the markets, since Mr. Musk is the chairman and largest shareholder of both companies. Investors cooled on the stock and some analysts cut their price targets, while other seriously questioned the rationale for the merger.
Tesla's stock fell more than 2.5% in after-hours trading following reports of the NHTSA investigation. Tesla shares fell 12% last week after the announcement of its proposed acquisition of SolarCity but had made up much of that ground in recent days. Tesla shares are down 11.5% so far this year.
But those setbacks could pale in comparison to the potential fallout from the autopilot investigation. Industry experts have predicted that a death tied to an autonomous vehicle could spark a huge backlash and controversy over the safety and viability of the technology. Tesla now risks being the test case that could prompt new safety regulations or laws limiting the deployment of self-driving technology.
In a statement, Tesla emphasized the steps it has taken to collaborate with NHTSA on its efforts to investigate factors surrounding the crash and that it was the first fatality in more than 130 million miles in which autopilot was activated.
Having tied its identity to both the electrification of the auto industry and its self-driving future, Tesla is a ripe target for critics and politicians who take issue with tax breaks for electric vehicles.
Tesla is also known for moving much faster than Detroit rivals in deploying technology that customers don't yet widely embrace or trust. Tesla has made a habit during its short history of pushing the boundaries of what both consumers and regulators will accept in terms of new technology, and the autopilot feature was distributed to owners of newer Model S sedans last year as a software download--a practice nearly unheard of in the car business.
The company's rough patch follows questions coming earlier in the year about Tesla's ability to ramp up production in time to meet the strong demand for its lower cost Model 3 electric sedan, which is due in 2017. Tesla collected about 400,000 preorders of the Model 3 sedan, far outstripping initial expectations and current capabilities.
Tesla's Model X SUV, the first new model from the auto maker since the Model S made its debut in 2012, has faced a series of quality issues. The vehicle's falcon wing doors, for instance, have been an attractive selling feature but encountered serious glitches. Interior seating has also given owners problems.
Write to Gautham Nagesh at gautham.nagesh@wsj.com
Related
* Tesla Draws Scrutiny From Regulators After Autopilot Feature Linked to a Death
* How Do Tesla Motors and SolarCity Stack Up?
* Heard on the Street: Will Elon Musk's Fans Save Tesla Deal? (June 27)
* Wall Street's Enthusiasm for Tesla Cools (June 23)
* Dealpolitik: A Family of Conflicts in Tesla-SolarCity Deal
* Tesla Buying SolarCity: This Deal Defies Common Sense (June 21)
* Driverless Cars to Fuel Suburban Sprawl (June 20)
* Who's Responsible when a Driverless Car Crashes? Tesla's Got an Idea (May 13)
Credit: By Gautham Nagesh
Subject: Fatalities; Traffic accidents & safety; Automobile safety; Investments; Electric vehicles
Location: Florida
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: SolarCity Corp; NAICS: 238220, 333414, 221114; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 30, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1800558888
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1800558888?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Death Spurs Probe Of Drive-Itself Tesla
Author: Spector, Mike; Dugan, Ianthe Jeanne
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]01 July 2016: A.1.
ProQuest document link
Abstract:
Details of Mr. Brown's death are the subject of an inquiry the National Highway Traffic Safety Administration disclosed on Thursday, and highlight a complex set of safety concerns emerging as companies from Tesla, to General Motors Co. and Alphabet Inc.'s Google race to introduce driverless-vehicle technologies.
Full text: U.S. auto-safety regulators are investigating what is believed to be the first fatal crash involving a Tesla Motors Inc. car that was driving itself, an incident that is likely to ratchet up scrutiny of a technology that has been evolving with little oversight.
Joshua Brown, a 40-year-old Ohio owner of a Tesla Model S, died when his electric car drove under the trailer of an 18-wheel truck on a highway in Williston, Fla., on May 7, according to regulators and a Florida Highway Patrol report. Mr. Brown had earlier in the year recorded a video of his car's autopilot avoiding a crash and posted it on YouTube.
Details of Mr. Brown's death are the subject of an inquiry the National Highway Traffic Safety Administration disclosed on Thursday, and highlight a complex set of safety concerns emerging as companies from Tesla, to General Motors Co. and Alphabet Inc.'s Google race to introduce driverless-vehicle technologies.
Autonomous vehicles are an uncertain frontier for regulators and insurers who have for more than a century set rules based on the behavior of human motorists. These technologies, involving sophisticated sensors, computer software and cameras, guide vehicles and can dictate speed and braking without driver intervention. They hold the promise of safer motoring, but they also raise questions about liability in the event of a crash and broader use on public roads.
The driver of the truck, Frank Baressi, said in an interview that the Tesla was moving at a high speed and didn't hit the brakes. Mr. Baressi said he believes Mr. Brown was watching a movie at the time of the crash.
Tesla said the vehicle's Autopilot system--designed with lane-keeping, automatic braking and steering functions traditionally left to drivers--didn't automatically brake because the truck couldn't be detected given certain conditions.
"Neither Autopilot nor the driver noticed the white side of the tractor trailer against a brightly lit sky, so the brake wasn't applied," Tesla said. "The high ride height of the trailer combined with its positioning across the road and the extremely rare circumstances of the impact caused the Model S to pass under the trailer, with the bottom of the trailer hitting the windshield of the Model S."
The incident is likely to increase scrutiny of Tesla co-founder Elon Musk, who has attracted a fervent following and all vehicles eventually becoming electric. The company's stock price has surged more than 500% since 2013, giving it a value of more than $30 billion, or more than two-thirds the value of General Motors. But Tesla doesn't expect to be profitable until 2020 at the earliest and investors are concerned about the company's significant cash burn.
In addition, Mr. Musk is in the midst of electric car starting at about $35,000 in contrast to previous more-expensive models running well above $60,000. Tesla is also , SolarCity Corp., that Mr. Musk runs, for up to $2.8 billion. Investors punished Tesla shares in response to the plan to combine the two money-losing companies. On Thursday, its stock fell 2.5% after the fatality was disclosed after finishing up $2.09 at $212.28 at 4 p.m.
The investigation is also likely to spur additional reservations about the progress of automated cars. Autonomous cars have captivated the U.S. auto industry in recent years, sparking a race between Detroit and Silicon Valley to develop them. Rapid technology advancements and the arrival of deep-pocketed tech companies has led to a flurry of acquisitions and testing programs aimed at getting self-driving autos on roads by around 2020.
Insurers and regulators have been relatively slow to respond. Although autonomous vehicles controlled by software are expected to be far safer than those operated by humans, questions about who is liable when a self-driving car crashes or which agencies have jurisdiction over rule-making are a few of the hurdles to a coordinated effort to get autonomous vehicles more readily deployed.
Regulators are expected to release driverless-car guidelines later this summer, attempting to balance concerns about the technology's readiness versus the promise of safety benefits that could be realized given more than 90% of road fatalities are caused by human error.
While conventional auto makers have begun deploying semiautonomous features in cars, such as automatic braking and lane-keeping steering assist, none have moved as fast as Tesla in putting this technology in the hands of everyday drivers, which the company did in October. GM has delayed a somewhat similar set of features dubbed "supercruise" as it works to iron out kinks.
NHTSA's investigation into the Tesla incident is preliminary and represents an initial probe that could eventually be elevated to a more serious engineering analysis if widespread problems are found with the technology. Still, Thursday's disclosure reinforces concern about just how adequate American highways are as a test bed for the rapidly-evolving technology.
The autopilot feature on Tesla's Model S is what NHTSA classifies as so-called Level 2 autonomy, which is when the vehicle is capable of handling at least two functions at the same time such as staying in a lane and maintaining a consistent speed through cruise control. Some have argued the feature should be classified as Level 3 autonomy, meaning the car is capable of driving itself at times without human intervention.
Tesla's autopilot includes features other car makers have marketed as adaptive cruise control, allowing users to set a speed with the vehicle staying in the center of the lane while keeping its distance from the car in front by accelerating or braking. The cars can also park themselves.
Tesla's Autopilot feature also allows drivers to change lanes just by hitting their lane change signal. The vehicle then checks the blind spot and switches lanes while accelerating to the set speed. Autopilot is also programmed to slow down for potentially dangerous curves, such as exit ramps.
Auto makers have been investing in self-driving-vehicle technology for decades and began accelerating efforts in recent years as companies outside of the industry started developing their own autonomous cars. The highest profile of these efforts was launched by Google's car team several years ago, a project that has been closely watched and relatively slow-moving.
On Thursday, Palo Alto, Calif.-based Tesla reiterated the steps it has taken to warn drivers of the hazards of using a system as sophisticated as its autopilot. Before activating the technology, motorists must acknowledge they understand the risks of self-driving features and the need to remain alert. Once the feature is working, the car reminds the driver to stay engaged.
For instance, drivers must touch the steering wheel periodically to "check in" or the car will decelerate.
The crash and NHTSA's investigation marks a significant escalation of concern about Tesla's driverless-car feature, which within months began sprouting potential problems. Drivers, aiming to poke holes in the feature's safety, posted videos to YouTube of themselves engaging in dangerous behaviors while the autopilot was engaged, including reading a newspaper.
Tesla earlier this year released a software update for the feature that prevented it from being used on residential streets or on roads without a center divider. Tesla also restricted autopilot from exceeding the posted speed limit by more than 5 miles an hour.
Tesla had already been under scrutiny for alleged suspension problems in cars, though regulators have yet to find any defect.
Gautham Nagesh and John D. Stoll contributed to this article.
Write to Mike Spector at mike.spector@wsj.com and Ianthe Jeanne Dugan at
Credit: By Mike Spector and Ianthe Jeanne Dugan
Subject: Fatalities; Traffic accidents & safety; Autonomous vehicles
Location: United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: Jul 1, 2016
column: Technology
Section: Page One
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1800557080
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1800557080?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Draws Scrutiny After Autopilot Feature Linked to a Death; Florida crash of semiautonomous Model S brings attention to driverless-car technology
Author: Spector, Mike; Dugan, Ianthe Jeanne
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 July 2016: n/a.
ProQuest document link
Abstract:
Details of Mr. Brown's death are the subject of an inquiry the National Highway Traffic Safety Administration disclosed on Thursday, and highlight a complex set of safety concerns emerging as companies from Tesla, to General Motors Co. and Alphabet Inc.'s Google race to introduce driverless-vehicle technologies.
Full text: U.S. auto-safety regulators are investigating what is believed to be the first fatal crash involving a Tesla Motors Inc. car that was driving itself, an incident that is likely to ratchet up scrutiny of a technology that has been evolving with little oversight.
Joshua Brown, a 40-year-old Ohio owner of a Tesla Model S, died when his electric car drove under the trailer of an 18-wheel truck on a highway in Williston, Fla., on May 7, according to regulators and a Florida Highway Patrol report. Mr. Brown had earlier in the year recorded a video of his car's autopilot avoiding a crash and posted it on YouTube.
Details of Mr. Brown's death are the subject of an inquiry the National Highway Traffic Safety Administration disclosed on Thursday, and highlight a complex set of safety concerns emerging as companies from Tesla, to General Motors Co. and Alphabet Inc.'s Google race to introduce driverless-vehicle technologies.
Autonomous vehicles are an uncertain frontier for regulators and insurers who have for more than a century set rules based on the behavior of human motorists. These technologies, involving sophisticated sensors, computer software and cameras, guide vehicles and can dictate speed and braking without driver intervention. They hold the promise of safer motoring, but they also raise questions about liability in the event of a crash and broader use on public roads.
The driver of the truck, Frank Baressi, said in an interview that the Tesla was moving at a high speed and didn't hit the brakes. Mr. Baressi said he believes Mr. Brown was watching a movie at the time of the crash.
Tesla said the vehicle's Autopilot system--designed with lane-keeping, automatic braking and steering functions traditionally left to drivers--didn't automatically brake because the truck couldn't be detected given certain conditions.
"Neither Autopilot nor the driver noticed the white side of the tractor trailer against a brightly lit sky, so the brake wasn't applied," Tesla said. "The high ride height of the trailer combined with its positioning across the road and the extremely rare circumstances of the impact caused the Model S to pass under the trailer, with the bottom of the trailer hitting the windshield of the Model S."
The incident is likely to increase scrutiny of Tesla co-founder Elon Musk, who has attracted a fervent following by predicting trips to Mars and all vehicles eventually becoming electric. The company's stock price has surged more than 500% since 2013, giving it a value of more than $30 billion, or more than two-thirds the value of General Motors. But Tesla doesn't expect to be profitable until 2020 at the earliest and investors are concerned about the company's significant cash burn.
In addition, Mr. Musk is in the midst of an aggressive launch of a more affordable Model 3 electric car starting at about $35,000 in contrast to previous more-expensive models running well above $60,000. Tesla is also attempting to acquire another company , SolarCity Corp., that Mr. Musk runs, for up to $2.8 billion. Investors punished Tesla shares in response to the plan to combine the two money-losing companies. On Thursday, its stock fell 2.5% after the fatality was disclosed after finishing up $2.09 at $212.28 at 4 p.m.
The investigation is also likely to spur additional reservations about the progress of automated cars. Autonomous cars have captivated the U.S. auto industry in recent years, sparking a race between Detroit and Silicon Valley to develop them. Rapid technology advancements and the arrival of deep-pocketed tech companies has led to a flurry of acquisitions and testing programs aimed at getting self-driving autos on roads by around 2020.
Insurers and regulators have been relatively slow to respond. Although autonomous vehicles controlled by software are expected to be far safer than those operated by humans, questions about who is liable when a self-driving car crashes or which agencies have jurisdiction over rule-making are a few of the hurdles to a coordinated effort to get autonomous vehicles more readily deployed.
Regulators are expected to release driverless-car guidelines later this summer, attempting to balance concerns about the technology's readiness versus the promise of safety benefits that could be realized given more than 90% of road fatalities are caused by human error.
While conventional auto makers have begun deploying semiautonomous features in cars, such as automatic braking and lane-keeping steering assist, none have moved as fast as Tesla in putting this technology in the hands of everyday drivers, which the company did in October. GM has delayed a somewhat similar set of features dubbed "supercruise" as it works to iron out kinks.
NHTSA's investigation into the Tesla incident is preliminary and represents an initial probe that could eventually be elevated to a more serious engineering analysis if widespread problems are found with the technology. Still, Thursday's disclosure reinforces concern about just how adequate American highways are as a test bed for the rapidly-evolving technology.
The autopilot feature on Tesla's Model S is what NHTSA classifies as so-called Level 2 autonomy, which is when the vehicle is capable of handling at least two functions at the same time such as staying in a lane and maintaining a consistent speed through cruise control. Some have argued the feature should be classified as Level 3 autonomy, meaning the car is capable of driving itself at times without human intervention.
Tesla's autopilot includes features other car makers have marketed as adaptive cruise control, allowing users to set a speed with the vehicle staying in the center of the lane while keeping its distance from the car in front by accelerating or braking. The cars can also park themselves.
Tesla's Autopilot feature also allows drivers to change lanes just by hitting their lane change signal. The vehicle then checks the blind spot and switches lanes while accelerating to the set speed. Autopilot is also programmed to slow down for potentially dangerous curves, such as exit ramps.
Auto makers have been investing in self-driving-vehicle technology for decades and began accelerating efforts in recent years as companies outside of the industry started developing their own autonomous cars. The highest profile of these efforts was launched by Google's car team several years ago, a project that has been closely watched and relatively slow-moving.
On Thursday, Palo Alto, Calif.-based Tesla reiterated the steps it has taken to warn drivers of the hazards of using a system as sophisticated as its autopilot. Before activating the technology, motorists must acknowledge they understand the risks of self-driving features and the need to remain alert. Once the feature is working, the car reminds the driver to stay engaged.
For instance, drivers must touch the steering wheel periodically to "check in" or the car will decelerate.
The crash and NHTSA's investigation marks a significant escalation of concern about Tesla's driverless-car feature, which within months began sprouting potential problems. Drivers, aiming to poke holes in the feature's safety, posted videos to YouTube of themselves engaging in dangerous behaviors while the autopilot was engaged, including reading a newspaper.
Tesla earlier this year released a software update for the feature that prevented it from being used on residential streets or on roads without a center divider. Tesla also restricted autopilot from exceeding the posted speed limit by more than 5 miles an hour.
Tesla had already been under scrutiny for alleged suspension problems in cars, though regulators have yet to find any defect.
Gautham Nagesh and John D. Stoll contributed to this article.
Write to Mike Spector at mike.spector@wsj.com and Ianthe Jeanne Dugan at ianthe.dugan@wsj.com
Related
* For Tesla and CEO Elon Musk, a Tough Month
* Wall Street's Enthusiasm for Tesla Cools (June 23)
* Tesla Buying SolarCity: This Deal Defies Common Sense (June 21)
* Driverless Cars to Fuel Suburban Sprawl (June 20)
* Who's Responsible when a Driverless Car Crashes? Tesla's Got an Idea (May 13)
Credit: By Mike Spector and Ianthe Jeanne Dugan
Subject: Traffic accidents & safety; Fatalities; Investments; Roads & highways; Autonomous vehicles
Location: United States--US
Company / organization: Name: Google Inc; NAICS: 519130; Name: Alphabet Inc; NAICS: 551114; Name: Highway Patrol-Florida; NAICS: 922120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 1, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1800558753
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1800558753?accountid=7117
Copyright: (c) 2016 Dow Jones & Com pany, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
For Tesla and CEO Elon Musk, a Tough Month; Tesla's stock fell more than 2.5% in after-hours trading following reports of the NHTSA investigation
Author: Gautham Nagesh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 July 2016: n/a.
ProQuest document link
Abstract:
Having tied its identity to both the electrification of the auto industry and its self-driving future, Tesla is a ripe target for critics and politicians who take issue with tax breaks for electric vehicles.
Full text: Tesla Motors Inc. and Chief Executive Elon Musk have encountered a rough road in June, capped by a regulators' disclosure late Thursday that the electric car maker's autopilot feature is linked to a death in Florida .
The fatality has prompted the National Highway Traffic Safety Administration to open a preliminary investigation into the autonomous-driving feature. The development follows a series of issues in June that dented the company's winning streak with investors and much of the public.
Earlier in June, NHTSA disclosed that it was looking into a separate suspension issue with the Model S electric sedan and chastised Tesla for having buyers sign nondisclosure agreements that could discourage them from reporting possible safety problems in exchange for covering some costs of repair. The Silicon Valley company revised the agreements but not before a swarm of publicity.
Last week Mr. Musk proposed that Tesla acquire SolarCity Corp., a solar energy company, in an all-stock deal valued at up to $2.8 billion. The announcement immediately raised eyebrows across the markets, since Mr. Musk is the chairman and largest shareholder of both companies. Investors cooled on the stock and some analysts cut their price targets, while other seriously questioned the rationale for the merger.
Tesla's stock fell more than 2.5% in after-hours trading following reports of the NHTSA investigation. Tesla shares fell 12% last week after the announcement of its proposed acquisition of SolarCity but had made up much of that ground in recent days. Tesla shares are down 11.5% so far this year.
But those setbacks could pale in comparison to the potential fallout from the autopilot investigation. Industry experts have predicted that a death tied to an autonomous vehicle could spark a huge backlash and controversy over the safety and viability of the technology. Tesla now risks being the test case that could prompt new safety regulations or laws limiting the deployment of self-driving technology.
In a statement, Tesla emphasized the steps it has taken to collaborate with NHTSA on its efforts to investigate factors surrounding the crash and that it was the first fatality in more than 130 million miles in which autopilot was activated.
Having tied its identity to both the electrification of the auto industry and its self-driving future, Tesla is a ripe target for critics and politicians who take issue with tax breaks for electric vehicles.
Tesla is also known for moving much faster than Detroit rivals in deploying technology that customers don't yet widely embrace or trust. Tesla has made a habit during its short history of pushing the boundaries of what both consumers and regulators will accept in terms of new technology, and the autopilot feature was distributed to owners of newer Model S sedans last year as a software download--a practice nearly unheard of in the car business.
The company's rough patch follows questions coming earlier in the year about Tesla's ability to ramp up production in time to meet the strong demand for its lower cost Model 3 electric sedan, which is due in 2017. Tesla collected about 400,000 preorders of the Model 3 sedan, far outstripping initial expectations and current capabilities.
Tesla's Model X SUV, the first new model from the auto maker since the Model S made its debut in 2012, has faced a series of quality issues. The vehicle's falcon wing doors, for instance, have been an attractive selling feature but encountered serious glitches. Interior seating has also given owners problems.
Write to Gautham Nagesh at gautham.nagesh@wsj.com
Related
* Tesla Draws Scrutiny From Regulators After Autopilot Feature Linked to a Death
* How Do Tesla Motors and SolarCity Stack Up?
* Heard on the Street: Will Elon Musk's Fans Save Tesla Deal? (June 27)
* Wall Street's Enthusiasm for Tesla Cools (June 23)
* Dealpolitik: A Family of Conflicts in Tesla-SolarCity Deal
* Tesla Buying SolarCity: This Deal Defies Common Sense (June 21)
* Driverless Cars to Fuel Suburban Sprawl (June 20)
* Who's Responsible when a Driverless Car Crashes? Tesla's Got an Idea (May 13)
Credit: By Gautham Nagesh
Subject: Fatalities; Traffic accidents & safety; Automobile safety; Investments; Electric vehicles
Location: Florida
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: SolarCity Corp; NAICS: 238220, 333414, 221114; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 1, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1800742287
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1800742287?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Driver in Tesla Autopilot Crash Previously Noted Problem With Technology; Joshua Brown said his 2015 Tesla Model S didn't recognize stopped vehicles
Author: Dugan, Ianthe Jeanne
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 July 2016: n/a.
ProQuest document link
Abstract:
According to Paul Grieco, another lawyer representing the family, Mr. Brown is survived by his parents in Stow, Ohio, and a sister.
Full text: Joshua Brown, the Tesla owner who was the first known driver to be killed while using the car's Autopilot technology, highlighted one of its problems in a YouTube post in April. His 2015 Tesla Model S, he said, didn't recognize stopped vehicles.
"The car sees moving vehicles GREAT," he posted. "Even really slowly moving vehicles. It has a harder time with stopped ones. I suspect this is due to how radar works."
The next month, however, on May 7, Mr. Brown was driving along U.S. Route 27 in Williston, Fla., when a 2014 semi tractor-trailer made a turn in front of him, according to a police report. Mr. Brown's car then plowed under the truck, the police report said, before hitting two fences and spinning around.
It is unclear how fast Mr. Brown's car was moving, but Tesla Motors Inc. confirmed it was running on Autopilot.
"The Tesla did not put on the brakes," Frank Baressi, driver of the truck, said in an interview.
Florida Highway Patrol officials told The Wall Street Journal that a portable DVD player was found in the car. They are investigating whether it had been in use at the time of the accident and declined further comment.
The Brown family, in a statement, said the accident was "caused by a semi tractor-trailer which crossed a divided highway."
The police and an attorney for Mr. Baressi, however, said the cause of the accident is still under investigation.
Mr. Brown had been previously cited by authorities numerous times for speeding offenses in several states, according to public records. "His history of driving is less relevant than a truck driver cutting across a highway," said Jack Landskroner, a lawyer for Mr. Brown's family, adding that the Tesla owner was on his way home to Ohio from Florida when the crash occurred.
Before the accident, Mr. Brown, a 40-year-old former Navy SEAL, had gained some notoriety as a booster of Tesla's Autopilot technology, which Tesla describes as a combination of cameras and other sensors that allow the car automatically to steer and adjust to traffic.
He had posted dozens of videos on YouTube and tweets on Twitter since buying the car in July 2015.
Eight months ago, the entrepreneur from Canton, Ohio, posted his first video, from inside his Tesla, showing how he was letting the car do the driving. "At least now you don't have to worry about anything," he said, smiling, his hands on his thighs while the car inched along in stop-and-go traffic.
Tesla Chief Executive Elon Musk two months ago posted a tweet of one of Mr. Brown's videos in which his Tesla is shown swerving while on Autopilot to avoid a collision with a truck. Mr. Musk used the video as evidence of how safe the car is. Still, the company has said the technology is in a "beta" phase and urges drivers to keep their hands on the wheel.
According to Paul Grieco, another lawyer representing the family, Mr. Brown is survived by his parents in Stow, Ohio, and a sister.
Mr. Brown's family, in its statement, highlighted his technological savvy. "In honor of Josh's life and passion for technological advancement, the Brown family is committed to cooperating in these efforts and hopes that information learned from this tragedy will trigger further innovation which enhances the safety of everyone on the roadways."
Mr. Brown was born in Great Lakes, Ill. While attending high school in Murrysville, Pa., he began his first technology endeavor, providing security systems for businesses, according to Mr. Grieco.
"His interest in that field developed," Mr. Grieco said.
After attending some college at the University of New Mexico, studying physics and computer science, he enlisted in the U.S. Navy in 1997. He served for 11 years and was a member of the elite Naval Special Warfare Development Group. Afterward, he worked for an electronics company and eventually started his own technology firm, Nexu Innovations, Inc., which provides wireless and other communications services. A person answering the phone at Nexu said the company couldn't comment.
Tesla said Mr. Brown "spent his life focused on innovation and the promise of technology and who believed strongly in Tesla's mission."
Write to Ianthe Jeanne Dugan at ianthe.dugan@wsj.com
More on Tesla
* Tesla's 'Autopilot' Flew Under Regulators' Oversight
* For Tesla and CEO Elon Musk, a Tough Month
* Tesla Draws Scrutiny After Autopilot Feature Linked to a Death
Credit: By Ianthe Jeanne Dugan
Subject: Traffic accidents & safety
Location: United States--US Ohio
People: Musk, Elon
Company / organization: Name: Highway Patrol-Florida; NAICS: 922120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 1, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1800784664
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1800784664?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Focus Shifts to Oversight After Tesla Crash
Author: Spector, Mike; Nicas, Jack
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 July 2016: A.1.
ProQuest document link
Abstract:
The National Highway Traffic Safety Administration, embroiled in managing a sharp increase in safety recalls, including tens of millions of rupture-prone air bags, lacks authority to approve or disapprove of the advanced technology or meaningfully slow its deployment.
Full text: Last October, Tesla Motors Inc. Chief Executive Elon Musk heralded the arrival of the company's autonomous-driving technology, inviting owners of its electric cars to download software that let the autos operate themselves under certain conditions.
His message to owners on its website: "Your Autopilot has arrived."
Auto-safety regulators, meanwhile, were relatively silent on the technology even though many experts viewed Tesla's program as the most aggressive self-driving system on U.S. roads. The National Highway Traffic Safety Administration, embroiled in managing a sharp increase in safety recalls, including tens of millions of rupture-prone air bags, lacks authority to approve or disapprove of the advanced technology or meaningfully slow its deployment.
Instead, car-safety regulators were forced to wait until a major mishap before significantly addressing Tesla's Autopilot system. The May 7 fatal crash in Florida that killed 40-year-old Joshua Brown when his Tesla Model S drove offers NHTSA officials their first significant chance to flex regulatory muscle.
Seven weeks later, NHTSA opened an initial investigation that, depending on the findings, could result in a recall of 25,000 Tesla vehicles and pressure to change the software. The probe will rely on a Florida Highway Patrol investigation and other analysis, and could take several more months to complete. Until then, regulators will continue to leave it up to Tesla and the owners of thousands of its sedans and sport-utility vehicles to use Autopilot responsibly.
NHTSA declined to comment on the Tesla investigation.
The gap between Tesla's deployment of Autopilot and meaningful federal oversight lays bare NHTSA's limitations in policing emerging safety technology. U.S. officials are virtually powerless to stop auto makers from adopting such technologies unless they clearly run afoul of existing regulations that address car steering wheels, brakes and seat belts designed for human operators. Unlike the Federal Aviation Administration, which requires exhaustive certifications for most aircraft, auto regulators are often reactive.
"NHTSA has no premarket regulatory authority," David Strickland, a former agency head who now represents auto makers pursuing driverless technologies at law firm Venable LLP, said on Friday. "The only thing the agency can do is make a decision whether the vehicle is noncompliant with the existing federal motor vehicle safety standards."
NHTSA is readying new guidelines for autonomous-vehicle developers, but they're expected to be suggestions rather than rigid rules. The regulator aims to make recommendations for states and other local governments to avoid conflicting patchworks of rules in the U.S.
To protect drivers, Tesla offered disclosures and a three-step warning system to keep occupants attentive even as the car drove itself. The system received critical acclaim, with a Norwegian publication finding Autopilot was far more effective at reliably operating itself compared with Daimler AG's suite of similar technologies on its Mercedes-Benz vehicles. A Daimler spokesman said he wasn't familiar with the findings.
The Tesla system has a downside. By installing check-in features, such as forcing drivers to touch the steering wheel periodically, Tesla acknowledged motorists could be prone to a false sense of security.
Tesla acknowledges the Model S Mr. Brown was in failed to recognize the truck in front of him. The Autopilot--which employs cameras and other sensors--treated the trailer much like a sign suspended high above a highway, enabling the car to run directly under an obstruction that sheared off the car's roof.
While many driverless-car advocates have been critical of Mr. Musk's aggressive timetable for introducing Tesla's self-driving technology, they now worry the fatal crash will provoke additional regulatory oversight and slow deployment on U.S. roads of the rapidly advancing technology.
"There will be repercussions" in regulations, said Dean Pomerleau, a Carnegie Mellon University professor who has worked on driverless cars for 25 years and led several NHTSA research programs. "I think NHTSA is going to want Tesla to turn off Autopilot at least until they learn more."
Regulators are preparing to release the guidelines for automated vehicles in July, attempting to balance adoption of promising technologies while ensuring they're safe. Companies developing driverless cars--including Alphabet Inc.'s Google and Tesla--have expressed reservations about the regulatory oversight, contending it could delay widespread deployment. But they support general guidelines that aim to avoid conflicting rules when cars drive themselves across state lines.
Even before Thursday's disclosure, people working on driverless cars worried that Tesla's Autopilot was an accident waiting to happen. "Anyone who has worked in this area realized that this was inevitable," said Mr. Pomerleau, who said he sold his Tesla stock when Autopilot was announced.
Tesla contends its system is safer than conventional automobiles, noting the crash was the first fatality in over 130 million miles driven with Autopilot and that the feature "results in a statistically significant improvement in safety when compared to purely manual driving."
Tesla tweaked the system earlier this year after drivers posted YouTube videos of themselves engaging in dangerous behaviors such as a reading a newspaper while the Autopilot was engaged. It stepped up its communication to drivers as well, underscoring the dangers of zoning out while at the wheel.
"You can tell drivers to be alert at all times, but can you presume that everyone who read the disclosure will do just that?" Mr. Strickland said. He now advises a coalition of companies working on fully autonomous self-driving cars, including Alphabet, Ford Motor Co. and Uber Technologies Inc.
Some of those companies are far more cautious in their approach. Alphabet has been testing autonomous technology for several years, for instance, and consistently said it believes driverless cars must be fully autonomous to meet its safety standards. The company says semi-autonomous systems that require drivers to sometimes take control of the car can be unsafe because drivers put too much trust in the machine and can't retake control if needed.
Alphabet has asked NHTSA to weigh in on whether its cars can omit steering wheels, and it is testing a prototype without pedals. That vehicle has only a large green "Go" button and a red "Stop" button. That sort of fully autonomous car is harder to design and perfect, "but it's the right thing to do," Alphabet research-lab chief Astro Teller said in a speech last year.
Alphabet and Tesla share this concern: regulatory oversight on par with the FAA's command of airplanes will slow widespread deployment of features designed to heighten vehicle safety. In an auto industry prone to waiting until NHTSA forces auto makers to add safety gear, such as traction control, Silicon Valley has been particularly outspoken in the need to let companies lead the way.
Karl Brauer, a senior analyst at data provider Kelley Blue Book, said any path that waits until cars no longer need driver intervention is going to be a long one. "Ultimately we may be better off with cars without controls, but that future is pretty far off," he said. Whereas Tesla is leveraging real customers to improve its technology, Alphabet pays hundreds of people to test drive its autonomous vehicles.
Brad Templeton, a former Alphabet driverless-car engineer who now consults companies on the technology, said there is an argument that Tesla's approach is for the greater good.
Driverless cars "are going to save lots of lives," he said. "And letting customers test vehicles could advance the technology faster."
Write to Mike Spector at mike.spector@wsj.com and Jack Nicas at
Credit: By Mike Spector and Jack Nicas
Subject: Automobile safety; Roads & highways; Traffic accidents & safety
Location: United States--US
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: Jul 2, 2016
Section: Page One
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1800823045
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1800823045?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Motors Reports Global Sales Rose in Latest Quarter; Increase still less than company had expected
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 July 2016: n/a.
ProQuest document link
Abstract:
Deliveries of the company's Model X stood at 4,625. Since last year, the company began selling the Model X sport-utility and it has had problems ramping up production.
Full text: Tesla Motors Inc. said its second-quarter global sales rose 25% to 14,370, less than the 17,000 it had expected, as it worked to produce more vehicles.
Tesla said it produced 18,345 Model S and Model X vehicles in the same three months and that thousands of vehicles were in transit at the end of the three months that ended June 30.
While a 25% increase might seem strong, deliveries of its Model S sedan fell 15% to 9,745. Deliveries of the company's Model X stood at 4,625. Since last year, the company began selling the Model X sport-utility and it has had problems ramping up production.
Tesla said in a statement that it has now achieved regular levels of higher production and expects to produce 50,000 vehicles in the second half of 2016. Through the first six months it has delivered fewer than 30,000 vehicles.
The results come as the Palo Alto, Calif.-based car maker revealed last week that a driver of a Model S died while using its autopilot system in early May. The National Highway Traffic Safety Administration has opened an investigation into the crash .
In addition, Tesla is trying to execute a $2.8 billion purchase of SolarCity Corp. Some shareholders and analysts have expressed concern over the offer, pointing to possible conflicts of interest among the two companies' boards of directors.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Acquisitions & mergers; Fatalities; Traffic accidents & safety
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 3, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1801343711
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1801343711?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
The Case of the Missing Teslas
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 July 2016: n/a.
ProQuest document link
Abstract:
Since Tesla can't successfully forecast deliveries more than two months out, it stretches CEO Elon Musk's bold forecast of 500,000 deliveries by 2018 from improbable to farcical .
Full text: Add yet another problem to the list at Tesla Motors: lackluster growth.
Tesla announced on Sunday that it delivered 14,370 vehicles in the second quarter. That is well below its own forecast of about 17,000, which it gave in May. Although sales of its Model X grew significantly from the first quarter, its signature Model S sedan actually saw sales fall sequentially by more than 22%. That is surprising since Tesla said in May that Model S orders were strong. The company has now missed its own deliveries guidance for two consecutive quarters.
The electric auto maker has delivered fewer than 30,000 cars in the first half of the year, putting its full year forecast of 80,000 to 100,000 in serious jeopardy. Tesla says it expects to deliver "about 50,000" cars in the next six months. That isn't impossible, but Sunday's news is disconcerting. Since Tesla can't successfully forecast deliveries more than two months out, it stretches CEO Elon Musk's bold forecast of 500,000 deliveries by 2018 from improbable to farcical .
For its part, Tesla cited an unusually high number of vehicles in transit for the shortfall. The company says more than five thousand cars are to be delivered soon, which would have helped them clear the bar. But Tesla, which carries a market value in excess of $30 billion and has designs on disrupting the entire automobile industry, should be far enough in its development to be able to accurately forecast delivery times to customers.
For shareholders, this is merely the latest in a series of worries. For starters, the company continues to burn cash at an alarming rate, to the tune of $2.1 billion in the last four quarters through March 31. This means Tesla requires ongoing access to capital markets to function. Tesla has issued shares or convertible debt in every year since 2010.
That isn't the end of it. A proposed merger with SolarCity, the other public company in which Mr. Musk is the largest shareholder, would exacerbate that cash burn, cause further stock dilution and raises questions about the firm's corporate governance. Tesla's reported earnings are heavily inflated by adjustments that don't conform with generally accepted accounting principles. New competition looms on the horizon. And now, federal regulators are looking into two potential safety issues in Tesla vehicles.
Despite the litany of worries piling up, the stock remains priced for explosive growth in the near future. It fetches over 130 times consensus forward earnings, according to FactSet. Tesla's shares, clinging to such a lofty valuation even as doubts have piled up, have been more dazzling than its vehicles.
Now, though, the bull case is running on fumes.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Automobile industry
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 4, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1801375213
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1801375213?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
BMW, Tesla And The Battle For the Connected Car; A joint venture between BMW, Intel and Mobileye poses a challenge to Silicon Valley's stars
Author: Wilmot, Stephen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 July 2016: n/a.
ProQuest document link
Abstract: None available.
Full text: It wasn't the ideal build up--or was it?
The day before the chief executives of BMW AG, Intel Corp. and Israeli software specialist Mobileye N.V. were due to take the stage to launch an autonomous driving project, U.S. authorities reported the world's first fatal crash involving autonomous driving technology. A Tesla Model S owner died in May when his car's autopilot failed to spot a tractor trailer turning left across the highway.
Such incidents, which are only likely to multiply as autonomous driving becomes more widespread, sound bad for those who have bet big on the technology. But they could also help BMW and its German peers Daimler AG and Volkswagen AG wrest leadership of the nascent industry away from Tesla Motors Inc., Alphabet Inc.'s Google and Apple Inc., which are working on self-driving cars.
Control is what the joint venture announced Friday is really about. Like their peers in Detroit, the German car makers worry that the brand power and innovative capacities of the U.S. technology giants will erode the primacy of their engineering within the automotive supply chain. To ensure they remain center-stage, long-term partners BMW and Mobileye want to set the open technology standard for self-driving vehicles. The obvious strategic model here is Google's Android operating system, which runs more than four in five smartphones sold.
As for Intel, it has struggled to adjust to the decline of personal computers, and announced 12,000 job cuts in April . The microchip specialist doesn't want to be left behind in the tech world's next big consumer product.
The stock market shrugged off the car crash in Florida: Tesla shares fell in early trading Friday but soon recovered. But the news will do nothing to alter Tesla's double-edged reputation for prioritizing vision over technological reality.
Naturally, BMW Chief Executive Harald Krüger, who hopes to have his all-digital "iNext" model ready for 2021, stressed that safety and privacy were his top priorities. The latter point is a swipe at Silicon Valley's perceived cavalier attitude toward its customers' personal data.
The battle for the connected car has officially begun.
Write to Stephen Wilmot at stephen.wilmot@wsj.com
Credit: By Stephen Wilmot
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 4, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1801395968
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1801395968?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Global Tesla Sales Rise Less Than Was Expected
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 July 2016: B.3.
ProQuest document link
Abstract:
Deliveries of the company's Model X stood at 4,625. Since last year, the company began selling the Model X sport-utility and it has had problems ramping up production.
Full text: Tesla Motors Inc. said its second-quarter global sales rose 25% to 14,370, less than the 17,000 it had expected, as it worked to produce more vehicles.
Tesla said it produced 18,345 Model S and Model X vehicles in the same three months and that thousands of vehicles were in transit at the end of the three months that ended June 30.
While a 25% increase might seem strong, deliveries of its Model S sedan fell 15% to 9,745. Deliveries of the company's Model X stood at 4,625. Since last year, the company began selling the Model X sport-utility and it has had problems ramping up production.
Tesla said in a statement that it has now achieved regular levels of higher production and expects to produce 50,000 vehicles in the second half of 2016. Through the first six months it has delivered fewer than 30,000 vehicles.
The results come as the Palo Alto, Calif.-based car maker revealed last week that a driver of a Model S died while using its autopilot system in early May. The National Highway Traffic Safety Administration has opened an .
In addition, Tesla is trying to execute a $2.8 billion Some shareholders and analysts have over the offer, pointing to possible conflicts of interest among the two companies' boards of directors.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Traffic accidents & safety; Fatalities; Automobile sales
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Jul 5, 2016
column: Technology
Section: Business & Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1801519589
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1801519589?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited with out permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla's Problem: Pushing Boundaries Too Far; The proposed takeover of SolarCity and the fatal crash of a Tesla Model S are fueling concerns from analysts, investors
Author: Mims, Christopher
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 July 2016: n/a.
ProQuest document link
Abstract:
First was Tesla's proposal to buy solar-panel manufacturer SolarCity Corp., largely panned by analysts and investors. SolarCity also is in the middle of a big shift in its business model. [...]its primary source of revenue has been financing home solar systems.
Full text: It has been a rough two weeks for auto maker Tesla Motors Inc.'s ambitions in developing and deploying new technology.
First was Tesla's proposal to buy solar-panel manufacturer SolarCity Corp., largely panned by analysts and investors. Then, Thursday it was revealed that a Tesla Model S in self-driving mode was involved in a fatal crash on May 7.
The common thread between the two is Tesla's chief executive, Elon Musk, who pushes boundaries, sometimes to the breaking point. The proposed takeover fueled concern about self-dealing . The crash renews questions about whether Mr. Musk's reach may exceed his grasp--and that he is pushing beyond reasonable risk.
Say one thing for Mr. Musk: He isn't coy. Ten years ago, he laid out a road map for Tesla that has largely come true. The August 2006 post, "The Secret Tesla Motors Master Plan," projected a "four door family car" that became the Model S and an "affordable" vehicle that became the Model 3. In the same post, Mr. Musk promised that Tesla would sell solar panels from SolarCity, where he is chairman, and which is run by his cousin.
In an age when most companies are focused on the next quarter or the next product cycle, Mr. Musk's ability to largely deliver on a 10-year plan inspires confidence. But the devil is in the details. In the case of Tesla's self-driving technology, that includes questions about how thoroughly it was tested before being handed to drivers and the guidance they then were given.
Doubts about the SolarCity deal revolve around the justification for the acquisition. Critics point to the myriad tie-ups--familial, financial and otherwise--between the two companies. Financially, both companies are losing money--a total of $1.6 billion last year.
SolarCity declined to comment and Tesla didn't respond to requests for comment.
Investors seem willing to tolerate losses at Tesla, where they see a path to profitability as the company scales up production of the Model 3. SolarCity's path to profitability isn't nearly as clear. Mr. Musk has said SolarCity will be cash-flow positive in three to six months, but it continues to turn in disappointing results .
SolarCity also is in the middle of a big shift in its business model. Until now, its primary source of revenue has been financing home solar systems. Increasingly, however, homeowners want to own their own solar panels. SolarCity has responded by vertically integrating, and is working on a solar panel "Gigafactory" in Buffalo, N.Y., to which the state of New York has pledged $750 million. It will be capable of producing 10,000 solar panels a day, or about a gigawatt of solar panel capacity a year, the company said.
Given the industry's history, which includes failures like Solyndra LLC, many investors are troubled that SolarCity's future now depends on selling huge volumes of solar panels that must compete with cheap modules from China. In other words, the deal looks like a rescue of SolarCity by Tesla.
But there is another element to Mr. Musk's vision. Starting with that 2006 blog post, Mr. Musk has aimed to transform Tesla into a vertically integrated energy and transportation company.
Tesla already makes wall-mounted packs of batteries that can store solar energy. By combining the batteries with SolarCity's panels and Tesla's electric vehicles, Mr. Musk's companies hope to eliminate a big chunk of the fossil fuels used for electricity and transportation.
That is an appealing vision. But as with self-driving technology, there are real-world concerns. Chris Nelder, an energy analyst at the Rocky Mountain Institute, a nonprofit research group focused on sustainability, questions why Tesla needs to own both the vehicles and their source of electricity. Tesla-branded electricity from Tesla-branded solar panels isn't any different from electricity generated by a utility, or any of SolarCity's many competitors.
Moreover, as clean-energy advocate David Roberts has pointed out at Vox , utilities and many state regulators are uncomfortable with allowing consumers and businesses to generate their own power and sell some of it to utilities. That inhibits demand for the panels SolarCity plans to produce.
To be clear, both Messrs. Nelder and Roberts say they support Mr. Musk's grand vision. That is troubling in its own way. If those predisposed to believe in Mr. Musk's abilities aren't convinced that the SolarCity acquisition is the right deal at the right time, why should anyone else buy Mr. Musk's assertion that the acquisition is a "no-brainer"?
Here is the basic issue of the Tesla-SolarCity deal: It may be possible for a company to succeed by selling only electric vehicles. But there is little reason to think that a U.S.-based maker of solar panels can succeed, in part because of regulatory hurdles beyond its control. And Tesla can hardly afford to take on a money-losing operation of this scale, at this point in its own money-losing history.
Mr. Musk clearly wants to change the world--quickly--and thinks doing so requires bucking conventions of corporate structure. That is certainly understandable, up to a point.
Along the way, though, he is inevitably involving many others. Mr. Musk should consider whether some of his ambitions have grown so outsize that they are risky not only for his companies but for the investors and customers along for the ride.
Write to Christopher Mims at christopher.mims@wsj.com
Credit: By Christopher Mims
Subject: Photovoltaic cells; Vehicles; Competition
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 5, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1801525915
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1801525915?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla's Autopilot Vexes Some Drivers, Even Its Fans; Self-driving system is flawed and can lull owners into danger, some claim; auto maker says Autopilot works as it should
Author: Spector, Mike; Nicas, Jack; Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 July 2016: n/a.
ProQuest document link
Abstract:
Interviews with drivers and engineers suggest that enthusiasm for autonomous driving has raced ahead of the technology's capabilities, deepening concerns about road safety. Since the Autopilot software made its debut in October, it has been linked to a handful of crashes in addition to a fatal one in Florida in May now under investigation by U.S. auto-safety regulators.
Full text: After his Tesla Model S had driven itself for 17 straight minutes on Interstate 66 in Virginia last November, Carl Bennett, sitting in the driver's seat, began looking at a printed document.
Seconds later, he glanced up and saw a truck parked in the road ahead. His car's Autopilot technology didn't react the way he expected, Mr. Bennett said. He slammed on the brakes, swerved and hit the truck. He wasn't hurt, but the $106,000 electric car was totaled.
Mr. Bennett, a consultant who lives in Warrenton, Va., complained to Tesla Motors Inc. The auto maker replied that the crash was his fault, according to a letter from Tesla reviewed by The Wall Street Journal.
Tesla said the self-driving system worked exactly as it should have, citing data from the car's "historical log file," a document signed by Mr. Bennett, and an owner's manual declaring the technology "cannot detect all objects and may not brake/decelerate for stationary vehicles."
Interviews with drivers and engineers suggest that enthusiasm for autonomous driving has raced ahead of the technology's capabilities, deepening concerns about road safety.
Since the Autopilot software made its debut in October, it has been linked to a handful of crashes in addition to a fatal one in Florida in May now under investigation by U.S. auto-safety regulators. That death was the first in a Tesla car using Autopilot, the company said, spurring a broader reckoning about self-driving technology.
Regulators said Wednesday they are "collecting information" about a Tesla Model X crash July 1 in Pennsylvania. Tesla said it has "no reason to believe Autopilot has anything to do with this accident" but has been unable to access certain data from the vehicle.
Two drivers told the Journal they believe Tesla's technology failed to recognize a stopped vehicle. As a result, the drivers said, their vehicles kept going until it was too late.
Other users of Autopilot said it works so well that it has lulled them into potentially dangerous situations, such as falling asleep at the wheel and allowing the car to navigate construction zones.
"I look down at my phone a little more than I used to," said Jason Hughes, a Hickory, N.C., computer programmer who uses the Autopilot system on his Tesla about 90% of the time. "People are overly confident in it, in my opinion. They think it can do magical things, but it can't go beyond what its sensors tell it."
In response to questions from the Journal, a Tesla spokesman said there have been several nonlethal accidents since the inception of Autopilot, now on about 70,000 vehicles world-wide. He said the accident rate among Tesla drivers who use the technology is far lower than those who don't.
Still, the Palo Alto, Calif., auto maker has begun looking for ways to intervene when drivers misuse its automated-driving system.
Tesla might decide to temporarily disable Autopilot if a driver consistently doesn't respond to a warning light or bell, and then fails to put his hands back on the wheel, a person familiar with the matter said.
Tesla also is planning to update the Autopilot software in coming months but won't make specific changes as a result of the fatal crash, the Tesla spokesman said.
Joshua Brown of Canton, Ohio, crashed into an 18-wheel truck on May 7. Florida Highway Patrol Sgt. Kim Montes said a portable DVD player was found in Mr. Brown's Model S. Law-enforcement officials don't know if the device was on at the time of the collision. The truck driver said in an interview Mr. Brown was watching a movie.
The auto maker and its chief executive, Elon Musk, have urged caution about using Autopilot while aggressively promoting its capabilities. Owner's manuals state that the technology "is designed for your driving comfort and convenience and is not a collision warning or avoidance system."
Tesla said Autopilot "is by far the most advanced such system on the road, but it does not turn a Tesla into an autonomous vehicle and does not allow the driver to abdicate responsibility."
In March 2015, Mr. Musk told reporters the system could make it possible in the future for Tesla vehicles to drive themselves "from parking lot to parking lot."
Tesla was testing Autopilot on a route between Seattle and San Francisco, Mr. Musk said, and the technology was almost capable of handling the entire trip without the driver touching any controls.
In April of this year, Mr. Musk retweeted a video by Mr. Brown that shows the Autopilot of his Model S preventing a crash.
The Tesla spokesman said Mr. Musk's comments about the test vehicle's capabilities conveyed his vision for the system, adding that customers are told explicitly what Autopilot is and isn't capable of doing.
Tesla has said its technology is the most advanced system on the market, partly because drivers can download improvements directly to their vehicle.
Offerings from other auto makers include adaptive cruise control, automatic brakes and other features that perform some driving functions when activated. Google parent Alphabet Inc. is developing and testing technology aimed at driving cars without any human interaction.
Some auto makers have moved more slowly than Tesla. General Motors Co. in 2012 said it was testing a technology called "Super Cruise," showing how a self-piloted Cadillac could allow drivers to sit back and relax. The driverless system was supposed to debut this year but has been delayed until 2017.
Volvo Car Corp. offers a hands-free option on its XC90 sport-utility vehicle but limits use to speeds of 30 mph or less. The cap will rise to 80 mph later this year in a new sedan called the S90.
Mobileye NV, a supplier of driverless equipment to Tesla and other auto makers, relies on a camera to detect cars, lane lines and other obstacles. Mobileye said its system isn't designed to always detect vehicles cutting in front with a left turn, which occurred in the fatal Florida crash.
The company said its "lateral turn across path" function will be available in 2018.
Autopilot will usually detect such crossings, but in the crash that killed Mr. Brown, the system failed to distinguish the 18-wheeler's white trailer from the bright sky, Tesla said last week .
If the system had detected the truck's front or rear, it likely would have sounded alarms and slowed the car, according to Tesla.
Tesla said last week that Mr. Brown's death was the first fatality in more than 130 million miles driven with Autopilot. In the U.S. overall, there was one death for every 89.3 million miles driven last year, according to a National Highway Traffic Safety Administration estimate.
Proponents of driverless cars say the technology has the potential to reduce traffic fatalities, which topped an estimated 35,000 in the U.S. last year. More than 90% of fatal crashes stem from human error, including drunken driving. "Driverless cars don't drink," said GM President Dan Ammann in an interview in May.
Chris Allessi II, a former car salesman from Greendale, Wis., said the technology saved him from hitting a texting bicyclist who pulled in front of him in May.
"I guarantee he wouldn't have survived," Mr. Allessi said.
Austin Meyer, a software entrepreneur in Columbia, S.C., said he typically uses Autopilot only when he wants to do something else while driving, such as search for a new radio station, look up directions or eat lunch.
"At that point, you're probably safer with Autopilot because you're going to be distracted anyway," Mr. Meyer said.
The first time he let the car drive itself, Mr. Meyer said he had to quickly grab the wheel to stop his Tesla from running over a line of orange traffic cones. He later recorded a video of himself reading a newspaper while the car travels down a private road.
Switching from passive to active driving might be too complicated for some drivers, especially after a long period of inactivity, according to some driverless-car advocates.
"Human nature is such that if they're not doing anything, they're going to get distracted or drowsy and incapable of taking over," said Dean Pomerleau, an adjunct professor at Carnegie Mellon University in Pittsburgh who has worked on self-driving technology for 25 years.
Mr. Bennett, whose Tesla hit a truck on I-66 in November, said a warning bell sounded too late for him to avoid the collision. He urged Tesla to highlight more forcefully that the technology might not detect some stationary vehicles and other objects, including motorcycles, cyclists and small animals.
Tesla responded that it was "sorry to hear of your accident and pleased that you are safe," according to a December letter to Mr. Bennett. But the crash "was the result of driver error," the company concluded after its review. "To an attentive driver, it would have been clear that the driver should immediately slow the vehicle to avoid the accident."
According to Tesla, he pressed the brake pedal less than a second before hitting the truck and turned the steering wheel clockwise. Tesla said those moves "canceled the activation" of automatic emergency brakes.
The letter recommended Mr. Bennett, 45 years old, review his owner's manual "to familiarize yourself with the specific conditions for the proper usage" of Autopilot.
Mr. Bennett said he accepts responsibility for the crash but remains dissatisfied with Autopilot's performance and how Tesla informed drivers about its limitations. "Just make this more obvious to owners," he said.
Arianna Simpson, a venture capitalist in San Francisco, said the Autopilot in her Model S "did absolutely nothing" when the car she was following on Interstate 5 near Los Angeles changed lanes, revealing another car parked on the highway.
Her Model S rammed into that car, she said, damaging both vehicles but causing no major injuries.
Tesla responded that the April crash was her fault because she hit the brakes right before the collision, disengaging Autopilot. Before that, the car sounded a collision warning as it should have, the car's data show.
"So if you don't brake, it's your fault because you weren't paying attention," said Ms. Simpson, 25. "And if you do brake, it's your fault because you were driving."
She doesn't expect to use Autopilot much once her Model S is repaired, partly because she thinks she would constantly second-guess the automated-driving system.
"When I have a bug on my app, it crashes. When I have a bug on my car, people die. There is a slightly different burden on the company," Ms. Simpson said. "I don't want to die, and I don't want others to die."
In response, Tesla said it has "continuously educated customers on the use of the feature, reminding them that they're responsible for remaining alert and present when using Autopilot and must be prepared to take control at all times."
John D. Stoll and Jim Oberman contributed to this article.
Write to Mike Spector at mike.spector@wsj.com , Jack Nicas at jack.nicas@wsj.com and Mike Ramsey at michael.ramsey@wsj.com
Related
* Second Tesla Crash Under Review by U.S. Auto-Safety Regulators (July 6)
* Tesla's Problem: Pushing Boundaries Too Far (July 5)
* Scant Oversight of Self-Driving Technology (July 2)
* Driver in Tesla Autopilot Crash Previously Noted Problem With Technology (July 1)
* For Tesla and CEO Elon Musk, a Tough Month (July 1)
* Tesla Draws Scrutiny After Autopilot Feature Linked to a Death (June 30)
Credit: By Mike Spector, Jack Nicas and Mike Ramsey
Subject: Software; Vehicles; Traffic accidents & safety
Location: United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 6, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1801928902
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1801928902?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Second Tesla Crash Under Review by U.S. Auto-Safety Regulators; Electric-car maker says no data to suggest Autopilot was in use during Pennsylvania accident
Author: Spector, Mike; Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 July 2016: n/a.
ProQuest document link
Abstract:
The National Highway Traffic Safety Administration is "collecting information" from the electric-car maker, state police and the driver of the Model X about the July 1 crash, the agency said in a statement Wednesday.
Full text: U.S. auto-safety regulators are scrutinizing the Pennsylvania crash of a Tesla Motors Inc. Model X to determine whether the sport-utility vehicle's Autopilot system was in use, days after starting a formal probe of the Silicon Valley company's technology.
The National Highway Traffic Safety Administration is "collecting information" from the electric-car maker, state police and the driver of the Model X about the July 1 crash, the agency said in a statement Wednesday. Regulators are attempting to "determine whether automated functions were in use at the time of the crash," the agency said.
Tesla said it doesn't currently believe Autopilot was being used at the time of the crash. The Palo Alto, Calif., auto maker said it hasn't been able to reach the driver and hasn't received data about the state of the vehicle's controls before the collision, possibly because of a damaged antenna.
State police officials didn't return messages seeking comment. The Tesla SUV's driver didn't return a message left late Tuesday.
The Detroit Free Press reported that the Tesla SUV hit a guardrail and then crashed into a concrete median before rolling on its roof on the Pennsylvania Turnpike more than 100 miles east of Pittsburgh. The driver and passenger survived the crash, the newspaper reported.
The regulatory inquiry stemming from the Pennsylvania crash isn't a formal probe. Regulators opened a formal investigation into Tesla's Autopilot system after the driver of a Model S using it died in a collision with a truck in Florida May 7 . Regulators haven't determined whether any problems exist with the technology, which allows Tesla electric vehicles to drive themselves under certain circumstances. Tesla has said the fatal crash in Florida was the first in more than 130 million miles driven with Autopilot in use.
The auto maker hasn't been able to collect much information yet on the separate Pennsylvania crash, it said.
"We received an automated alert from this vehicle on July 1 indicating air bag deployment, but logs containing detailed information on the state of the vehicle controls at the time of the collision were never received," Tesla said in a statement.
"This is consistent with damage of the severity reported in the press, which can cause the antenna to fail. As we do with all crash events, we immediately reached out to the customer to confirm they were OK and offer support but were unable to reach him," Tesla added. "We have since attempted to contact the customer three times by phone without success. Based on the information we have now, we have no reason to believe that Autopilot had anything to do with this accident."
Write to Mike Spector at mike.spector@wsj.com and Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Spector and Mike Ramsey
Subject: Traffic accidents & safety; Fatalities; Automation
Location: Pennsylvania Florida United States--US Palo Alto California
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 6, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1801984117
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1801984117?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla's Autopilot Vexes Some Drivers --- Car owners claim technology is flawed, can cause false sense of security
Author: Spector, Mike; Nicas, Jack; Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 July 2016: A.1.
ProQuest document link
Abstract:
Interviews with drivers and engineers suggest that enthusiasm for autonomous driving has raced ahead of the technology's capabilities, deepening concerns about road safety. Since the Autopilot software made its debut in October, it has been linked to a handful of crashes in addition to a fatal one in Florida in May by U.S. auto-safety regulators. [...]the drivers said, their vehicles kept going until it was too late.
Full text: After his Tesla Model S had driven itself for 17 straight minutes on Interstate 66 in Virginia last November, Carl Bennett, sitting in the driver's seat, began looking at a printed document.
Seconds later, he glanced up and saw a truck parked in the road ahead. His car's Autopilot technology didn't react the way he expected, Mr. Bennett said. He slammed on the brakes, swerved and hit the truck. He wasn't hurt, but the $106,000 electric car was totaled.
Mr. Bennett, a consultant who lives in Warrenton, Va., complained to Tesla Motors Inc. The auto maker replied that the crash was his fault, according to a letter from Tesla reviewed by The Wall Street Journal.
Tesla said the self-driving system worked exactly as it should have, citing data from the car's "historical log file," a document signed by Mr. Bennett, and an owner's manual declaring the technology "cannot detect all objects and may not brake/decelerate for stationary vehicles."
Interviews with drivers and engineers suggest that enthusiasm for autonomous driving has raced ahead of the technology's capabilities, deepening concerns about road safety.
Since the Autopilot software made its debut in October, it has been linked to a handful of crashes in addition to a fatal one in Florida in May by U.S. auto-safety regulators. That death was the first in a Tesla car using Autopilot, the company said, spurring about self-driving technology.
Regulators said Wednesday they about a Tesla Model X crash July 1 in Pennsylvania. Tesla said it has "no reason to believe Autopilot has anything to do with this accident" but has been unable to access certain data from the vehicle.
Two drivers told the Journal they believe Tesla's technology failed to recognize a stopped vehicle. As a result, the drivers said, their vehicles kept going until it was too late.
Other users of Autopilot said it works so well that it has lulled them into potentially dangerous situations, such as falling asleep at the wheel and allowing the car to navigate construction zones.
"I look down at my phone a little more than I used to," said Jason Hughes, a Hickory, N.C., computer programmer who uses the Autopilot system on his Tesla about 90% of the time. "People are overly confident in it, in my opinion. They think it can do magical things, but it can't go beyond what its sensors tell it."
In response to questions from the Journal, a Tesla spokesman said there have been several nonlethal accidents since the inception of Autopilot, now on about 70,000 vehicles world-wide. He said the accident rate among Tesla drivers who use the technology is far lower than those who don't.
Still, the Palo Alto, Calif., auto maker has begun looking for ways to intervene when drivers misuse its automated-driving system.
Tesla might decide to temporarily disable Autopilot if a driver consistently doesn't respond to a warning light or bell, and then fails to put his hands back on the wheel, a person familiar with the matter said.
Tesla also is planning to update the Autopilot software in coming months but won't make specific changes as a result of the fatal crash, the Tesla spokesman said.
Joshua Brown of Canton, Ohio, crashed into an 18-wheel truck on May 7. Florida Highway Patrol Sgt. Kim Montes said a portable DVD player was found in Mr. Brown's Model S. Law-enforcement officials don't know if the device was on at the time of the collision. The truck driver said in an interview Mr. Brown was watching a movie.
The auto maker and its chief executive, Elon Musk, have urged caution about using Autopilot while aggressively promoting its capabilities. Owner's manuals state that the technology "is designed for your driving comfort and convenience and is not a collision warning or avoidance system."
Tesla said Autopilot "is by far the most advanced such system on the road, but it does not turn a Tesla into an autonomous vehicle and does not allow the driver to abdicate responsibility."
In March 2015, Mr. Musk told reporters the system could make it possible in the future for Tesla vehicles to drive themselves "from parking lot to parking lot."
Tesla was testing Autopilot on a route between Seattle and San Francisco, Mr. Musk said, and the technology was almost capable of handling the entire trip without the driver touching any controls.
In April of this year, Mr. Musk by Mr. Brown that shows the Autopilot of his Model S preventing a crash.
The Tesla spokesman said Mr. Musk's comments about the test vehicle's capabilities conveyed his vision for the system, adding that customers are told explicitly what Autopilot is and isn't capable of doing.
Tesla has said its technology is the most advanced system on the market, partly because drivers can download improvements directly to their vehicle.
Offerings from other auto makers include adaptive cruise control, automatic brakes and other features that perform some driving functions when activated. Google parent Alphabet Inc. is developing and testing technology aimed at driving cars without any human interaction.
Some auto makers have moved more slowly than Tesla. General Motors Co. in 2012 said it was testing a technology called "Super Cruise," showing how a self-piloted Cadillac could allow drivers to sit back and relax. The driverless system was supposed to debut this year but has been delayed until 2017.
Volvo Car Corp. offers a hands-free option on its XC90 sport-utility vehicle but limits use to speeds of 30 mph or less. The cap will rise to 80 mph later this year in a new sedan called the S90.
Mobileye NV, a supplier of driverless equipment to Tesla and other auto makers, relies on a camera to detect cars, lane lines and other obstacles. Mobileye said its system isn't designed to always detect vehicles cutting in front with a left turn, which occurred in the fatal Florida crash.
The company said its "lateral turn across path" function will be available in 2018.
Autopilot will usually detect such crossings, but in the crash that killed Mr. Brown, the system failed to distinguish the 18-wheeler's white trailer from the bright sky, .
If the system had detected the truck's front or rear, it likely would have sounded alarms and slowed the car, according to Tesla.
Tesla said last week that Mr. Brown's death was the first fatality in more than 130 million miles driven with Autopilot. In the U.S. overall, there was one death for every 89.3 million miles driven last year, according to a National Highway Traffic Safety Administration estimate.
Proponents of driverless cars say the technology has the potential to reduce traffic fatalities, which topped an estimated 35,000 in the U.S. last year. More than 90% of fatal crashes stem from human error, including drunken driving. "Driverless cars don't drink," said GM President Dan Ammann in an interview in May.
Chris Allessi II, a former car salesman from Greendale, Wis., said the technology saved him from hitting a texting bicyclist who pulled in front of him in May.
"I guarantee he wouldn't have survived," Mr. Allessi said.
Austin Meyer, a software entrepreneur in Columbia, S.C., said he typically uses Autopilot only when he wants to do something else while driving, such as search for a new radio station, look up directions or eat lunch.
"At that point, you're probably safer with Autopilot because you're going to be distracted anyway," Mr. Meyer said.
The first time he let the car drive itself, Mr. Meyer said he had to to stop his Tesla from running over a line of orange traffic cones. He later recorded a video of himself reading a newspaper while the car travels down a private road.
Switching from passive to active driving might be too complicated for some drivers, especially after a long period of inactivity, according to some driverless-car advocates.
"Human nature is such that if they're not doing anything, they're going to get distracted or drowsy and incapable of taking over," said Dean Pomerleau, an adjunct professor at Carnegie Mellon University in Pittsburgh who has worked on self-driving technology for 25 years.
Mr. Bennett, whose Tesla hit a truck on I-66 in November, said a warning bell sounded too late for him to avoid the collision. He urged Tesla to highlight more forcefully that the technology might not detect some stationary vehicles and other objects, including motorcycles, cyclists and small animals.
Tesla responded that it was "sorry to hear of your accident and pleased that you are safe," according to a December letter to Mr. Bennett. But the crash "was the result of driver error," the company concluded after its review. "To an attentive driver, it would have been clear that the driver should immediately slow the vehicle to avoid the accident."
According to Tesla, he pressed the brake pedal less than a second before hitting the truck and turned the steering wheel clockwise. Tesla said those moves "canceled the activation" of automatic emergency brakes.
The letter recommended Mr. Bennett, 45 years old, review his owner's manual "to familiarize yourself with the specific conditions for the proper usage" of Autopilot.
Mr. Bennett said he accepts responsibility for the crash but remains dissatisfied with Autopilot's performance and how Tesla informed drivers about its limitations. "Just make this more obvious to owners," he said.
Arianna Simpson, a venture capitalist in San Francisco, said the Autopilot in her Model S "did absolutely nothing" when the car she was following on Interstate 5 near Los Angeles changed lanes, revealing another car parked on the highway.
Her Model S rammed into that car, she said, damaging both vehicles but causing no major injuries.
Tesla responded that the April crash was her fault because she hit the brakes right before the collision, disengaging Autopilot. Before that, the car sounded a collision warning as it should have, the car's data show.
"So if you don't brake, it's your fault because you weren't paying attention," said Ms. Simpson, 25. "And if you do brake, it's your fault because you were driving."
She doesn't expect to use Autopilot much once her Model S is repaired, partly because she thinks she would constantly second-guess the automated-driving system.
"When I have a bug on my app, it crashes. When I have a bug on my car, people die. There is a slightly different burden on the company," Ms. Simpson said. "I don't want to die, and I don't want others to die."
In response, Tesla said it has "continuously educated customers on the use of the feature, reminding them that they're responsible for remaining alert and present when using Autopilot and must be prepared to take control at all times."
John D. Stoll and Jim Oberman contributed to this article.
Write to Mike Spector at mike.spector@wsj.com , Jack Nicas at and Mike Ramsey at
Credit: By Mike Spector, Jack Nicas and Mike Ramsey
Subject: Software; Electric vehicles; Traffic accidents & safety; Autonomous vehicles
Location: United States--US
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: Jul 7, 2016
column: Technology
Section: Page One
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1802058256
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1802058256?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Failure Of Tesla's AutoPilot Is Warning Sign For Tech
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 July 2016: n/a.
ProQuest document link
Abstract:
Failure Of Tesla's AutoPilot Is Warning Sign For Tech The death of Joshua Brown, who was killed in May when the AutoPilot feature on his Tesla Model S failed to recognize an 18-wheel tractor trailer and slammed into it, should be a warning to all tech companies about the risks of releasing new technology--even when they warn customers, as Tesla says it did, that the technology is still in beta.
Full text: Welcome to the new WSJ Pro Venture Capital
Check out our new website for data, infographics and a 10-year archive of stories.
Failure Of Tesla's AutoPilot Is Warning Sign For Tech
The death of Joshua Brown, who was killed in May when the AutoPilot feature on his Tesla Model S failed to recognize an 18-wheel tractor trailer and slammed into it, should be a warning to all tech companies about the risks of releasing new technology--even when they warn customers, as Tesla says it did, that the technology is still in beta.
Beta too often has been a euphemism in this industry for pushing out products fast and fixing bugs or filling holes later, without much thought for the consequences.
It is the way tech companies have operated since I started covering the industry in 1994. Tech enthusiasts like to get products first, and if you're releasing a buggy word processor, the potential for harm isn't that great.
But software is penetrating every industry in ways that inevitably affect human safety and well-being. The Wall Street Journal on Wednesday uncovered other accidents involving Tesla's AutoPilot, although none of them, fortunately, were fatal.
Two drivers told the Journal they believe AutoPilot failed to recognize stopped vehicles. Others said AutoPilot worked so well that they felt lulled into potentially dangerous situations, like falling asleep at the wheel.
One driver said that while he accepts Tesla's assessment that his car's collision with a parked truck was his fault because he was inattentive, he's dissatisfied with the way Tesla warns drivers about AutoPilot's limitations.
A Tesla spokesman told the Journal that Tesla has "continuously educated customers" on the use of AutoPilot, and that the accident rate among AutoPilot users is far lower than for drivers who don't use it.
Despite Mr. Brown's tragic death, Tesla CEO Elon Musk is right to pursue self-driving cars, because they hold great promise. When the technology works well, we can expect it to cut accidents, save lives, lower fuel usage and ease traffic congestion, among many other benefits.
But just as the airline industry and the auto industry have had to learn, sometimes painfully, about safety (remember Ralph Nader's crusade in the 1970s against the exploding Ford Pinto), so will the tech industry, and that includes Tesla, have to learn safety.
Send us your tips, suggestions and feedback. Write to:
Yuliya Chernova ; Deborah Gage ; Russ Garland ; Brian Gormley ; Patience Haggin ; Scott Martin ; Cat Zakrzewski ; Christopher Zinsli .
Follow us on Twitter:
@ychernova , @deborahgage , @RussGarland , @BrianPGormley , @patiencehaggin , @scottysmartin , @Cat_Zakrzewski , @zinsli
Subject: High tech industries
People: Musk, Elon Nader, Ralph
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 7, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1802183752
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1802183752?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Failure Of Tesla's AutoPilot Is Warning Sign For Tech
Author: Gage, Deborah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 July 2016: n/a. [Duplicate]
ProQuest document link
Abstract:
The death of Joshua Brown, who was killed in May when the AutoPilot feature on his Tesla Model S failed to recognize an 18-wheel tractor trailer and slammed into it, should be a warning to all tech companies about the risks of releasing new technology--even when they warn customers, as Tesla says it did, that the technology is still in beta.
Full text: The death of Joshua Brown, who was killed in May when the AutoPilot feature on his Tesla Model S failed to recognize an 18-wheel tractor trailer and slammed into it, should be a warning to all tech companies about the risks of releasing new technology--even when they warn customers, as Tesla says it did, that the technology is still in beta.
Beta too often has been a euphemism in this industry for pushing out products fast and fixing bugs or filling holes later, without much thought for the consequences.
It is the way tech companies have operated since I started covering the industry in 1994. Tech enthusiasts like to get products first, and if you're releasing a buggy word processor, the potential for harm isn't that great.
But software is penetrating every industry in ways that inevitably affect human safety and well-being. The Wall Street Journal on Wednesday uncovered other accidents involving Tesla's AutoPilot, although none of them, fortunately, were fatal.
Two drivers told the Journal they believe AutoPilot failed to recognize stopped vehicles. Others said AutoPilot worked so well that they felt lulled into potentially dangerous situations, like falling asleep at the wheel.
One driver said that while he accepts Tesla's assessment that his car's collision with a parked truck was his fault because he was inattentive, he's dissatisfied with the way Tesla warns drivers about AutoPilot's limitations.
A Tesla spokesman told the Journal that Tesla has "continuously educated customers" on the use of AutoPilot, and that the accident rate among AutoPilot users is far lower than for drivers who don't use it.
Despite Mr. Brown's tragic death, Tesla CEO Elon Musk is right to pursue self-driving cars, because they hold great promise. When the technology works well, we can expect it to cut accidents, save lives, lower fuel usage and ease traffic congestion, among many other benefits.
But just as the airline industry and the auto industry have had to learn, sometimes painfully, about safety (remember Ralph Nader's crusade in the 1970s against the exploding Ford Pinto), so will the tech industry, and that includes Tesla, have to learn safety.
Write to Deborah Gage at Deborah.Gage@dowjones.com
Credit: By Deborah Gage
Subject: Computer industry; High tech industries
People: Musk, Elon Nader, Ralph
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 7, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: Eng lish
Document type: News
ProQuest document ID: 1802429960
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1802429960?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Panasonic Still Bullish on Tesla; Japanese company says car-battery revenue from Tesla and others will more than double in the next three years
Author: Mochizuki, Takashi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 July 2016: n/a.
ProQuest document link
Abstract: None available.
Full text: OSAKA, Japan--Panasonic Corp. issued a bullish forecast on its business with Tesla Motors Inc. despite a May accident that killed a Tesla driver, saying Panasonic's car-battery revenue from the electric-vehicle maker and others will more than double in the next three years to about $4 billion.
Panasonic is the exclusive supplier of the lithium-ion batteries that power Tesla's Model S sedan, Model X sport-utility vehicle and the coming mass-market Model 3, which Tesla says will be available late next year. The two companies are building a battery "gigafactory" in Nevada, set to cost up to $5 billion.
"We are currently installing machinery, and the recent accident won't affect our plan to launch the factory this year," Kenji Tamura, the head of Panasonic's energy business, told a briefing for reporters. The fatal accident, in which a Model S crashed into a tractor-trailer on a Florida highway, plunged Tesla into controversy . The company said it was the first death of a Tesla driver who was using the car maker's Autopilot self-driving function.
Mr. Tamura said Panasonic will speed up its $1.6 billion investment in the factory to catch up with stronger-than-expected demand for the Model 3. He forecast that revenue from Panasonic's car-battery business, including Tesla, will hit ¥400 billion ($4 billion) by the year ending March 2019, up from ¥180 billion in the year ended this past March. Though better known to consumers as a maker of televisions and home appliances, Osaka-based Panasonic has increasingly been relying on auto makers for growth.
South Korean battery makers have been looking to cut into Panasonic's business with Tesla. After recent speculation about South Korean inroads, Tesla CEO Elon Musk said on his official Twitter account that Panasonic is the exclusive battery supplier for the Model S, Model X and Model 3.
Mr. Tamura said he is confident Panasonic will be able to keep the exclusive contract by consistently improving its batteries, such as by increasing their lifespan. Analysts say the biggest question mark for Panasonic is the future size of the electric-car industry.
"It's not clear yet whether demand for electric cars will increase at a fast pace," said Yu Okazaki, an analyst at Nomura Securities. "We should pay attention to gasoline-price movements and concerns about the safety of electric vehicles, which would all affect customer preference and the industry outlook."
Panasonic forecasts that by 2025 the automotive battery industry will grow to ¥2.9 trillion ($29 billion), six times its size in 2015, helped by strengthening environmental regulations that may make it harder for gasoline-powered cars to stay on the road.
Mr. Tamura said Tesla isn't the only customer for Panasonic car batteries. In addition to the U.S. factory, Panasonic is building a battery factory in China that is set to start operating by March 2018. It opened a battery R&D center in Yokohama, Japan, in April.
Write to Takashi Mochizuki at takashi.mochizuki@wsj.com
Credit: By Takashi Mochizuki
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 8, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1802478707
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1802478707?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Roads That Work for Self-Driving Cars; The recent death involving a Tesla 'autopilot' car underscores the fact that new technology needs new infrastructure
Author: Kaplan, Jerry
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 July 2016: n/a.
ProQuest document link
Abstract:
The true power of the automobile was unleashed only after streets were paved, lanes marked, traffic lights installed, pedestrians confined to sidewalks and horse-drawn traffic curtailed.
Full text: In May, a Tesla "autopilot" enthusiast in Florida became the first known fatality in a self-driving car. But this was no ordinary accident. The car performed exactly as designed, and the (non)driver's failure to take any corrective action could reasonably have been foreseen by the manufacturer. This unwelcome yet widely anticipated milestone may set back progress on what promises to be one of the most valuable technologies of the 21st century.
In its rush to get hot new products into consumers' hands, Tesla--along with many other car manufacturers--has pursued a flawed vision of the future, one in which tomorrow's technology is simply layered on top of today's. As with the "horseless carriages" of the early 1900s, which at first were merely added to the jumble of pedestrians and carts swarming through the streets, the real benefits of the new technology won't be realized until we see substantial changes in our transportation infrastructure.
The true power of the automobile was unleashed only after streets were paved, lanes marked, traffic lights installed, pedestrians confined to sidewalks and horse-drawn traffic curtailed. No longer limited by the slow gait of horses, the new self-powered vehicles fueled the rise of the suburbs, revolutionized the shipment of freight and increased personal freedom. They also created whole new industries and millions of jobs.
The same will be true of self-driving cars, whose transformative potential is no less spectacular. But two things have to happen first: We must separate automated vehicles from those driven by humans, and on those new thoroughfares, every vehicle and traffic-control system must be equipped with a transponder, for sending and receiving navigational information.
The National Highway Traffic Safety Administration is soon expected to issue rules that will mandate transponders for all new cars and most trucks. This will permit vehicles to broadcast their speed, heading and braking status to anyone or anything within 300 meters, which is well beyond the range of current onboard sensors. These devices, called "V2V" (vehicle-to-vehicle) communicators, can see around corners and convey a driver's intent (such as, say, an impending left turn), along with other relevant information. The NHTSA estimates that, at intersections alone, this simple step could prevent 500,000 crashes a year, saving 930 lives.
But the new regulations expect this technology to be used merely as an aid to drivers, like today's cameras that let us see behind our cars. If self-driving cars equipped with these devices were to become our primary means of transportation, with special roads of their own, McKinsey & Company estimates that 90% or more of all accidents and fatalities could be avoided.
Many of these benefits will be realized by eliminating the constraints imposed by lanes, traffic lights and speed limits, which are needed primarily to accommodate the limitations of human drivers. On today's highways, many accidents are caused, for instance, by the failure of drivers to maintain a safe following distance, the so-called "three-second rule." But automated vehicles are capable of safely following mere inches behind another car. This alone could dramatically increase the capacity of our highways, since less than 10% of the road surface is presently occupied when they are in full use.
Automated cars and trucks also can go far faster when conditions permit and won't need to pause at stop signs or red lights if no cross-traffic, pedestrians or other obstructions are present. The results could be dramatic: speedier commutes and commercial shipping, with far less pollution and energy use.
The potential economic and social benefits of self-driving technology are difficult to overstate. When the taxi you summon arrives within seconds and doesn't require a driver, personal transportation will be far more convenient and much cheaper. You won't want to own (or insure) your own car. Garages will go the way of outhouses, and the 14% of Los Angeles real estate devoted to parking can be repurposed for higher uses.
Labor productivity will soar as commuters work instead of wasting time driving to their offices. A 2014 analysis in the MIT Technology Review estimated that the aggregate financial benefit of converting the bulk of the U.S. fleet to automated vehicles would be more than $3 trillion a year--an incredible 15% of current GDP.
In the fatal self-driving accident in Florida, the car failed to recognize that a truck traveling in the other direction was about to make a left turn in front of it. Tesla pointed out that the driver also failed to take corrective action. As the company said in a statement, "When drivers activate Autopilot, the acknowledgment box explains, among other things, that Autopilot is an assist feature that requires you to keep your hands on the steering wheel at all times."
This disclaimer may mitigate Tesla's liability, but it's simply not practical to ask passengers in a self-driving vehicle to remain alert and engaged. Reports from the accident scene in Florida suggest that the driver may have been watching a "Harry Potter" movie on a portable DVD player at the time.
The risk now is that politicians and government agencies, reacting to such unfortunate incidents, will enact a hodgepodge of new regulations that will hamper the development and adoption of the technology. Companies will focus their resources on the unwieldy problem of integrating limited-functionality products with today's streets and drivers, while consumers will continue to see the technology as a mere novelty or convenience.
A better approach would be to lay out a clear strategic plan and a shared set of assumptions about the future of our transportation infrastructure. Taking the initiative in this way would better foster innovation and let the free market work its magic.
What might such a plan look like? Perhaps we could start by reserving high-occupancy-vehicle lanes or certain roads at specific times for automated vehicles. The increase in road-use efficiency might be enough to compensate for the reduced number of standard lanes. As the mix of vehicles shifted toward self-driving cars and trucks, more roadways could be switched over. Eventually, driving your own car might be something just for local streets or an activity for special recreational areas.
Without a more coherent vision of our transportation future, we will just continue to tinker with our streets, cars and trucks, and we will fail to realize the many profound benefits of vehicles that safely and speedily drive themselves.
--Dr. Kaplan is a fellow at the Center for Legal Informatics at Stanford University. His new book, "Artificial Intelligence: What Everyone Needs to Know," will be published by Oxford University Press in October.
Related Reading
* Tesla Draws Scrutiny After Autopilot Feature Linked to a Death (June 30, 2016)
* With Driverless Cars, a Safety Dilemma Arises (June 23, 2016)
* Driverless Cars to Fuel Suburban Sprawl (June 20, 2016)
* Who's Responsible when a Driverless Car Crashes? Tesla's Got an Idea (May 13, 2015)
* Self-Driving Cars Could Cut Down on Accidents, Study Says (May 5, 2015)
Dan Neil on Driverless Cars
* Could Self-Driving Cars Spell the End of Ownership? (Dec. 1, 2015)
* Driverless Cars for the Road Ahead (Dec. 27, 2013)
* Rules of the Driverless Road (May 3, 2013)
* Who's Behind the Wheel? Nobody. (Sept. 24, 2012)
Credit: By Jerry Kaplan
Subject: Roads & highways; Traffic accidents & safety; Fatalities; Automation; Vehicles; Trucks; Shipping industry
Location: Florida
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 8, 2016
Section: Life
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1802502390
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1802502390?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
For Tesla, the Forecast Is Partly Cloudy; SunEdison's Icarus-like fall offers a cautionary tale for Elon Musk's proposed SolarCity hookup.
Author: Finley, Allysia
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 July 2016: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla has been in the news lately following a fatal accident in Florida involving one of its Model S electric cars running on autonomous cruise control, called Autopilot. Discussions about the future of self-driving cars have overtaken a matter involving Tesla of more near-term interest: Tesla CEO Elon Musk's offer to purchase SolarCity (where Mr. Musk serves as board chairman) for between $23.96 and $25.73 per share, a 25% premium over SolarCity's stock price.
Mr. Musk said that bringing electric cars, solar panels and battery storage under one corporate roof would produce operational synergies and create "the potential for Tesla to be a $1 trillion market cap company." That's about 32 times Tesla's current valuation.
Neither company, though aided considerably by government renewable-energy subsidies, has ever recorded an annual profit. Last year Tesla lost $889 million--nearly three times as much as in 2014--while SolarCity's loss doubled to $769 million. Investors may be feeling déjà vu as a shadow has fallen over the solar industry.
In April, the renewable-energy conglomerate SunEdison filed for chapter 11 bankruptcy following an Icarus-like fall. A year ago, former CEO Ahmad Chatila predicted that his company would be worth $350 billion by 2020--about 35 times its market capitalization at the time. Nine months later, the stock price had plunged by 99%, to 21 cents per share.
SunEdison's stock first began to tumble last July when Mr. Chatila proposed paying $2.2 billion for the rooftop-solar installer Vivint Solar (the deal was scrapped in March), which activist investors lambasted as overpriced. It soon became clear that SunEdison's growth, enabled by debt and complicated financial engineering, was unsustainable.
Notwithstanding Mr. Chatila's sunny forecasts, the company had failed to earn a profit in five years. An internal probe in April faulted a lack of accounting controls and an "overly optimistic culture and its tone at the top." The Tesla-SolarCity deal is an all-stock exchange, but the SunEdison fiasco is a flashing yellow light.
Tesla aims to crank out 500,000 Model 3 sedans in 2018--about 10 times its total deliveries last year--and one million annually by 2020. Yet it isn't clear how fast the company will be able to ramp up production at its not-yet-completed Gigafactory in Reno, Nev., and whether demand for the mass-market electric sedans will meet Mr. Musk's goals. Only 115,000 electric cars were sold last year nationwide, about 0.7% of total U.S. car sales.
SolarCity has also repeatedly missed installation targets and faces strong headwinds. Utility electric-rate increases have slowed amid softening commodity prices, which has dampened demand for solar installations. Industry regulators in many states have reduced or are considering scaling back net metering, which pays customers the retail power rate for the excess generation that they remit to the grid. After Nevada slimmed down its net-metering subsidies last year, SolarCity stopped doing business in the state.
Kroll Bond Rating Agency recently warned that changes to net metering like Nevada's may prompt solar customers to renegotiate their contracts with companies such as SolarCity. A reduction in rates would decrease cash "available to the solar company, debtholders or tax equity investors"--more dark clouds for the solar business.
Yet the relentless government push for renewable energy and electric cars works in favor of Tesla and SolarCity. In 2013, eight states led by California required that 3.3 million electric cars be on the road by 2025. Over the past three years, Tesla has made $580 million from selling "zero emissions vehicle" credits to other auto makers. Demand for these credits could soar as auto makers scramble to comply with the law, and as Tesla ramps up its Model 3 production, Mr. Musk will have plenty to sell.
Ms. Finley is an editorial writer for the Journal.
Related Articles
* The Tesla Paradox
* When Startups Put the Fab in Fabricate
* Elon Musk's Subsidy Aggregation
Credit: By Allysia Finley
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 10, 2016
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1802661218
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1802661218?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
What's Hovering at Your Bedroom Window? The recent deadly Tesla crash is proof that robotic technology is still not perfected--and the Tesla car was far more sophisticated than any current drone equipment available to the general public.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 July 2016: n/a.
ProQuest document link
Abstract:
[...]it is possible for this equipment to actually photograph through windows and see into a bedroom for example.
Full text: I believe L. Gordon Corvitz's Information Age column suggesting that regulations on drones should be relaxed may not represent the desire of the majority ("While Amazon Waits, Drones Fly," June 27). While it is advantageous to use drones for certain emergencies such as fighting fires and locating lost hikers and such government operations as bridge inspections, I do not agree with a general release of drones for arbitrary use.
In particular, I am not convinced that there is an overwhelming demand for aerial package delivery. I deal frequently with Amazon but prefer not to have my orders carpet bombed onto my front yard, and I do not think I am alone. This whole concept is an advertising stunt that could lead to lost orders at best and likely damage property when drones unintentionally crash into structures. The recent deadly Tesla crash is proof that robotic technology is still not perfected--and the Tesla car was far more sophisticated than any current drone equipment available to the general public.
Then there is the question of privacy. These little aircraft are often equipped with very sophisticated cameras that can photograph private property in great detail. Although it is not always legal, real-estate companies already use drones to spy on entire neighborhoods. I, for one, would not like to find pictures of my wife sunbathing in the back yard on YouTube. Moreover, it is possible for this equipment to actually photograph through windows and see into a bedroom for example. How is this different from a "peeping Tom" violation that has been illegal for years? And, without adequate restrictions, how can this type of invasion of privacy be prevented? As with the aforementioned real-estate company operations even the current laws are unenforceable.
The current rules such as restricting commercial use of drones to line- of-sight operation are entirely reasonable. This would allow the farmers to inspect fields and hobbyists to play. But if these rules are relaxed and drones are allowed to fly freely carrying 50-pound-plus payloads, how long would it take for some enterprising terrorist to discover this is a ready platform for delivering a bomb into a stadium or other target?
John R. Ashburn Jr.
Carollton, Va.
Subject: Privacy; Drones
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 10, 2016
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1802661222
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1802661222?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Panasonic Offers Robust View of Tesla Business Ties
Author: Mochizuki, Takashi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 July 2016: B.6.
ProQuest document link
Abstract: None available.
Full text: OSAKA, Japan--Panasonic Corp. issued a bullish forecast on its business with Tesla Motors Inc. despite a May accident that killed a Tesla driver, saying Panasonic's car-battery revenue from the electric-vehicle maker and others will more than double in the next three years to about $4 billion.
Panasonic is the exclusive supplier of the lithium-ion batteries that power Tesla's Model S sedan, Model X sport-utility vehicle and the coming mass-market Model 3, which Tesla says will be available late next year. The two companies are building a
"We are currently installing machinery, and the recent accident won't affect our plan to launch the factory this year," Kenji Tamura, the head of Panasonic's energy business, told a briefing for reporters. The fatal accident, in which a on a Florida highway, . The company said it was the first death of a Tesla driver who was using the car maker's Autopilot self-driving function.
Mr. Tamura said Panasonic will speed up its $1.6 billion investment in the factory to catch up with stronger-than-expected demand for the Model 3. He forecast that revenue from Panasonic's car-battery business, including Tesla, will hit ¥400 billion ($4 billion) by the year ending March 2019, up from ¥180 billion in the year ended this past March. Though better known to consumers as a maker of televisions and home appliances, Osaka-based Panasonic has increasingly been relying on auto makers for growth.
South Korean battery makers have been looking to cut into Panasonic's business with Tesla. After recent speculation about South Korean inroads, Tesla CEO Elon Musk said on his official Twitter account that Panasonic is the exclusive battery supplier for the Model S, Model X and Model 3.
Mr. Tamura said he is confident Panasonic will be able to keep the exclusive contract by consistently improving its batteries, such as by increasing their lifespan. Analysts say the biggest question mark for Panasonic is the future size of the electric-car industry.
"It's not clear yet whether demand for electric cars will increase at a fast pace," said Yu Okazaki, an analyst at Nomura Securities. "We should pay attention to gasoline-price movements and concerns about the safety of electric vehicles, which would all affect customer preference and the industry outlook."
Panasonic forecasts that by 2025 the automotive battery industry will grow to ¥2.9 trillion ($29 billion), six times its size in 2015, helped by strengthening environmental regulations that may make it harder for gasoline-powered cars to stay on the road.
Mr. Tamura said Tesla isn't the only customer for Panasonic car batteries. In addition to the U.S. factory, Panasonic is building a battery factory in China that is set to start operating by March 2018. It opened a battery R&D center in Yokohama, Japan, in April.
Write to Takashi Mochizuki at takashi.mochizuki@wsj.com
Credit: By Takashi Mochizuki
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.6
Publication year: 2016
Publication date: Jul 11, 2016
column: Technology
Section: Business & Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1802674589
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1802674589?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
How Panasonic Can Speed Ahead on More Than Tesla; The Japanese electronics giant remains a reasonable bet on the future of cars
Author: Wong, Jacky
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 July 2016: n/a.
ProQuest document link
Abstract:
[...]as a bet on the future of cars, Panasonic's stock is more reasonable than Tesla's. Since suffering its worst loss ever in 2012, the Japanese company has slashed costs and steered away from consumer electronics--exiting unprofitable businesses such as its disastrous plasma TV and smartphone segments--toward car components, communications and energy-saving systems.
Full text: Tesla Motors is a cash burner. But one company taking a ride is the opposite.
Panasonic jumped 8% Monday after giving a bright outlook for its business with the electric-car maker. The Japanese electronics company is the sole battery supplier for Tesla's Model S, Model X and coming Model 3.
Panasonic's surge--which added $1.6 billion to its market value--seems overdone given that it expects its car-battery revenue to rise by only $2.2 billion in the next three years. But as a bet on the future of cars,
Panasonic's stock is more reasonable than Tesla's.
Since suffering its worst loss ever in 2012, the Japanese company has slashed costs and steered away from consumer electronics--exiting unprofitable businesses such as its disastrous plasma TV and smartphone segments--toward car components, communications and energy-saving systems. Panasonic's profits have been on an upward trend since, and now, after generating free cash flow for the past four years, it is sitting on a net $2.8 billion.
The automotive segment is one that the revamped Panasonic is putting extra effort in. Apart from car batteries, it is a leader in entertainment and navigation systems. It is looking to boost revenue from its driver-assistance systems by two-thirds over the next three years.
The company's focus on making cars incrementally smarter--through giving them such quotidian skills as self-parking and emergency braking--looks less exciting to futurists than creating a fully self-driving car, but could be where the growth is, at least in the coming few years.
Panasonic's share price has halved from last year's peak, when hopes were flying too high. These days, at 12 times forward earnings, the stock looks more grounded.
Write to Jacky Wong at Jacky.Wong@wsj.com
Credit: By Jacky Wong
Subject: Electronics industry; Automobile industry
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 11, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1802726536
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1802726536?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
SEC Investigating Tesla for Possible Securities-Law Breach; Authorities probing whether auto maker should have disclosed Autopilot-related crash to investors
Author: Eaglesham, Jean; Spector, Mike; Pulliam, Susan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 July 2016: n/a.
ProQuest document link
Abstract:
The Securities and Exchange Commission is investigating whether Tesla Motors Inc. breached securities laws by failing to disclose a fatal crash in May involving an electric car that was driving itself, a person familiar with the matter said, heightening scrutiny of how the Silicon Valley company handled the information. Tesla alerted the National Highway Traffic Safety Administration, the U.S. car-safety regulator, to the crash and investigated to determine whether the car was using the company's Autopilot system, which lets cars drive themselves under certain circumstances.
Full text: The Securities and Exchange Commission is investigating whether Tesla Motors Inc. breached securities laws by failing to disclose a fatal crash in May involving an electric car that was driving itself, a person familiar with the matter said, heightening scrutiny of how the Silicon Valley company handled the information.
The May 7 accident killed the driver , Joshua Brown, a 40-year old Tesla owner who collided with an 18-wheel semi-truck that pulled in front of him on a Florida highway.
Tesla alerted the National Highway Traffic Safety Administration, the U.S. car-safety regulator, to the crash and investigated to determine whether the car was using the company's Autopilot system, which lets cars drive themselves under certain circumstances. But Tesla didn't disclose the crash to investors in a securities filing.
The car-safety agency opened an investigation into the Autopilot technology. The National Transportation Safety Board also is investigating the crash to determine whether it reveals systemic issues tied to development of driverless cars and investigations of accidents involving them, an agency spokesman said Monday.
The SEC is scrutinizing whether Tesla should have disclosed the accident as a "material" event, or a development a reasonable investor would consider important, according to the person familiar with the matter. The SEC's inquiry is in a very early stage and may not lead to any enforcement action by regulators, the person added.
A Tesla spokeswoman pointed to a blog post by the Palo Alto, Calif., company, asserting that the May 7 crash didn't require disclosure to investors. Tesla has said the fatal crash was the first in more than 130 million miles driven with Autopilot engaged since the technology made its debut in October. An SEC spokesman declined to comment.
"Tesla has not received any communication from the SEC regarding this issue," the company spokeswoman said. "Our blog post last week provided the relevant information about this issue."
Tesla learned of the crash soon after it happened and informed auto-safety regulators of the incident on May 16, when it had just begun investigating the accident, the company said last week. Tesla at that time hadn't yet determined the car was using Autopilot. Tesla said it alerted regulators to the crash sooner than rules require.
The company didn't disclose the accident in securities filings, such as the one from May 18 when it prepared to sell $2 billion in stock, which included nearly 2.8 million shares sold by Tesla Chief Executive Elon Musk. Tesla has said Mr. Musk's sale was triggered by tax requirements. The share sale took place May 18 and May 19.
After alerting safety regulators to the crash, Tesla sent an investigator on May 18 to Florida to retrieve data from the car for the first time, the company said. Tesla completed reviewing data from the vehicle the last week of May, the company said.
"The damage sustained by the Model S in the crash limited Tesla's ability to recover data from it remotely," a company spokesman said. "During the last week of May, Tesla was able to finish its review of the logs and complete its investigation. The financing round had already taken place by that time."
Tesla on June 30 publicly disclosed the May 7 crash in a company blog post and said that Autopilot was in use at the time of the accident. Auto-safety regulators the same day disclosed their investigation of the crash.
Tesla shares rose nearly 2% on July 1, the first day of trading after auto-safety regulators disclosed their investigation. Tesla shares have continued to rise since then and closed at $224.78 Monday as the S&P 500 hit a record high. In after-hours trading, Tesla shares fell 1.4% to $221.60.
Tesla has said in previous securities filings that a successful liability claim associated with its technology, including the Autopilot feature, could harm the company's financial condition. In its most recent quarterly report , the company said such a claim "could generate substantial negative publicity about our products and business and would have material adverse effect on our brand, business, prospects and operating results."
Tesla said in a recent company blog post that the quarterly filing contained "boilerplate language" that was "stating the obvious" and "had no bearing" on the May 7 fatal crash.
Securities experts say there is no clearly defined standard for whether the May 7 accident was "material" enough to require disclosure by the company. Adam Pritchard, a law professor at the University of Michigan and former SEC attorney, said he would be "very skeptical" that a court would find the fatal crash material and Tesla's failure to disclose it as a breach of securities laws. "The behavior of the stock price--the fact that it bounced back very promptly--most courts would say was fairly persuasive evidence that it was not material." Also in Tesla's favor, he said: "This is development-stage technology. There are going to be wrinkles along the way."
Erik Gerding, a law professor at the University of Colorado in Boulder, said he believes the disclosure issue presented a "tough judgment call" for Tesla executives. "The conservative approach is just to disclose it," he said, adding that the information could be material if it engenders skepticism about Tesla cars.
Auto makers often don't disclose to investors traffic fatalities, which in 2015 topped an estimated 35,000 in the U.S., according to regulators. Car companies often disclose safety recalls or product-liability suits in securities filings when they trigger significant financial charges.
In Tesla's case, the issue is potentially complicated because of the company's aggressive promotion of its new Autopilot technology, which it bills as the most advanced self-driving system on the road. Investors have flocked to Tesla shares in part amid conviction the company is on the technological cutting edge and poised to leap ahead of more traditional auto makers.
Mr. Musk has urged caution about using Autopilot, while also aggressively touting its capabilities.
Owner's manuals warn Autopilot may not detect all objects and state that the technology "is designed for your driving comfort and convenience and is not a collision warning or avoidance system." The company, while calling Autopilot the most advanced such system on the road, says it doesn't turn a Tesla into an autonomous vehicle and doesn't allow drivers to "abdicate responsibility."
Write to Jean Eaglesham at jean.eaglesham@wsj.com , Mike Spector at mike.spector@wsj.com and Susan Pulliam at susan.pulliam@wsj.com
Related
* Tesla's Autopilot Vexes Some Drivers, Even Its Fans (July 6)
* Tesla's 'Autopilot' Flew Under Regulators' Oversight (July 2)
* Fatal Crash May Slow Advance of Self-Driving Cars (July 1)
* Tesla Draws Scrutiny After Autopilot Linked to Death (June 30)
Credit: By Jean Eaglesham, Mike Spector and Susan Pulliam
Subject: Investigations; Traffic accidents & safety; Automobile safety; Investments; Disclosure
Location: United States--US Florida
Company / organization: Name: National Transportation Safety Board; NAICS: 926120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 11, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1802864845
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1802864845?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
For Tesla, The Forecast Is Partly Cloudy
Author: Finley, Allysia
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 July 2016: A.15.
ProQuest document link
Abstract:
Mr. Musk said that bringing electric cars, solar panels and battery storage under one corporate roof would produce operational synergies and create "the potential for Tesla to be a $1 trillion market cap company."
Full text: Tesla has been in the news lately following a fatal accident in Florida involving one of its Model S electric cars running on autonomous cruise control, called Autopilot. Discussions about the future of self-driving cars have overtaken a matter involving Tesla of more near-term interest: Telsa CEO Elon Musk's offer to purchase SolarCity (where Mr. Musk serves as board chairman) for between $23.96 and $25.73 per share, a 25% premium over SolarCity's stock price.
Mr. Musk said that bringing electric cars, solar panels and battery storage under one corporate roof would produce operational synergies and create "the potential for Tesla to be a $1 trillion market cap company." That's about 32 times Tesla's current valuation.
Neither company, though aided considerably by government renewable-energy subsidies, has ever recorded an annual profit. Last year Tesla lost $889 million -- nearly three times as much as in 2014 -- while SolarCity's loss doubled to $769 million. Investors may be feeling deja vu as a shadow has fallen over the solar industry.
In April, the renewable-energy conglomerate SunEdison filed for chapter 11 bankruptcy following an Icarus-like fall. A year ago, former CEO Ahmad Chatila predicted that his company would be worth $350 billion by 2020 -- about 35 times its market capitalization at the time. Nine months later, the stock price had plunged by 99%, to 21 cents per share.
SunEdison's stock first began to tumble last July when Mr. Chatila proposed paying $2.2 billion for the rooftop-solar installer Vivint Solar (the deal was scrapped in March), which activist investors lambasted as overpriced. It soon became clear that SunEdison's growth, enabled by debt and complicated financial engineering, was unsustainable.
Notwithstanding Mr. Chatila's sunny forecasts, the company had failed to earn a profit in five years. An internal probe in April faulted a lack of accounting controls and an "overly optimistic culture and its tone at the top." The Tesla-SolarCity deal is an all-stock exchange, but the SunEdison fiasco is a flashing yellow light.
Tesla aims to crank out 500,000 Model 3 sedans in 2018 -- about 10 times its total deliveries last year -- and one million annually by 2020. Yet it isn't clear how fast the company will be able to ramp up production at its not-yet-completed Gigafactory in Reno, Nev., and whether demand for the mass-market electric sedans will meet Mr. Musk's goals. Only 115,000 electric cars were sold last year nationwide, about 0.7% of total U.S. car sales.
SolarCity has also repeatedly missed installation targets and faces strong headwinds. Utility electric-rate increases have slowed amid softening commodity prices, which has dampened demand for solar installations. Industry regulators in many states have reduced or are considering scaling back net metering, which pays customers the retail power rate for the excess generation that they remit to the grid. After Nevada slimmed down its net-metering subsidies last year, SolarCity stopped doing business in the state.
Kroll Bond Rating Agency recently warned that changes to net metering like Nevada's may prompt solar customers to renegotiate their contracts with companies such as SolarCity. A reduction in rates would decrease cash "available to the solar company, debtholders or tax equity investors" -- more dark clouds for the solar business.
Yet the relentless government push for renewable energy and electric cars works in favor of Tesla and SolarCity. In 2013, eight states led by California required that 3.3 million electric cars be on the road by 2025. Over the past three years, Tesla has made $580 million from selling "zero emissions vehicle" credits to other auto makers. Demand for these credits could soar as auto makers scramble to comply with the law, and as Tesla ramps up its Model 3 production, Mr. Musk will have plenty to sell.
---
Ms. Finley is an editorial writer for the Journal.
Credit: By Allysia Finley
Subject: Automobile industry; Corporate profits; Subsidies; Alternative energy; Investments; Electric vehicles; Bond ratings
Location: California Florida
Company / organization: Name: SunEdison; NAICS: 221114, 221118
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.15
Publication year: 2016
Publication date: Jul 11, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1805723506
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1805723506?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited with out permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Panasonic Offers Robust View of Tesla Business Ties
Author: Mochizuki, Takashi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 July 2016: B.6. [Duplicate]
ProQuest document link
Abstract:
Panasonic is the exclusive supplier of the lithium-ion batteries that power Tesla's Model S sedan, Model X sport-utility vehicle and the coming mass-market Model 3, which Tesla says will be available late next year.
Full text: OSAKA, Japan -- Panasonic Corp. issued a bullish forecast on its business with Tesla Motors Inc. despite a May accident that killed a Tesla driver, saying Panasonic's car-battery revenue from the electric-vehicle maker and others would more than double in the next three years to about $4 billion.
Panasonic is the exclusive supplier of the lithium-ion batteries that power Tesla's Model S sedan, Model X sport-utility vehicle and the coming mass-market Model 3, which Tesla says will be available late next year. The two companies are building a so-called battery gigafactory in Nevada, set to cost as much as $5 billion.
"We are currently installing machinery, and the recent accident won't affect our plan to launch the factory this year," Kenji Tamura, the head of Panasonic's energy business, told reporters.
The fatal accident, in which a Model S crashed into a tractor-trailer on a Florida highway, plunged Tesla into controversy. The company said it was the first death of a Tesla driver who was using the car maker's Autopilot self-driving function.
Mr. Tamura said Panasonic will speed up its $1.6 billion investment in the factory to catch up with stronger-than-expected demand for the Model 3. He forecast that revenue from Panasonic's car-battery business, including Tesla, will hit 400 billion yen ($4 billion) by the year ending in March 2019, up from 180 billion yen in the year ended this past March. Though better known to consumers as a maker of televisions and home appliances, Osaka-based Panasonic increasingly has been relying on auto makers for growth.
South Korean battery makers have been looking to cut into Panasonic's business with Tesla. After recent speculation about South Korean inroads, Tesla Chief Executive Elon Musk said on his Twitter account that Panasonic is the exclusive battery supplier for the Model S, Model X and Model 3.
Mr. Tamura said he is confident Panasonic would be able to keep the exclusive contract by consistently improving its batteries, such as by increasing their lifespan. The biggest question mark for Panasonic is the future size of the electric-car industry, analysts say.
"It's not clear yet whether demand for electric cars will increase at a fast pace," said Yu Okazaki, an analyst at Nomura Securities. "We should pay attention to gasoline-price movements and concerns about the safety of electric vehicles, which would all affect customer preference."
Panasonic forecasts that by 2025 the automotive-battery industry will grow to 2.9 trillion yen, six times its size in 2015, helped by strengthening environmental regulations that might make it harder for gasoline-powered cars to stay on the road.
Mr. Tamura said Tesla isn't the only customer for Panasonic car batteries. In addition to the U.S. factory, Panasonic is building a battery factory in China that is set to start operating by March 2018. It opened a battery research-and-development center in Yokohama, Japan, in April.
Credit: By Takashi Mochizuki
Subject: Electric vehicles; Joint ventures; Automobile industry
Location: Japan
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: Panasonic Corp; NAICS: 333415, 335222, 335224
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.6
Publication year: 2016
Publication date: Jul 11, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1805723588
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1805723588?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
SEC Investigating Tesla for Possible Securities-Law Breach; Authorities probing whether auto maker should have disclosed Autopilot-related crash to investors
Author: Eaglesham, Jean; Spector, Mike; Pulliam, Susan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 July 2016: n/a.
ProQuest document link
Abstract:
The Securities and Exchange Commission is investigating whether Tesla Motors Inc. breached securities laws by failing to disclose to investors a fatal crash in May involving an electric car that was driving itself, a person familiar with the matter said, heightening scrutiny of how the company handled the information. Tesla alerted the National Highway Traffic Safety Administration, the U.S. car-safety regulator, to the crash and investigated to determine whether the car was using the company's Autopilot system, which lets cars drive themselves under certain circumstances.
Full text: The Securities and Exchange Commission is investigating whether Tesla Motors Inc. breached securities laws by failing to disclose to investors a fatal crash in May involving an electric car that was driving itself, a person familiar with the matter said, heightening scrutiny of how the company handled the information.
The May 7 accident killed the driver , Joshua Brown, a 40-year-old Tesla owner who collided with an 18-wheel semi-truck that pulled in front of him on a Florida highway.
Tesla alerted the National Highway Traffic Safety Administration, the U.S. car-safety regulator, to the crash and investigated to determine whether the car was using the company's Autopilot system, which lets cars drive themselves under certain circumstances. But Tesla didn't disclose the crash to investors in a securities filing.
The car-safety agency opened an investigation into the Autopilot technology. The National Transportation Safety Board also is investigating the crash to determine whether it reveals systemic issues tied to development of driverless cars and probes of accidents involving them, an agency spokesman said Monday.
The SEC is scrutinizing whether Tesla should have disclosed the accident as a "material" event, or a development a reasonable investor would consider important, according to the person familiar with the matter. The SEC's inquiry is in a very early stage and may not lead to any enforcement action by regulators, the person said.
A Tesla spokeswoman pointed to a blog post by the Palo Alto, Calif., company, asserting that the May 7 crash didn't require disclosure to investors. Tesla has said the fatal crash was the first in more than 130 million miles driven with Autopilot engaged since the technology made its debut in October. An SEC spokesman declined to comment.
"Tesla has not received any communication from the SEC regarding this issue," the company spokeswoman said. "Our blog post last week provided the relevant information about this issue."
Tesla learned of the crash soon after it happened and informed auto-safety regulators of the incident on May 16, when it had just begun investigating the accident, the company said last week. Tesla at that time hadn't yet determined the car was using Autopilot. Tesla said it alerted regulators to the crash sooner than rules require.
The company didn't disclose the accident in securities filings, such as the one from May 18 when it prepared to sell $2 billion in stock, which included nearly 2.8 million shares sold by Tesla Chief Executive Elon Musk. Tesla has said Mr. Musk's sale was triggered by tax requirements. The share sale took place May 18 and May 19.
After alerting safety regulators to the crash, Tesla sent an investigator on May 18 to Florida to retrieve data from the car for the first time, the company said. Tesla completed reviewing data from the vehicle the last week of May, the company said.
"The damage sustained by the Model S in the crash limited Tesla's ability to recover data from it remotely," a company spokesman said. "During the last week of May, Tesla was able to finish its review of the logs and complete its investigation. The financing round had already taken place by that time," he said.
"I didn't know there had been an Autopilot incident at the time of the fundraising," Mr. Musk said in an interview. "What we told NHTSA [on May 16] was just that somebody died--it wasn't that there was an Autopilot incident. I also don't think it's material, but I didn't know about it."
Tesla on June 30 publicly disclosed the May 7 crash in a company blog post and said Autopilot was in use at the time of the accident. Auto-safety regulators the same day disclosed their investigation of the crash.
Tesla shares rose nearly 2% on July 1, the first day of trading after auto-safety regulators disclosed their investigation. Tesla shares have continued to rise since then and closed at $224.78 Monday as the S&P 500 hit a record high. In after-hours trading, Tesla shares fell 1.4% to $221.60.
Tesla has said in previous securities filings that a successful liability claim associated with its technology, including the Autopilot feature, could harm the company's financial condition. In its most recent quarterly report , the company said such a claim "could generate substantial negative publicity about our products and business and would have material adverse effect on our brand, business, prospects and operating results."
Tesla said in a recent company blog post that the quarterly filing contained "boilerplate language" that was "stating the obvious" and "had no bearing" on the May 7 fatal crash.
Securities experts say there is no clearly defined standard for whether the May 7 accident was "material" enough to require disclosure by the company. Adam Pritchard, a law professor at the University of Michigan and former SEC attorney, said he would be "very skeptical" a court would find the fatal crash material and Tesla's failure to disclose it as a breach of securities laws. "The behavior of the stock price--the fact that it bounced back very promptly--most courts would say was fairly persuasive evidence that it was not material." Also in Tesla's favor, he said: "This is development-stage technology. There are going to be wrinkles along the way."
Erik Gerding, a law professor at the University of Colorado in Boulder, said he believes the disclosure issue presented a "tough judgment call" for Tesla executives. "The conservative approach is just to disclose it," he said, adding that the information could be material if it engenders skepticism about Tesla cars.
Auto makers often don't disclose to investors traffic fatalities, which in 2015 topped an estimated 35,000 in the U.S., according to regulators. Car companies often disclose safety recalls or product-liability suits in securities filings when they trigger significant financial charges.
In Tesla's case, the issue is potentially complicated because of the company's aggressive promotion of its new Autopilot technology, which it bills as the most advanced self-driving system on the road. Investors have flocked to Tesla shares in part on the conviction that the company is on the technological cutting edge and poised to leap ahead of more traditional auto makers.
Mr. Musk has urged caution about using Autopilot, while also aggressively touting its capabilities.
Owner's manuals warn Autopilot may not detect all objects and state that the technology "is designed for your driving comfort and convenience and is not a collision warning or avoidance system." The company, while calling Autopilot the most advanced such system on the road, says it doesn't turn a Tesla into an autonomous vehicle and doesn't allow drivers to "abdicate responsibility."
Michael Ramsey contributed to this article.
Write to Jean Eaglesham at jean.eaglesham@wsj.com , Mike Spector at mike.spector@wsj.com and Susan Pulliam at susan.pulliam@wsj.com
Related
* Tesla's Autopilot Vexes Some Drivers, Even Its Fans (July 6)
* Tesla's 'Autopilot' Flew Under Regulators' Oversight (July 2)
* Fatal Crash May Slow Advance of Self-Driving Cars (July 1)
* Tesla Draws Scrutiny After Autopilot Linked to Death (June 30)
Credit: By Jean Eaglesham, Mike Spector and Susan Pulliam
Subject: Investigations; Fatalities; Traffic accidents & safety; Automobile safety; Investments; Disclosure
Location: United States--US Florida
Company / organization: Name: National Transportation Safety Board; NAICS: 926120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 12, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1802940916
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1802940916?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Is Probed by SEC After Fatal Crash
Author: Eaglesham, Jean; Spector, Mike; Pulliam, Susan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 July 2016: B.1.
ProQuest document link
Abstract:
The Securities and Exchange Commission is investigating whether Tesla Motors Inc. breached securities laws by failing to disclose to investors a fatal crash in May involving an electric car that was driving itself, a person familiar with the matter said, heightening scrutiny of how the company handled the information. Tesla alerted the National Highway Traffic Safety Administration, the U.S. car-safety regulator, to the crash and investigated to determine whether the car was using the company's Autopilot system, which lets cars drive themselves under certain circumstances.
Full text: The Securities and Exchange Commission is investigating whether Tesla Motors Inc. breached securities laws by failing to disclose to investors a fatal crash in May involving an electric car that was driving itself, a person familiar with the matter said, heightening scrutiny of how the company handled the information.
The May 7 accident killed the driver, Joshua Brown, a 40-year old Tesla owner who collided with an 18-wheel semi-truck that pulled in front of him on a Florida highway.
Tesla alerted the National Highway Traffic Safety Administration, the U.S. car-safety regulator, to the crash and investigated to determine whether the car was using the company's Autopilot system, which lets cars drive themselves under certain circumstances. But Tesla didn't disclose the crash to investors in a securities filing.
The car-safety agency opened an investigation into the Autopilot technology. The National Transportation Safety Board also is investigating the crash to determine whether it reveals systemic issues tied to development of driverless cars and probes of accidents involving them, an agency spokesman said Monday.
The SEC is scrutinizing whether Tesla should have disclosed the accident as a "material" event, or a development a reasonable investor would consider important, according to the person familiar with the matter. The SEC's inquiry is in a very early stage and may not lead to any enforcement action by regulators, the person added.
A Tesla spokeswoman pointed to a blog post by the Palo Alto, Calif., company, asserting that the May 7 crash didn't require disclosure to investors. Tesla has said the fatal crash was the first in more than 130 million miles driven with Autopilot engaged since the technology made its debut in October. An SEC spokesman declined to comment.
"Tesla has not received any communication from the SEC regarding this issue," the company spokeswoman said. "Our blog post last week provided the relevant information about this issue."
Tesla learned of the crash soon after it happened and informed auto-safety regulators of the incident on May 16, when it had just begun investigating the accident, the company said last week. Tesla at that time hadn't yet determined the car was using Autopilot. Tesla said it alerted regulators to the crash sooner than rules require.
The company didn't disclose the accident in securities filings, such as the one from May 18 when it prepared to sell $2 billion in stock, which included nearly 2.8 million shares sold by Tesla Chief Executive Elon Musk. Tesla has said Mr. Musk's sale was triggered by tax requirements. The share sale took place May 18 and May 19.
After alerting safety regulators to the crash, Tesla sent an investigator on May 18 to Florida to retrieve data from the car for the first time, the company said. Tesla completed reviewing data from the vehicle the last week of May, the company said.
"The damage sustained by the Model S in the crash limited Tesla's ability to recover data from it remotely," a company spokesman said. "During the last week of May, Tesla was able to finish its review of the logs and complete its investigation. The financing round had already taken place by that time," he said.
"I didn't know there had been an Autopilot incident at the time of the fundraising," Mr. Musk said in an interview. "What we told NHTSA [on May 16] was just that somebody died -- it wasn't that there was an Autopilot incident. I also don't think it's material, but I didn't know about it."
Tesla on June 30 publicly disclosed the May 7 crash in a company blog post and said that Autopilot was in use at the time of the accident. Auto-safety regulators the same day disclosed their investigation of the crash.
Tesla shares rose nearly 2% on July 1, the first day of trading after auto-safety regulators disclosed their investigation. Tesla shares have continued to rise since then and closed at $224.78 Monday as the S&P 500 hit a record high. In after-hours trading, Tesla shares fell 1.4% to $221.60.
Securities experts say there is no clearly defined standard for whether the May 7 accident was "material" enough to require disclosure. Adam Pritchard, a law professor at the University of Michigan and former SEC attorney, said he would be "very skeptical" a court would find the fatal crash material and Tesla's failure to disclose it as a breach of securities laws. "The behavior of the stock price -- the fact that it bounced back very promptly -- most courts would say was fairly persuasive evidence that it was not material." Also in Tesla's favor, he said: "This is development-stage technology. There are going to be wrinkles along the way."
Erik Gerding, a law professor at the University of Colorado in Boulder, said he believes the disclosure issue presented a "tough judgment call" for Tesla executives. "The conservative approach is just to disclose it," he said, adding that the information could be material if it engenders skepticism about Tesla cars.
---
Mike Ramsey contributed to this article.
Credit: By Jean Eaglesham, Mike Spector and Susan Pulliam
Subject: Investigations; Fatalities; Traffic accidents & safety; Autonomous vehicles; SEC filing requirements
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: Securities & Exchange Commission; NAICS: 926150
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Jul 12, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1803017134
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1803017134?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Has No Plans to Disable Autopilot Feature in Its Cars; Tesla sees autopilot as lifesaving technology and plans to redouble efforts to educate customers on use
Author: Ramsey, Mike; Spector, Mike; Bach, Jonathan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 July 2016: n/a.
ProQuest document link
Abstract:
NHTSA's July 8 letter requests details of Tesla's own investigations and reconstruction of the May 7 incident. Since NHTSA disclosed the investigation in late June, there have been at least two crashes in which Tesla drivers say Autopilot was engaged.
Full text: Tesla Motors Inc. Chief Executive Elon Musk has no plans to disable the company's Autopilot function in the wake of a May crash of a Model S electric car using the technology, and the auto maker instead plans to redouble efforts to educate customers on how the system works.
Mr. Musk, in an interview, said the company is planning an explanatory blog post that highlights how Autopilot works and what drivers are expected to do after they activate it. "A lot of people don't understand what it is and how you turn it on," Mr. Musk said.
Tesla's co-founder pushed hard to launch the Autopilot feature as soon as possible because "we knew we had a system that on balance would save lives." While many auto makers offer systems that rely on automatic braking, steering assist or adaptive cruise control to aid drivers, Tesla's system steers the car more actively than similar systems and the company has marketed it more aggressively.
The safety of Tesla's Autopilot is under scrutiny in the wake of a May 7 crash in Florida that killed 40-year-old Joshua Brown, a Model S owner who was using the self-driving system at the time of the accident. The National Highway Traffic Safety Administration in June said it would investigate the crash , the first known fatality connected to the Autopilot system.
NHTSA on Tuesday disclosed a nine-page letter requesting documents and details of additional crashes involving Tesla's Autopilot as part of its ongoing probe. Regulators are homing in on emergency braking and forward-collision warning systems that allegedly didn't respond as expected before the May 7 crash.
A spokesman for the auto-safety regulator characterized the July 8 request as a standard step and said "NHTSA has not made any determination about the presence or absence of a defect in the subject vehicles."
Tesla confirmed the company received the letter and said it is cooperating.
In its letter to Tesla, the agency included a questionnaire seeking details on Autopilot's design and engineering, and reports of crashes , deaths, injuries or other claims related to the technology.
Mr. Brown's crash "calls for an examination of the design and performance of any driving aids in use," regulators said in an earlier document opening their probe. Tesla responses to some questions from the more recent information request are due July 29, while others are due Aug 26.
Tesla called the Autopilot function a beta feature when it launched it last year and designed it so that the system is off by default until a driver activates it. "It says beta specifically so people do not become complacent," Mr. Musk said. He said disclaimers provided to drivers are "written in super plain language." Some customers have said Tesla's warnings should be clearer and more prominent, and that Autopilot didn't perform as they expected before crashes.
The company issued some data related to Autopilot when the NHTSA preliminary investigation was disclosed nearly two weeks ago. The Palo Alto, Calif., auto maker said the May 7 accident was the first fatal crash in more than 130 million miles driven with Autopilot since the system made its debut in October. The car's system failed to distinguish the truck's white trailer from a bright sky, so the vehicle didn't brake, Tesla said. The Autopilot system allows cars to drive themselves under certain circumstances, though Tesla warns motorists that the technology doesn't make vehicles autonomous and that they should remain engaged behind the wheel.
NHTSA's July 8 letter requests details of Tesla's own investigations and reconstruction of the May 7 incident.
Since NHTSA disclosed the investigation in late June, there have been at least two crashes in which Tesla drivers say Autopilot was engaged.
The most recent example is of a driver of a Tesla Model X SUV who told local authorities the feature was active when the vehicle crashed into railing wires along the side of Montana State Highway 2 near Whitehall Saturday.
The driver was en route from Seattle to Yellowstone National Park when he traded Interstate 90 for the rural stretch of highway, according to Montana Highway Patrolman Jade Shope. The Model X hit the railing and traveled for 200 feet before moving back onto the roadway, Trooper Shope said. It is unclear if the driver had his hands on the wheel when the accident occurred, he said.
A Tesla spokeswoman said the car had its autosteer feature enabled and that data suggests the driver's hands weren't on the steering wheel. Failing to periodically place hands on the steering wheel violates terms drivers agree to when enabling the feature, the Tesla spokeswoman said. The technology reminded the driver to put his hands on the wheel shortly before the crash, she said. Tesla advises against using autosteer on high speeds or undivided roads such as the one in the Montana crash, she said.
An earlier incident involved Albert Scaglione, of Farmington Hills, Mich., who was driving outside Pittsburgh July 1. He recalls crashing his Model X into a guardrail on the Pennsylvania Turnpike.
"We were on Autopilot," Mr. Scaglione told The Wall Street Journal on Tuesday. He said he was hospitalized for a few days and was in two different trauma centers. Tesla said last week it had "no reason to believe that Autopilot had anything to do with this accident," based on information it had at the time. The auto maker said it hadn't received data about the vehicle's controls, possibly due to a damaged antenna.
Mr. Scaglione said he is waiting for the black box results from Tesla and NHTSA before speaking further on the matter.
Pennsylvania State Police cited Mr. Scaglione for careless driving and failing to safely stay in his traffic lane, said Cpl. Adam Reed.
Write to Mike Ramsey at michael.ramsey@wsj.com and Mike Spector at mike.spector@wsj.com
Related
* Tesla's Autopilot Vexes Some Drivers, Even Its Fans (July 6)
* Tesla's 'Autopilot' Flew Under Regulators' Oversight (July 2)
* Fatal Crash May Slow Advance of Self-Driving Cars (July 1)
* Tesla Draws Scrutiny After Autopilot Linked to Death (June 30)
Credit: By Mike Ramsey, Mike Spector and Jonathan Bach
Subject: Traffic accidents & safety; Fatalities; Automobile safety; Vehicles; Automobile drivers
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 12, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1803219985
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1803219985?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Will Tesla Be Toyota-ed? Joshua Brown's 'self-driving' crash was one more example of distracted driving.
Author: Jenkins, Holman W, Jr
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 July 2016: n/a.
ProQuest document link
Abstract:
In 1995, an auto-industry magazine asked a now-familiar question: "In an accident, who's at fault--the driver or the driving machine?" In those days the subject was intelligent cruise control, the kind that slows and even stops when the traffic does the same, then just arriving on Japanese and European luxury models, though the U.S. liability system would delay its appearance on these shores. French researchers three years ago showed that intelligent cruise control can increase driver drowsiness and slow reaction time--that is, a system designed to reduce driver workload and driver error can also increase driver error.
Full text: In 1995, an auto-industry magazine asked a now-familiar question: "In an accident, who's at fault--the driver or the driving machine?"
In those days the subject was intelligent cruise control, the kind that slows and even stops when the traffic does the same, then just arriving on Japanese and European luxury models, though the U.S. liability system would delay its appearance on these shores. Such innovations by now have proved a mixed bag: French researchers three years ago showed that intelligent cruise control can increase driver drowsiness and slow reaction time--that is, a system designed to reduce driver workload and driver error can also increase driver error.
Tesla's "Autopilot" feature adds a modicum of lane-keeping to the repertoire but basically is cruise control. Tesla even calls the function that Joshua Brown was using at the time of his accident "Traffic-Aware Cruise Control" and warns a driver to keep his hands on the wheel and be ready to take over at a moment's notice. What's more, Brown's accident could have happened in numerous other models--Audi, Cadillac, Mercedes, BMW, Volvo--some of which introduced similar features before Tesla did.
Alas, Brown was a typical Tesla customer--a techie, an enthusiast, an early adopter, posting videos of his car doing its self-driving tricks while he engaged in Tesla-unapproved distracting activities. Just a week after his fatal crash in Florida but a month before it became widely publicized another Tesla owner posted a video showing his car on Autopilot smashing into a parked van. The driver admitted: "Yes, I could have reacted sooner, but when the car slows down correctly 1,000 times, you trust it to do it the next time. . . My bad."
Brown's death is being defined, dubiously, as the first in a self-driving car. It set off a verbal war between Fortune magazine and Tesla founder Elon Musk over whether Tesla should have disclosed the fatality before a recent sale of stock to the public. Yet, in essence, Brown's crash is one more case of distracted driving. If he had been paying attention, he would have noticed the tractor-trailer crossing his path. As Donald Redelmeier of the University of Toronto once put it, "the main factor in most motor vehicle collisions is a driver's limitations in attention, rather than dexterity."
One category of common accident provides an ironic exception--sudden-acceleration accidents. When a driver crashes into a building, it's usually because he stepped on the gas instead of the brake--a failure of dexterity. By one estimate, such crashes kill 500 people a year in the U.S. Blogger Newell Nussbaumer of Buffalo, N.Y., ("world capital of drivers crashing into buildings") has documented and mapped 150 incidents in his city alone. Nor is it Trumpian to note that women are inordinately prone. A 2012 federal study finds a "striking overrepresentation of females in pedal misapplication crashes."
So when a woman last month crashed her five-day-old Tesla Model X into a nail salon and blamed the car, Tesla promptly ran out a statement saying Tesla's own data showed "the vehicle was traveling at 6 mph when the accelerator pedal was abruptly increased to 100%."
That likely will be the end of it. This is one Tesla crash the media has not dwelled on. Yet notice that similar defenses were uniformly ignored a few years back in the phony furor over supposedly self-accelerating Toyotas. Shameful hearings were held in Congress. Toyota was shaken down for billions in legal settlements and recall costs. Brutally, California politicians used the episode to jimmy a large cash infusion out of Toyota for the benefit of Tesla, enabling Mr. Musk to float his 2010 IPO a few weeks later.
OK, nobody in the U.S. auto industry covered himself in glory at the time. Toyota is Japanese. Washington had just bailed out the U.S. auto sector. Yet the Toyota episode left a bizarre proto-precedent in its wake. When computerized cars crash (all cars are computerized nowadays) and the driver says he wasn't at fault, the auto maker must prove a negative. It must prove that an undetectable software flaw didn't cause the crash. This means, in effect, not much may stand between Brown's heirs and a claim he actually did hit the brakes and the car ignored his inputs (and failed to record them).
The Brown crash is already being cited by critics of Mr. Musk's plan to merge Tesla with his other struggling company, Solar City. This deal serves two observable purposes. To the political complaint that Tesla gets subsidies to sell coal-powered cars, Mr. Musk can say, "We're selling solar-powered cars," even if few customers actually buy Solar City panels to charge their Tesla vehicles.
More important, the Musk mystique that keeps Tesla stock afloat is threatened by his solar company's unraveling. As finance professor Craig Pirrong of the University of Houston points out in his blog: A Solar City bankruptcy "would undermine Musk's image as a visionary genius and business colossus. This image is vital to keeping Musk, Inc. going."
Bottom line: One overhyped car crash is not a good reason to question Mr. Musk's business model, especially his absurd dependence on government favoritism. There are much better reasons.
Credit: By Holman W. Jenkins, Jr.
Subject: Traffic accidents & safety; Fatalities
Location: California United States--US
Company / organization: Name: University of Toronto; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 12, 2016
column: Business World
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1803279890
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1803279890?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Won't Cut Autopilot
Author: Ramsey, Mike; Spector, Mike; Bach, Jonathan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]13 July 2016: B.1.
ProQuest document link
Abstract:
NHTSA's July 8 letter requests details of Tesla's own investigations and reconstruction of the May 7 incident. Since NHTSA disclosed the investigation in late June, there have been at least two crashes in which Tesla drivers say Autopilot was engaged.
Full text: Tesla Motors Inc. Chief Executive Elon Musk has no plans to disable the company's Autopilot function in the wake of a May crash of a Model S electric car using the technology, and the auto maker instead plans to redouble efforts to educate customers on how the system works.
Mr. Musk, in an interview, said the company is planning an explanatory blog post that highlights how Autopilot works and what drivers are expected to do after they activate it. "A lot of people don't understand what it is and how you turn it on," Mr. Musk said.
Tesla's co-founder pushed hard to launch the Autopilot feature as soon as possible because "we knew we had a system that on balance would save lives." While many auto makers offer systems that rely on automatic braking, steering assist or adaptive cruise control to aid drivers, Tesla's system steers the car more actively than similar systems and the company has marketed it more aggressively.
The safety of Tesla's Autopilot is under scrutiny after a May 7 crash in Florida that killed 40-year-old Joshua Brown, a Model S owner who was using the self-driving system at the time of the accident. The National Highway Traffic Safety Administration said in June that it would investigate the crash, the first known fatality connected to the Autopilot system.
NHTSA on Tuesday disclosed a nine-page letter requesting documents and details of additional crashes involving Tesla's Autopilot as part of its continuing probe. Regulators are homing in on emergency braking and forward-collision warning functions that allegedly didn't respond as expected before the May 7 crash.
A spokesman for the auto-safety regulator characterized the July 8 request as a standard step and said "NHTSA has not made any determination about the presence or absence of a defect in the subject vehicles."
Tesla confirmed the company received the letter and said it is cooperating.
In its letter to Tesla, the agency included a questionnaire seeking details on Autopilot's design and engineering, and reports of crashes, deaths, injuries or other claims related to the technology.
Mr. Brown's crash "calls for an examination of the design and performance of any driving aids in use," regulators said in an earlier document opening their probe. Tesla responses to some questions from the more recent information request are due July 29, while others are due Aug 26.
Tesla called the Autopilot function a beta feature when it launched it last year and designed it so that the system is off by default until a driver activates it. "It says beta specifically so people do not become complacent," Mr. Musk said. He said disclaimers provided to drivers are "written in super-plain language." Some customers have said Tesla's warnings should be clearer and more prominent, and that Autopilot didn't perform as they expected before crashes.
The company issued some data related to Autopilot when the NHTSA preliminary investigation was disclosed nearly two weeks ago. The Palo Alto, Calif., auto maker said the May 7 accident was the first fatal crash in more than 130 million miles driven with Autopilot since its debut in October.
The car's system failed to distinguish the truck's white trailer from a bright sky, so the vehicle's automatic emergency brake didn't activate, Tesla said. The Autopilot system allows cars to drive themselves under certain circumstances, though Tesla warns motorists that the technology doesn't make vehicles autonomous and that they should remain engaged behind the wheel.
NHTSA's July 8 letter requests details of Tesla's own investigations and reconstruction of the May 7 incident.
Since NHTSA disclosed the investigation in late June, there have been at least two crashes in which Tesla drivers say Autopilot was engaged.
The most recent example is of a driver of a Tesla Model X SUV who told local authorities the feature was active when the vehicle crashed into railing wires along the side of Montana State Highway 2 near Whitehall on Saturday.
The driver was en route from Seattle to Yellowstone National Park, according to Montana Highway Patrolman Jade Shope. The Model X hit the railing and traveled for 200 feet before moving back on to the roadway, Trooper Shope said. It is unclear whether the driver had his hands on the wheel when the accident occurred, he said.
A Tesla spokeswoman said the car had its autosteer feature enabled and that data suggests the driver's hands weren't on the steering wheel. Failing to periodically place hands on the steering wheel violates terms drivers agree to when enabling the feature, the Tesla spokeswoman said. The technology reminded the driver to put his hands on the wheel shortly before the crash, she said. Tesla advises against using autosteer on high speeds or undivided roads such as the one in the Montana crash, she said.
An earlier incident involved Albert Scaglione, of Farmington Hills, Mich., who was driving outside Pittsburgh on July 1. He recalls crashing his Model X into a guardrail on the Pennsylvania Turnpike.
"We were on Autopilot," Mr. Scaglione told The Wall Street Journal on Tuesday. He said he was hospitalized for a few days and was in two different trauma centers. Tesla said last week it had "no reason to believe that Autopilot had anything to do with this accident," based on information it had at the time. The auto maker said it hadn't received data about the vehicle's controls, possibly due to a damaged antenna.
Mr. Scaglione said he is waiting for the black box results from Tesla and NHTSA before speaking further on the matter. Pennsylvania State Police cited Mr. Scaglione for careless driving and failing to safely stay in his traffic lane, said Cpl. Adam Reed.
Credit: By Mike Ramsey, Mike Spector and Jonathan Bach
Subject: Traffic accidents & safety; Fatalities; Electric vehicles; Automobile safety; Autonomous vehicles
People: Musk, Elon
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Jul 13, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1803416189
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1803416189?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Reduces Starting Price of Its Model X SUV; Electric auto maker to offer a more limited range version called the 60D
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 July 2016: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. introduced a limited-range version of its Model X sport-utility vehicle that is priced starting at $75,200 in a bid to capture new buyers who can't afford its higher-end models.
Full text: Tesla Motors Inc. introduced a limited-range version of its Model X sport-utility vehicle that is priced starting at $75,200 in a bid to capture new buyers who can't afford its higher-end models.
The new Model X 60D has a battery pack rated at 60 kilowatt-hours, giving it 200 miles of driving range. Previously, the least expensive Model X was the $84,200 and up 75D. The most expensive Model X has a 90 kwh pack and 250 miles of range and starts at $116,700, including delivery.
Tesla recently lowered the starting price of its sedan , the Model S, to $67,200, roughly $5,000 less than the previously least-expensive model, also offering a 60 kwh battery.
At the time, Tesla said it was hoping to offer customers who were interested in buying the forthcoming Model 3 sedan , expected to start at $35,000, a less expensive Model S that could allow them to buy a car immediately. This came after people placed nearly 400,000 reservations for the Model 3, due out in the second half of next year.
Tesla's price cut comes as the company is trying to get a surge of sales in the second half of the year to reach its goal of selling at least 80,000 vehicles this year. a disappointing second quarter
First-half sales fell short of 30,000 after a disappointing second quarter where deliveries were 15% lower than the company had projected.
Tesla has struggled with ramping up production on the Model X, which made its debut in the fall of 2015. Tesla had expected the new SUV to sell in equal numbers to its sedan, the Model S, but so far deliveries of the vehicle have been less than half those of the car.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Price cuts
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 13, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1803532247
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1803532247?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Reduces Starting Price of Its Model X SUV; Electric auto maker to offer a more limited range version called the 60D
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 July 2016: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. introduced a limited-range version of its Model X sport-utility vehicle that is priced starting at $75,200 in a bid to capture new buyers who can't afford its higher-end models.
Full text: Tesla Motors Inc. introduced a limited-range version of its Model X sport-utility vehicle that is priced starting at $75,200 in a bid to capture new buyers who can't afford its higher-end models.
The new Model X 60D has a battery pack rated at 60 kilowatt-hours, giving it 200 miles of driving range. Previously, the least expensive Model X was the $84,200 and up 75D. The most expensive Model X has a 90 kwh pack and 250 miles of range and starts at $116,700, including delivery.
Tesla recently lowered the starting price of its sedan , the Model S, to $67,200, roughly $5,000 less than the previously least-expensive model, also offering a 60 kwh battery.
At the time, Tesla said it was hoping to offer customers who were interested in buying the forthcoming Model 3 sedan , expected to start at $35,000, a less expensive Model S that could allow them to buy a car immediately. This came after people placed nearly 400,000 reservations for the Model 3, due out in the second half of next year.
Tesla's price cut comes as the company is trying to get a surge of sales in the second half of the year to reach its goal of selling at least 80,000 vehicles this year. a disappointing second quarter
First-half sales fell short of 30,000 after a disappointing second quarter where deliveries were 15% lower than the company had projected.
Tesla has struggled with ramping up production on the Model X, which made its debut in the fall of 2015. Tesla had expected the new SUV to sell in equal numbers to its sedan, the Model S, but so far deliveries of the vehicle have been less than half those of the car.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Price cuts
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 14, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1803657209
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1803657209?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Tesla Motors Cuts SUV Pricing to Stir Demand
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 July 2016: B.3.
ProQuest document link
Abstract:
First-half sales fell short of 30,000 after a disappointing second quarter where deliveries were 15% lower than the company had projected.
Full text: Tesla Motors Inc. introduced a limited-range version of its Model X sport-utility vehicle that is priced starting at $75,200 in a bid to capture buyers who couldn't afford its higher-end models.
The new Model X 60D has a battery pack rated at 60 kilowatt-hours, giving it 200 miles of driving range. Previously, the least expensive Model X was the $84,200-and-up 75D. The most expensive Model X has a 90-kwh pack and 250 miles of range and starts at $116,700, including delivery.
Tesla's price cut comes as the company tries to boost sales to reach its goal of selling at least 80,000 vehicles this year. First-half sales fell short of 30,000 after a disappointing second quarter where deliveries were 15% lower than the company had projected.
Tesla has struggled with ramping up output of the Model X.
Credit: By Mike Ramsey
Subject: Price cuts
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Jul 14, 2016
Publisher: Dow Jones & Comp any Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1803674092
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1803674092?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla CEO Elon Musk Expects SolarCity Acquisition Vote to Pass by Two-Thirds Majority; Musk says he has been talking with large investors
Author: Ramsey, Mike; Pulliam, Susan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 July 2016: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. Chief Executive Elon Musk said he expects a supermajority of shareholders to support the electric-car company's proposed combination with SolarCity Corp. despite investor skepticism about the planned deal.
Full text: Tesla Motors Inc. Chief Executive Elon Musk said he expects a supermajority of shareholders to support the electric-car company's proposed combination with SolarCity Corp. despite investor skepticism about the planned deal.
In an interview, Mr. Musk said he would include details of the combination in a new "master plan" he intends to publish as early as this week.
Mr. Musk's proposed combination of the two companies--both of which count him as the largest shareholder--was first presented to investors in late June, but has been overshadowed by the disclosure of a traffic fatality connected to the Autopilot feature in Tesla's Model S sedan. Regulators are investigating the crash amid scrutiny of Tesla's marketing of the self-driving features.
Mr. Musk's master plan has been the subject of speculation in the days since he announced on his Twitter account that it was coming. In an email, Mr. Musk said the updated blueprint will include an explanation of how Tesla's SolarCity acquisition would help transition the car maker into an energy company specializing in using batteries to generate and store power.
Tesla is proposing to pay $26.50 to $28.50 a share to acquire SolarCity, a premium of as much as 30% based on its June 21 stock price. SolarCity's board and advisers are currently reviewing the offer.
Mr. Musk has been talking with Tesla's largest investors, including Fidelity Investments and other big mutual funds, urging them to support the acquisition. Mr. Musk is barred from voting on the deal over concerns of a conflict of interest. Fidelity declined to comment.
"The most informed investors are highly supportive of the transaction," Mr. Musk said. As of last week, he said he had "yet to talk to an investor after I have fully explained the situation and not had them support it."
He added, "Most just didn't understand how bringing together a car and a solar company made sense from a product standpoint."
Mr. Musk said he expects "the end result will be a supermajority, a two-thirds majority" in favor, even though such a supermajority isn't required for approval.
Mr. Musk's optimism contrasts the skepticism such the deal first faced as Tesla's stock fell 10% after the initial announcement. Initial reactions included a concern that SolarCity's money-losing panel business would weaken Tesla and distract management as the auto maker works to bring out a more affordable electric car called the Model 3 in 2017.
SolarCity shares have rebounded, trading at $26.26 Tuesday evening. The higher price suggests investors are becoming more confident that the deal will go through. Investors still view the deal with "some risk and skepticism but there seems to be more confidence in the last several days," says Thomas Burnett, head of research at Wall Street Access, a brokerage firm that provides research to investors who wager on mergers and acquisitions.
Mr. Musk isn't the only insider recusing himself from voting on the deal. Mr. Musk's cousins Lyndon Rive, CEO of SolarCity and Peter Rive, the chief technical officer of SolarCity--as well as Tesla board member Antonio Gracias, who also sits on the SolarCity board--have said they won't vote on the deal.
JB Straubel, chief technical officer of Tesla, also will recuse himself. A date for a vote hasn't been set. All bowed out from voting out of conflict-of-interest considerations.
That will leave a few of the largest mutual funds with an outsize influence on whether the deal goes through.
The top five institutional holders of Tesla, including Fidelity, Baillie Gifford, T. Rowe Price, BMO Global Asset Management and Vanguard, made up more than 30% of the shares outstanding at the end of March. Fidelity, Vanguard and BMO are also among the top five holders of SolarCity shareholders, making them more likely to approve the deal, Mr. Burnett says.
Baillie Gifford, T. Rowe Price, and Vanguard all declined to comment. BMO didn't immediately comment.
"This common ownership is something Tesla is going to take advantage of," Mr. Burnett said. It "shows the institutional belief in Elon and his various ventures."
In commentary at the end of March, Fidelity OTC Fund manager, Gavin Baker, said: "We remain fans" of "potential future partnerships" and said he saw "fruitful synergies between say, Tesla and SolarCity."
Cassandra Sweet contributed to this article.
Write to Susan Pulliam at susan.pulliam@wsj.com
Credit: By Mike Ramsey and Susan Pulliam
Subject: Automobile industry; Shareholder voting; Stock prices; Conflicts of interest; Investments; Voting rights; Skepticism
Company / organization: Name: Twitter Inc; NAICS: 519130; Name: Fidelity Investments; NAICS: 523120, 523920, 525110, 525910; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 19, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1805321023
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1805321023?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla CEO Expects SolarCity Acquisition Vote to Pass by Two-Thirds Majority
Author: Ramsey, Mike; Pulliam, Susan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 July 2016: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. Chief Executive Elon Musk said he expects a super majority of shareholders to support the electric car company's proposed combination with SolarCity Corp., in which Silver Lake Kraftwerk has a stake, despite investor skepticism about the planned deal.
Full text: Tesla Motors Inc. Chief Executive Elon Musk said he expects a super majority of shareholders to support the electric car company's proposed combination with SolarCity Corp., in which Silver Lake Kraftwerk has a stake, despite investor skepticism about the planned deal.
In an interview, Mr. Musk said he would include details of the combination in a new "master plan" he intends to publish as early as this week.
Mr. Musk's proposed combination of the two companies--both of which count him as the largest shareholder--was first presented to investors in late June, but has been overshadowed by the disclosure of a traffic fatality connected to the Autopilot feature in Tesla's Model S sedan. Regulators are investigating the crash amid scrutiny of Tesla's marketing of the self-driving features.
Mr. Musk's master plan has been the subject of speculation in the days since he announced on his Twitter account that it was coming. In an email, Mr. Musk said the updated blueprint will include an explanation of how Tesla's SolarCity acquisition would help transition the car maker into an energy company specializing in using batteries to generate and store power.
Tesla is proposing to pay $26.50 to $28.50 a share to acquire SolarCity, a premium of as much as 30% based on its June 21 stock price. SolarCity's board and advisers are currently reviewing the offer.
Mr. Musk has been talking with Tesla's largest investors, including Fidelity Investments and other big mutual funds, urging them to support the acquisition. Mr. Musk is barred from voting on the deal over concerns of a conflict of interest. Fidelity declined to comment.
"The most informed investors are highly supportive of the transaction," Mr. Musk said. As of last week, he said he had "yet to talk to an investor after I have fully explained the situation and not had them support it."
He added, "Most just didn't understand how bringing together a car and a solar company made sense from a product standpoint."
Mr. Musk said he expects "the end result will be a super majority, a two-thirds majority" in favor, even though such a super majority isn't required for approval.
Mr. Musk's optimism contrasts the skepticism such the deal first faced as Tesla's stock fell 10% after the initial announcement. Initial reactions included a concern that SolarCity's money-losing panel business would weaken Tesla and distract management as the auto maker works to bring out a more affordable electric car called the Model 3 in 2017.
SolarCity shares have rebounded, trading at $26.26 Tuesday evening. The higher price suggests investors are becoming more confident that the deal will go through. Investors still view the deal with "some risk and skepticism but there seems to be more confidence in the last several days," says Thomas Burnett, head of research at Wall Street Access, a brokerage firm that provides research to investors who wager on mergers and acquisitions.
Mr. Musk isn't the only insider recusing himself from voting on the deal. Mr. Musk's cousins Lyndon Rive, CEO of SolarCity and Peter Rive, the chief technical officer of SolarCity--as well as Tesla board member Antonio Gracias, who also sits on the SolarCity board--have said they won't vote on the deal.
JB Straubel, chief technical officer of Tesla will also recuse himself. A date for a vote hasn't been set. All bowed out from voting out of conflict-of-interest considerations.
That will leave a few of the largest mutual funds with an outsize influence on whether the deal goes through.
The top five institutional holders of Tesla, including Fidelity, Baillie Gifford, T. Rowe Price, BMO Global Asset Management and Vanguard, made up more than 30% of the shares outstanding at the end of March. Fidelity, Vanguard and BMO are also among the top five holders of SolarCity shareholders, making them more likely to approve the deal, Mr. Burnett says.
Baillie Gifford, T. Rowe Price, and Vanguard all declined to comment. BMO didn't immediately comment.
"This common ownership is something Tesla is going to take advantage of, " Mr. Burnett said. It "shows the institutional belief in Elon and his various ventures."
In commentary at the end of March, Fidelity OTC Fund manager, Gavin Baker, said: "We remain fans" of "potential future partnerships" and said he saw "fruitful synergies between say, Tesla and SolarCity."
Silver Lake Kraftwerk, the growth-equity arm of technology investor Silver Lake, initially invested in SolarCity in 2012 and sold its stake the following year after the company went public in late 2012. Silver Lake Kraftwerk agreed to invest $100 million in the company in 2015.
-Cassandra Sweet contributed to this article.
Write to Susan Pulliam at susan.pulliam@wsj.com
Credit: By Mike Ramsey and Susan Pulliam
Subject: Automobile industry; Shareholder voting; Stock prices; Conflicts of interest; Investments; Voting rights; Skepticism
Company / organization: Name: Twitter Inc; NAICS: 519130; Name: Silver Lake Kraftwerk; NAICS: 523910; Name: Fidelity Investments; NAICS: 523120, 523920, 525110, 525910; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 19, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1805321211
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1805321211?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Elon Musk Unveils Plans for New Tesla Vehicle Types; Blueprint also includes a plan for customers to share autonomous Teslas
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 July 2016: n/a.
ProQuest document link
Abstract:
Mr. Musk's ambition to add a small SUV and a pickup truck could help the auto maker better participate in a light truck market that is growing and now represents nearly 60% of automobiles sold in the U.S. The retooling of the product plan to include heavier vehicles will require a shift in focus and capital.
Full text: Tesla Motors Inc. Chief Executive Elon Musk outlined a new model for vehicle sharing and disclosed plans for several new electric vehicles, including much heavier trucks requiring significant capital and staffing at a time when the company is losing money.
Mr. Musk, releasing an updated strategy in a blog post on Tesla's website on Wednesday, said electric versions of a pickup truck, small sport-utility vehicle, large over-the-road truck and bus-type vehicle are planned for over the next several years. Those vehicles are slated to follow the more affordable Model 3 due in 2017.
The blueprint also includes a plan for customers being able to share autonomous cars. Using a mobile app, owners could earn income by opening up their car up for others to use.
The master plan is the latest in a series of ambitious goals Mr. Musk has given for Tesla and other businesses he runs or controls. Operating for more than a decade, the Palo Alto, Calif., electric-car maker has consistently grown volumes in recent years but posted losses.
Jessica Caldwell, analyst for auto research website Edmunds.com, said the plan was audacious. "The plan sounds overly ambitious for now, especially considering that there are already doubts about whether Tesla can meet its goals for the next two years."
In addition to launching the Model 3, the company is accelerating investments needed to aim for volumes of 500,000 annually--a significant increase over the 50,000 sold last year. Mr. Musk's ambition to add a small SUV and a pickup truck could help the auto maker better participate in a light truck market that is growing and now represents nearly 60% of automobiles sold in the U.S.
The retooling of the product plan to include heavier vehicles will require a shift in focus and capital. Tesla thus far has focused on building lighter vehicles from a factory it runs in California and is launching a large battery plant in Nevada.
Mr. Musk said the heavy-duty trucks and buses are "in the early stages of development at Tesla and should be ready for unveiling next year."
The development of heavier vehicles will "deliver a substantial reduction in the cost of cargo transport," Mr. Musk said, but it will also be costly. Tesla has had to repeatedly tap capital markets to continue operating.
Among Mr. Musk's recent plans is a move to combine Tesla with SolarCity Corp., forming an energy company that sells various products. Under his new plan presented Wednesday evening, customers will be able to buy batteries and solar panels at one stop.
Mr. Musk's proposed combination of the two companies--both of which count him as the largest shareholder--was first presented to investors in late June, but has been overshadowed by the disclosure of a traffic fatality connected to the Autopilot feature in Tesla's Model S sedan. Regulators are investigating the crash amid scrutiny of Tesla's marketing of the self-driving features.
Tesla is proposing to pay $26.50 to $28.50 a share to acquire SolarCity, a premium of as much as 30% based on its June 21 stock price. SolarCity's board and advisers are currently reviewing the offer.
Mr. Musk has been meeting with Tesla's largest investors, including Fidelity Investments and other big mutual funds, urging them to support the acquisition. Mr. Musk is barred from voting on the deal over concerns of a conflict of interest. Fidelity declined to comment.
"The most informed investors are highly supportive of the transaction," Mr. Musk said. As of last week, he said he had "yet to talk to an investor after I have fully explained the situation and not had them support it."
Mr. Musk said the company would work on vehicle autonomy and said he anticipates that owners will be able to "share" a Tesla vehicle and have it earn income picking up people when the owner wasn't using it.
"You will also be able to add your car to the Tesla shared fleet just by tapping a button on the Tesla phone app and have it generate income for you while you're at work or on vacation, significantly offsetting and at times potentially exceeding the monthly loan or lease cost," he said.
The CEO's new master plan focused squarely on products and technology and steered clear of outlining a strategy for individual markets, such as China or Europe. It also contained no specific financial targets.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Automobile industry; Vehicles; Investments
Location: California
Company / organization: Name: Edmunds.com; NAICS: 511140; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 21, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1805655327
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1805655327?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Tesla Plans to Release Pickup Truck, SUV
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]21 July 2016: B.3.
ProQuest document link
Abstract:
Tesla Motors Inc. is planning to roll out a pickup truck, small sport-utility, large over-the-road truck and bus-type vehicle over the next several years, according to a strategy plan released Wednesday by Chief Executive Elon Musk.
Full text: Tesla Motors Inc. is planning to roll out a pickup truck, small sport-utility, large over-the-road truck and bus-type vehicle over the next several years, according to a strategy plan released Wednesday by Chief Executive Elon Musk.
"We believe the Tesla Semi will deliver a substantial reduction in the cost of cargo transport, while increasing safety and making it really fun to operate," Mr. Musk said.
Mr. Musk unveiled the plan in a blog post on Tesla's website. In the plan, he also imagined a combined ownership of SolarCity Corp., where customers could buy solar panels and batteries in one stop.
"That they are separate at all, despite similar origins and pursuit of the same overarching goal of sustainable energy, is largely an accident of history," he said in the letter. "The time has come to bring them together."
Mr. Musk's proposed combination of the two companies -- both of which count him as the largest shareholder -- was first presented to investors in late June, but has been overshadowed by the disclosure of a traffic fatality connected to the Autopilot feature in Tesla's Model S sedan. Regulators are investigating the crash amid scrutiny of Tesla's marketing of the self-driving features.
Tesla is proposing to pay $26.50 to $28.50 a share to acquire SolarCity, a premium of as much as 30% based on its June 21 stock price. SolarCity's board and advisers are currently reviewing the offer.
Mr. Musk has been meeting with Tesla's largest investors, including Fidelity Investments and other big mutual funds, urging them to support the deal. Mr. Musk is barred from voting on the deal over concerns of a conflict of interest. Fidelity declined to comment.
"The most informed investors are highly supportive of the transaction," Mr. Musk said. As of last week, he said he had "yet to talk to an investor after I have fully explained the situation and not had them support it."
Mr. Musk said the company would work on vehicle autonomy and forecast the ability to "share" a Tesla vehicle and have it earn income picking up people while the owner wasn't using it.
"You will also be able to add your car to the Tesla shared fleet just by tapping a button on the Tesla phone app and have it generate income for you while you're at work or on vacation, significantly offsetting and at times potentially exceeding the monthly loan or lease cost," he said.
Jessica Caldwell, analyst for auto research website Edmunds.com, said the plan was audacious. "The plan sounds overly ambitious for now, especially considering that there are already doubts about whether Tesla can meet its goals for the next two years."
Credit: By Mike Ramsey
Subject: Trucks; Sport utility vehicles; Automobile industry
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Jul 21, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1805706657
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1805706657?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Autopilot Crash Shouldn't Slow Self-Driving Development, Regulator Says; Head of National Highway Traffic Safety Administration says main objective is to reduce traffic fatalities
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 July 2016: n/a.
ProQuest document link
Abstract:
The head of the National Highway Traffic Safety Administration signaled U.S. regulators want self-driving technologies to progress quickly to market despite a recent fatality connected to Tesla Motors Inc.'s Autopilot technology .
Full text: The head of the National Highway Traffic Safety Administration signaled U.S. regulators want self-driving technologies to progress quickly to market despite a recent fatality connected to Tesla Motors Inc.'s Autopilot technology .
Mark Rosekind, speaking on Friday at a conference in Detroit, said the auto industry "cannot wait for perfect" when it comes to how quickly it deploys technology that makes cars safer. Tesla's Autopilot technology has been criticized because it had a number of vulnerabilities when it was released, potentially leading drivers to put too much faith in that technology.
Tesla has said Autopilot is a proven lifesaving feature and that the company worked to inform drivers of Autopilot's shortcomings since launching it in 2015. Other auto makers, including General Motors Co., have held back similar technology because of concerns over the ability to validate it.
Mr. Rosekind declined to address the May fatality involving Autopilot because NHTSA is investigating the incident. The agency's main objective, he said, is to reduce traffic fatalities, which rose to 35,000 in 2015, an increase of 8% compared with 2014.
"We should be desperate for anything we can find to save people's lives," Mr. Rosekind said. Tesla Chief Executive Elon Musk has said his company would have been negligent to withhold its Autopilot system--which can steer, brake and accelerate autonomously under certain conditions--from the cars it sells.
The auto industry and tech giants, including Alphabet Inc., are racing to perfect autonomous vehicles that take the driver--and errors attributed to humans--out of the equation. While mass-market adoption is several years away, according to most companies, these types of vehicles are being increasingly tested on public roads.
Meanwhile, more mainstream car and light truck manufacturers are adding increasing amounts of technology to assist drivers with emergency braking, parking and steering.
Write to John D. Stoll at john.stoll@wsj.com
Previous Coverage
* Tesla Has No Plans to Disable Autopilot Feature in Its Cars (July 12)
* Tesla Draws Scrutiny After Autopilot Feature Linked to a Death (June 30)
Credit: By John D. Stoll
Subject: Fatalities; Traffic accidents & safety
Location: United States--US Detroit Michigan
People: Musk, Elon
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Alphabet Inc; NAICS: 551114; Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 22, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1806103347
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1806103347?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla: Not a Moment to Lose; A changing world means Tesla Motors can no longer afford production delays
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 July 2016: n/a.
ProQuest document link
Abstract:
Daimler became the latest auto maker to indicate a growing emphasis on electric vehicles last week, joining Volkswagen and General Motors, among others.
Full text: The world is changing around Tesla Motors. That might complicate its attempt to enter the mass automobile market.
Tesla is set to formally unveil the Gigafactory , its new battery-manufacturing plant, in Nevada this week. A fully functioning plant is part of the effort to scale up production of the Model 3 sedan .
Strong demand for the Model 3 ranks as the company's most positive news this year. Tesla had received about 373,000 reservations as of May 15 .
But Tesla's lofty market valuation depends in large part on a successful Model 3 launch, set for late next year. And the factory's readiness for mass production is unclear. Tesla had spent less than one-fifth of a planned $2 billion on Gigafactory capital outlays through March 31.
Tesla's past struggles with production delays are well documented, but those problems didn't ding the stock price. One reason is that past delays affected ultraexpensive luxury cars, whose buyers generally had other means of transportation and were thus willing to wait for an envy-producing product.
Investors shouldn't count on such patience this time. Daimler became the latest auto maker to indicate a growing emphasis on electric vehicles last week, joining Volkswagen and General Motors, among others. Some of this competition will beat the Model 3 to market.
Meanwhile, that strong demand for the Model 3 is hardly set in stone. Consider that placing a Model 3 reservation requires only a refundable $1,000 deposit on a car set to cost $35,000 before tax incentives.
If the Model 3 is delayed, people might find alternatives. That wouldn't be good for the richly priced stock.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Automobile industry
Location: Nevada
Company / organization: Name: Volkswagen AG; NAICS: 336111, 336390; Name: Tesla Motors Inc; NAICS: 336999; Name: General Motors Corp; NAICS: 336111, 333415, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 24, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1806290635
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1806290635?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Races to Finish 'Gigafactory' in Time for Model 3 Rollout; CEO Elon Musk anticipates the new plant could be capable of producing a total of 105 gigawatt hours of battery cells by 2020
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 July 2016: n/a.
ProQuest document link
Abstract:
SPARKS, Nev.--Tesla Motors Inc. is scrambling to finish building its massive $5 billion battery factory here years ahead of schedule to meet demand for its coming cheaper sedan and provide power for new types of vehicles Chief Executive Elon Musk says are under development. Mr. Musk in recent weeks has laid out aggressive expansion plans for Tesla, including heavier vehicles and an energy-storage business that marries Tesla's battery business with SolarCity Corp.'s solar panels.
Full text: SPARKS, Nev.--Tesla Motors Inc. is scrambling to finish building its massive $5 billion battery factory here years ahead of schedule to meet demand for its coming cheaper sedan and provide power for new types of vehicles Chief Executive Elon Musk says are under development.
Tesla has doubled the amount of people constructing the "gigafactory," which sits on more than 3,000 acres near Reno. Now, 1,000 workers build seven days a week on two shifts in an effort to start churning out lithium-ion cells by early 2017.
"We have to be ready with cell and pack production well ahead of vehicle production," JB Straubel, Tesla's chief technical officer and co-founder, said during a walk-through of the factory. "We're accelerating our construction plans and accelerating our planned ramp up of cell production."
The goal is to have the factory operational before the launch next year of the $35,000 Model 3 sedan, which is about half the base price of the Model S. Tesla opened reservations for the Model 3 earlier this year, and strong demand led Mr. Musk to pull a 500,000 sales target ahead two years to 2018. He also raised $1.7 billion through a stock offering in hopes of speeding up battery production expected to lower the cost of the batteries for electric vehicles.
As of now, the gigafactory's structure is less than one-sixth the size of what the final building is expected to occupy. Most exterior walls are temporary and can be relocated. Already finished is a four-story rectangular portion of the facility, housing 1.9 million square feet of floor space.
Tesla already is building battery packs for its battery storage business there, but is importing the battery cells from Panasonic Corp. facilities in Japan.
Panasonic has committed up to $1.6 billion to the factory. Joe Taylor, chief executive of Panasonic North America, said the company is struggling to find qualified workers with manufacturing abilities. "We are running around like crazy hiring people." The Japanese electronics giant is handling the cell manufacturing and pulled forward installation of equipment.
Mr. Musk in recent weeks has laid out aggressive expansion plans for Tesla, including heavier vehicles and an energy-storage business that marries Tesla's battery business with SolarCity Corp.'s solar panels. Mr. Musk, chairman and largest shareholder of both companies, has proposed a $2.8 billion merger of Tesla and SolarCity.
The roof of the new factory will be covered in SolarCity's panels. A solar-panel field will be constructed nearby to provide additional power to the factory.
Once completed, Mr. Musk anticipates the new plant could be capable of producing a total of 105 gigawatt hours of battery cells by 2020, or enough to power 1.2 million Model S sedans--though up to one-third of those batteries are slated for stationary battery storage. About 50,000 Model S sedans were built in 2015.
The auto maker has struggled to build vehicles since it opened its Fremont, Calif., plant, suffering quality problems in addition to supply constraints. Problems building the Model X SUV have limited sales in 2016. Earlier this year, the auto maker lost both its chief of production and head of manufacturing.
Tesla earlier this month said that it had achieved regular levels of higher production and expected to produce 50,000 vehicles in the second half of 2016. Through the first six months it had delivered fewer than 30,000 vehicles.
Tesla's gigafactory will be the first ever to make a new format of battery--a 21/70, rather than the 18/650 that the auto maker uses today for the Model S and Model X. The latter cylinder-shaped battery is commonly used in portable electronics and has been used by Tesla since the beginning. The numbers stand for the width and length in millimeters.
Virtually all lithium-ion battery production today is in Asia, and efforts by the U.S. government to establish a domestic battery production industry have had mixed results. A factory operated by South Korea's LG Chem in Holland, Mich., has been successful, handling the battery for General Motors Co. vehicles. Mr. Musk last week signaled there would be even more demand from his battery factory. The company aims to introduce several more electric vehicles, including a small sport-utility vehicle, a light pickup truck, a heavy-duty truck and a bus.
Nevada has promised Tesla incentives that could be worth $1.3 billion over 20 years, including the construction of a highway that speeds travel from near Carson City to the industrial park where the factory is located.
"We think this has been a great decision and has really been to Nevada's benefit," Economic Development Director Steve Hill said. Interest in the state for economic development surged after the Tesla decision, he said.
Through the first quarter of 2016, the state had given Tesla tax credits worth $9.6 million. Reno realtor Marshall Corrasco said Tesla's arrival has spurred a jolt to the local real-estate market and seems to have attracted other high-tech companies to the region. "The biggest thing is getting a big corporation like Tesla and Apple to pay attention to us," he said. "But the Tesla project is in the infant stage. If it goes bust we will be stuck with the bill."
If Tesla is successful at its plant in Nevada, it could outpace all the world's existing plants' production by a factor of 10. The factory's size has led to a string of efforts to mine commodities, like lithium, in North America and to bring more processes to the region.
"If you look at where batteries are being made, it's almost all in Asia," Mr. Straubel said. "That was one of the big opportunities we have here, is to close the logistics loop from where cells are made and materials are made and move it closer to where our vehicles are made."
Write to Mike Ramsey at michael.ramsey@wsj.com
More on Tesla
* Heard on the Street: Tesla, Not a Moment to Lose
* Elon Musk Unveils Plans for New Tesla Vehicle Types
* Tesla Reduces Starting Price of Its Model X SUV
* Autopilot Crash Shouldn't Slow Self-Driving Development, Regulator Says
* Tesla Has No Plans to Disable Autopilot Feature in Its Cars
Credit: By Mike Ramsey
Subject: Automobile industry; Manufacturing; Vehicles
Company / organization: Name: Panasonic Corp; NAICS: 335222, 335224, 333415; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 24, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1806380244
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1806380244?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Races to Finish 'Gigafactory' in Time for Model 3 Rollout; CEO Elon Musk anticipates plant could be capable of producing 105 gigawatt hours of battery cells by 2020
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 July 2016: n/a.
ProQuest document link
Abstract:
(July 25, 2016) SPARKS, Nev.--Tesla Motors Inc. is scrambling to finish building its massive $5 billion battery factory here years ahead of schedule to meet demand for its coming cheaper sedan and provide power for new types of vehicles Chief Executive Elon Musk says are under development. Mr. Musk in recent weeks has laid out aggressive expansion plans for Tesla, including heavier vehicles and an energy-storage business that marries Tesla's battery business with SolarCity Corp.'s solar panels.
Full text: Corrections & Amplifications:
Tesla Motors plans to start battery cell production in late 2016. An earlier version of this article said the company aims to start production early next year. Also, SolarCity may provide solar panels to be installed on the roof of the factory; the earlier version incorrectly said SolarCity is the supplier. (July 25, 2016)
SPARKS, Nev.--Tesla Motors Inc. is scrambling to finish building its massive $5 billion battery factory here years ahead of schedule to meet demand for its coming cheaper sedan and provide power for new types of vehicles Chief Executive Elon Musk says are under development.
Tesla has doubled the number of people constructing the "gigafactory," which sits on more than 3,000 acres near Reno. Now, 1,000 workers build seven days a week on two shifts in an effort to start churning out lithium-ion cells by late 2016.
"We have to be ready with cell and pack production well ahead of vehicle production," JB Straubel, Tesla's chief technical officer and co-founder, said during a walk-through of the factory. "We're accelerating our construction plans and accelerating our planned ramp up of cell production."
The goal is to have the factory operational before the launch next year of the $35,000 Model 3 sedan, which is about half the base price of the Model S. Tesla opened reservations for the Model 3 earlier this year, and strong demand led Mr. Musk to pull a 500,000 sales target ahead two years to 2018. He also raised $1.7 billion through a stock offering in hopes of speeding up battery production expected to lower the cost of the batteries for electric vehicles.
As of now, the gigafactory's structure is less than one-sixth the size of what the final building is expected to occupy. Most exterior walls are temporary and can be relocated. Already finished is a four-story rectangular portion of the facility, housing 1.9 million square feet of floor space.
Tesla already is building battery packs for its battery storage business there, but is importing the battery cells from Panasonic Corp. facilities in Japan.
Panasonic has committed up to $1.6 billion to the factory. Joe Taylor, chief executive of Panasonic North America, said the company is struggling to find qualified workers with manufacturing abilities. "We are running around like crazy hiring people." The Japanese electronics giant is handling the cell manufacturing and pulled forward installation of equipment.
Mr. Musk in recent weeks has laid out aggressive expansion plans for Tesla, including heavier vehicles and an energy-storage business that marries Tesla's battery business with SolarCity Corp.'s solar panels. Mr. Musk, chairman and largest shareholder of both companies, has proposed a $2.8 billion merger of Tesla and SolarCity.
The roof of the new factory may be covered in SolarCity's panels. A solar-panel field will be constructed nearby to provide additional power to the factory.
Once completed, Mr. Musk anticipates the new plant could be capable of producing a total of 105 gigawatt hours of battery cells by 2020, or enough to power 1.2 million Model S sedans--though up to one-third of those batteries are slated for stationary battery storage. About 50,000 Model S sedans were built in 2015.
The auto maker has struggled to build vehicles since it opened its Fremont, Calif., plant, suffering quality problems in addition to supply constraints. Problems building the Model X SUV have limited sales in 2016. Earlier this year, the auto maker lost both its chief of production and head of manufacturing.
Tesla earlier this month said that it had achieved regular levels of higher production and expected to produce 50,000 vehicles in the second half of 2016. Through the first six months it had delivered fewer than 30,000 vehicles.
Tesla's gigafactory will be the first ever to make a new format of battery--a 21/70, rather than the 18/650 that the auto maker uses today for the Model S and Model X. The latter cylinder-shaped battery is commonly used in portable electronics and has been used by Tesla since the beginning. The numbers stand for the width and length in millimeters.
Virtually all lithium-ion battery production today is in Asia, and efforts by the U.S. government to establish a domestic battery production industry have had mixed results. A factory operated by South Korea's LG Chem in Holland, Mich., has been successful, handling the battery for General Motors Co. vehicles. Mr. Musk last week signaled there would be even more demand from his battery factory. The company aims to introduce several more electric vehicles, including a small sport-utility vehicle, a light pickup truck, a heavy-duty truck and a bus.
Nevada has promised Tesla incentives that could be worth $1.3 billion over 20 years, including the construction of a highway that speeds travel from near Carson City to the industrial park where the factory is located.
"We think this has been a great decision and has really been to Nevada's benefit," Economic Development Director Steve Hill said. Interest in the state for economic development surged after the Tesla decision, he said.
Through the first quarter of 2016, the state had given Tesla tax credits worth $9.6 million.
Sam Jaffe, a principal with Cairn Energy Research Advisors, said Tesla should be able to scale up quickly, but getting the needed cost reductions may lag.
"What they won't be able to do from a battery manufacturing perspective is make the cells as cheaply as they hoped. A lot of the price reductions from the gigafactory model come from the supply chain re-creation that they will be doing in North America. That won't be ready by 2018."
If Tesla is successful at its plant in Nevada, it could outpace all the world's existing plants' production by a factor of 10. The factory's size has led to a string of efforts to mine commodities, like lithium, in North America and to bring more processes to the region.
"If you look at where batteries are being made, it's almost all in Asia," Mr. Straubel said. "That was one of the big opportunities we have here, is to close the logistics loop from where cells are made and materials are made and move it closer to where our vehicles are made."
Write to Mike Ramsey at michael.ramsey@wsj.com
More on Tesla
* Heard on the Street: Tesla Can't Afford Any Wasted Time
* Elon Musk Unveils Plans for New Tesla Vehicle Types
* Tesla Reduces Starting Price of Its Model X SUV
* Autopilot Crash Shouldn't Slow Self-Driving Development, Regulator Says
* Tesla Has No Plans to Disable Autopilot Feature in Its Cars
Credit: By Mike Ramsey
Subject: Automobile industry; Manufacturing; Vehicles
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: Panasonic Corp; NAICS: 335222, 335224, 333415
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 25, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuestdocument ID: 1806387387
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1806387387?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Races to Build Battery Plant In Time for New Vehicle Rollout
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]25 July 2016: B.1.
ProQuest document link
Abstract:
Mr. Musk in recent weeks has laid out aggressive expansion plans for Tesla, including heavier vehicles and an energy-storage business that marries Tesla's battery business with SolarCity Corp.'s solar panels. Virtually all lithium-ion battery production today is in Asia, and efforts by the U.S. government to establish a domestic battery production industry have had mixed results.
Full text: Corrections & Amplifications
Tesla Motors Inc. plans to start battery cell production in late 2016. A Business & Tech article Monday about Tesla's new battery factory incorrectly said it aims to start production early next year. Also, SolarCity Corp. is one company being considered to provide solar panels for the roof of the factory. The article incorrectly said SolarCity is the supplier.
(WSJ July 26, 2016)
SPARKS, Nev. -- Tesla Motors Inc. is scrambling to finish building its massive $5 billion battery factory here years ahead of schedule to meet demand for its coming cheaper sedan and provide power for new types of vehicles Chief Executive Elon Musk says are under development.
Tesla has doubled the amount of people constructing the "gigafactory," which sits on more than 3,000 acres near Reno. Now, 1,000 workers build seven days a week on two shifts in an effort to start churning out lithium-ion cells by early 2017.
"We have to be ready with cell and pack production well ahead of vehicle production," JB Straubel, Tesla's chief technical officer and co-founder, said during a walk-through of the factory. "We're accelerating our construction plans and accelerating our planned ramp up of cell production."
The goal is to have the factory operational before the launch next year of the $35,000 Model 3 sedan, which is about half the base price of the Model S. Tesla opened reservations for the Model 3 earlier this year, and strong demand led Mr. Musk to pull a 500,000 sales target ahead two years to 2018. He also raised $1.7 billion through a stock offering in hopes of speeding up battery production expected to lower the cost of the batteries for electric vehicles.
As of now, the gigafactory's structure is less than one-sixth the size of what the final building is expected to occupy. Most exterior walls are temporary and can be relocated. Already finished is a four-story rectangular portion of the facility, housing 1.9 million square feet of floor space.
Tesla already is building battery packs for its battery storage business there, but is importing the battery cells from Panasonic Corp. facilities in Japan.
Panasonic has committed up to $1.6 billion to the factory. Joe Taylor, chief executive of Panasonic North America, said the company is struggling to find qualified workers with manufacturing abilities. "We are running around like crazy hiring people." The Japanese electronics giant is handling the cell manufacturing and pulled forward installation of equipment.
Mr. Musk in recent weeks has laid out aggressive expansion plans for Tesla, including heavier vehicles and an energy-storage business that marries Tesla's battery business with SolarCity Corp.'s solar panels. Mr. Musk, chairman and largest shareholder of both companies, has proposed a $2.8 billion merger of Tesla and SolarCity.
The roof of the new factory will be covered in SolarCity's panels. A solar-panel field will be constructed nearby to provide additional power to the factory.
Once completed, Mr. Musk anticipates the new plant could be capable of producing a total of 105 gigawatt hours of battery cells by 2020, or enough to power 1.2 million Model S sedans -- though up to one-third of those batteries are slated for stationary battery storage. About 50,000 Model S sedans were built in 2015.
The auto maker has struggled to build vehicles since it opened its Fremont, Calif., plant, suffering quality problems in addition to supply constraints. Problems building the Model X SUV have limited sales in 2016. Earlier this year, the auto maker lost both its chief of production and head of manufacturing.
Tesla earlier this month said that it had achieved regular levels of higher production and expected to produce 50,000 vehicles in the second half of 2016. Through the first six months it had delivered fewer than 30,000 vehicles.
Tesla's gigafactory will be the first ever to make a new format of battery -- a 21/70, rather than the 18/650 that the auto maker uses today for the Model S and Model X. The latter cylinder-shaped battery is commonly used in portable electronics and has been used by Tesla since the beginning. The numbers stand for the width and length in millimeters.
Virtually all lithium-ion battery production today is in Asia, and efforts by the U.S. government to establish a domestic battery production industry have had mixed results. A factory operated by South Korea's LG Chem in Holland, Mich., has been successful, handling the battery for General Motors Co. vehicles. Mr. Musk last week signaled there would be even more demand from his battery factory. The company aims to introduce several more electric vehicles, including a small sport-utility vehicle, a light pickup truck, a heavy-duty truck and a bus.
Nevada has promised Tesla incentives that could be worth $1.3 billion over 20 years, including the construction of a highway that speeds travel from near Carson City to the industrial park where the factory is located.
Through the first quarter of 2016, the state had given Tesla tax credits worth $9.6 million.
If Tesla is successful at its plant in Nevada, it could outpace all the world's existing plants' production by a factor of 10. The factory's size has led to a string of efforts to mine commodities, like lithium, in North America and to bring more processes to the region.
"If you look at where batteries are being made, it's almost all in Asia," Mr. Straubel said. "That was one of the big opportunities we have here, is to close the logistics loop from where cells are made and materials are made and move it closer to where our vehicles are made."
Credit: By Mike Ramsey
Subject: Manufacturing; Batteries; Automobile industry
Location: Sparks Nevada
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Jul 25, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1806401305
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1806401305?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Mobileye Ends Partnership With Tesla; The Israeli company, which makes software and components that help prevent collisions, says it will concentrate on systems that lead to full autonomy
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 July 2016: n/a.
ProQuest document link
Abstract:
A key supplier of semiautonomous car technology ended a supply agreement with Tesla Motors Inc. following a high-profile traffic fatality in May involving one of the Silicon Valley company's electric vehicles. The National Transportation Safety Board issued a preliminary report on the crash Tuesday, saying the driver was traveling 74 miles an hour in a 65 mph zone when the Model S hit the trailer.
Full text: A key supplier of semiautonomous car technology ended a supply agreement with Tesla Motors Inc. following a high-profile traffic fatality in May involving one of the Silicon Valley company's electric vehicles.
Mobileye NV said it would no longer provide its computer chips and algorithms to Tesla after a current contract ends due to disagreements about how the technology was deployed. Mobileye provides core technology for Tesla's Autopilot system, which allows cars to drive themselves in limited conditions.
It isn't clear when Mobileye's current contract with Tesla ends; a next generation Mobileye system--called the EyeQ4--comes out in 2018 and is expected to improve its ability to detect certain objects. The Tesla Model S involved in the May fatal crash failed to distinguish the white trailer of a truck cutting in front of it from a bright sky, the Palo Alto, Calif., electric car maker said in June.
Mobileye has said its system isn't designed to always detect vehicles cutting in front of it, but the coming EyeQ4 would be able to do so and would respond to such a maneuver.
The friction between Mobileye and Tesla reflects emerging tension between developers of cutting-edge auto technology and car makers over who owns or directs development of their technology.
"I think in a partnership, we need to be there on all aspects of how the technology is being used, and not simply providing technology and not being in control of how it is being used," said Mobileye Chief Technical Officer Amnon Shashua during an earnings call with analysts.
Mr. Shashua indicated the fatal crash of a Tesla using Autopilot led to the company cutting ties with the auto maker. The crash triggered a probe by the National Highway Traffic Safety Administration and wider scrutiny of semiautonomous-vehicle technology.
Tesla Chief Executive Elon Musk said in an email the split wouldn't affect its development of more-advanced versions of Autopilot system, which is installed in its Model S sedans and Model X sport-utility vehicles. "This was expected and will not have any material effect on our plans," he wrote.
"Mobileye's ability to evolve its technology is unfortunately negatively affected by having to support hundreds of models from legacy auto companies, resulting in a very high engineering drag coefficient," Mr. Musk said, using a term describing turbulence.
Tesla is working on cars that can fully drive themselves. The company hasn't said what autonomous-driving technology if any it plans to use on its coming Model 3 affordable electric car.
The disclosure pushed Mobileye shares 8% lower to $45.33 at 4 p.m. in New York Stock Exchange trading on Tuesday. The company's stock is up 27% over the past three months, but is off 18% over the past year. Tesla shares were off a fraction to $229.51 on Tuesday.
The Israeli company has agreements to supply camera-based driver-assistance systems to more than a dozen auto makers, but its relationship with Tesla helped bring it to the attention of auto analysts and Wall Street. General Motors Co., Nissan Motor Co., BMW AG and Hyundai Motor account for more than 60% of Mobileye's sales.
Mobileye said it expects Tesla sales to account for about 1% of its revenue this year. On Tuesday, Mobileye reported $26.9 million profit in its second quarter on revenue of $83.5 million.
Mobileye said it would support and maintain Tesla's current Autopilot product plans. These include upgrading a vehicle's ability to avoid crashes and optimizing auto-steering without hardware improvements, the company said.
The supplier recently announced a partnership with BMW and Intel Corp. to design a system for fully autonomous vehicles by 2021.
Mobileye has contracts to ship systems that allow for full autonomy to two auto makers by 2019, but hasn't named the companies.
For Tesla, the Mobileye system is used to power its Autopilot, which adds steering through curves, along with adaptive cruise control that could free up a driver's hands and feet.
U.S. safety regulators are investigating the system after the fatality in May. The Autopilot system was engaged, but it didn't slow the car before it struck the tractor trailer. Tesla said the driver never hit the brakes before striking the truck.
The National Transportation Safety Board issued a preliminary report on the crash Tuesday, saying the driver was traveling 74 miles an hour in a 65 mph zone when the Model S hit the trailer.
"It's very important given this accident...that companies would be very transparent about the limitations" of autonomous driving systems, Mobileye's Mr. Shashua said at a news conference with BMW and Intel earlier this month. "It's not enough to tell the driver to be alert but to tell the driver why," he said.
Write to Mike Ramsey at michael.ramsey@wsj.com
Related
* Driverless Cars Threaten to Crash Insurers' Earnings
* Tesla Draws Scrutiny After Autopilot Feature Linked to a Death
* Fatal Crash May Slow Advance of Self-Driving Cars
* Mobileye Ends Partnership With Tesla
* Aviation Experts Suggest Caution Releasing Self-Driving Cars
* U.S. Considers Expanding Automated-Driving Technology Oversight
* Roads That Work for Self-Driving Cars
* Tesla's Autopilot Vexes Some Drivers, Even Its Fans
Credit: By Mike Ramsey
Subject: Fatalities; Traffic accidents & safety; Electric vehicles; Suppliers
People: Musk, Elon
Company / organization: Name: Mobileye NV; NAICS: 334511; Name: New York Stock Exchange--NYSE; NAICS: 523210; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 26, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1806671043
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1806671043?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla to Part Ways With Key Supplier Of Autopilot Gear
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 July 2016: B.1.
ProQuest document link
Abstract:
A key supplier of semiautonomous car technology ended a supply agreement with Tesla Motors Inc. following a high-profile traffic fatality in May involving one of the Silicon Valley company's electric vehicles.
Full text: A key supplier of semiautonomous car technology ended a supply agreement with Tesla Motors Inc. following a high-profile traffic fatality in May involving one of the Silicon Valley company's electric vehicles.
Mobileye NV said it would no longer provide its computer chips and algorithms to Tesla after a current contract ends due to disagreements about how the technology was deployed. Mobileye provides core technology for Tesla's Autopilot system, which allows cars to drive themselves in limited conditions.
It isn't clear when Mobileye's current contract with Tesla ends; a next generation Mobileye system -- called the EyeQ4 -- comes out in 2018 and is expected to improve its ability to detect certain objects. The Tesla Model S involved in the May fatal crash failed to distinguish the white trailer of a truck cutting in front of it from a bright sky, the Palo Alto, Calif., electric car maker said in June.
Mobileye has said its system isn't designed to always detect vehicles cutting in front of it, but the coming EyeQ4 would be able to do so and would respond to such a maneuver.
The friction between Mobileye and Tesla reflects emerging tension between developers of cutting-edge auto technology and car makers over who owns or directs development of their technology.
"I think in a partnership, we need to be there on all aspects of how the technology is being used, and not simply providing technology and not being in control of how it is being used," said Mobileye Chief Technical Officer Amnon Shashua during an earnings call with analysts.
Mr. Shashua indicated the fatal crash of a Tesla using Autopilot led to the company cutting ties with the auto maker. The crash triggered a probe by the National Highway Traffic Safety Administration and wider scrutiny of semiautonomous-vehicle technology.
Tesla Chief Executive Elon Musk said in an email the split wouldn't affect its development of more-advanced versions of Autopilot system, which is installed in its Model S sedans and Model X sport-utility vehicles. "This was expected and will not have any material effect on our plans," he wrote.
"Mobileye's ability to evolve its technology is unfortunately negatively affected by having to support hundreds of models from legacy auto companies, resulting in a very high engineering drag coefficient," Mr. Musk said, using a term describing turbulence.
Tesla is working on cars that can fully drive themselves. The company hasn't said what autonomous-driving technology if any it plans to use on its coming Model 3 affordable electric car.
The disclosure pushed Mobileye shares 8% lower to $45.33 at 4 p.m. in New York Stock Exchange trading on Tuesday. The company's stock is up 27% over the past three months, but is off 18% over the past year. Tesla shares were off a fraction to $229.51 on Tuesday.
The Israeli company has agreements to supply camera-based driver-assistance systems to more than a dozen auto makers, but its relationship with Tesla helped bring it to the attention of auto analysts and Wall Street. General Motors Co., Nissan Motor Co., BMW AG and Hyundai Motor account for more than 60% of Mobileye's sales.
Mobileye said it expects Tesla sales to account for about 1% of its revenue this year. On Tuesday, Mobileye reported $26.9 million profit in its second quarter on revenue of $83.5 million.
Mobileye said it would support and maintain Tesla's current Autopilot product plans. These include upgrading a vehicle's ability to avoid crashes and optimizing auto-steering without hardware improvements, the company said.
The supplier recently announced a partnership with BMW and Intel Corp. to design a system for fully autonomous vehicles by 2021.
Mobileye has contracts to ship systems that allow for full autonomy to two auto makers by 2019, but hasn't named the companies.
For Tesla, the Mobileye system is used to power its Autopilot, which adds steering through curves, along with adaptive cruise control that could free up a driver's hands and feet.
U.S. safety regulators are investigating the system after the fatality in May. The Autopilot system was engaged, but it didn't slow the car before it struck the tractor trailer. Tesla said the driver never hit the brakes before striking the truck.
The National Transportation Safety Board issued a preliminary report on the crash Tuesday, saying the driver was traveling 74 miles an hour in a 65 mph zone when the Model S hit the trailer.
"It's very important given this accident . . . that companies would be very transparent about the limitations" of autonomous driving systems, Mobileye's Mr. Shashua said at a news conference with BMW and Intel earlier this month. "It's not enough to tell the driver to be alert but to tell the driver why," he said.
Credit: By Mike Ramsey
Subject: Fatalities; Suppliers; Autonomous vehicles
People: Musk, Elon
Company / organization: Name: Mobileye NV; NAICS: 334511; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Jul 27, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1806997992
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1806997992?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tech Companies Still Trusted More on Autonomous-Car Development; Surveys before and after news of fatal Tesla crash find greater confidence in Silicon Valley than in traditional auto makers
Author: Bach, Jonathan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 July 2016: n/a.
ProQuest document link
Abstract:
A fatality linked to Tesla Motor Inc.'s Autopilot system has done little to dent confidence in Silicon Valley's ability to do a better job than traditional auto makers when it comes to development of software for autonomous cars, according to a new AlixPartners LLP survey.
Full text: A fatality linked to Tesla Motor Inc.'s Autopilot system has done little to dent confidence in Silicon Valley's ability to do a better job than traditional auto makers when it comes to development of software for autonomous cars, according to a new AlixPartners LLP survey.
The consulting firm surveyed slightly more than 1,500 respondents shortly before the late-June disclosure of the Tesla fatality and then followed up with a revised study after the incident attracted significant attention. In both cases, 41% of respondents said they trusted Silicon Valley most to develop self-driving software, far exceeding those who consider Japanese, U.S. or European auto makers the best fit.
The company's initial survey was done without respondents' knowledge of the fatality, which occurred in May.
The results underscore the concern among conventional auto makers that they are perceived to be behind Tesla, Alphabet Inc.'s Google and other tech firms in the race to deploy autonomous vehicles. Most major auto makers have devoted significant research and budgets to self-driving car development, but Google's car project team and Tesla Chief Executive Elon Musk have gotten credit for being faster movers in certain areas.
Google, for instance, has been credited for amassing more than a million test miles with autonomous prototypes on public roads, creating a sizable lead over competitors. While Tesla has been criticized for not doing enough to educate drivers on how to properly use its Autopilot, the company has been the most aggressive when it comes to equipping its cars with advanced safety systems.
Overall interest in autonomous cars didn't take much of a hit after the Tesla fatality was disclosed, slipping only 3 percentage points. There was "not a massive falloff" in popular opinion around self-driving cars after the crash was disclosed, AlixPartners Managing Director Mark Wakefield said.
Joshua Brown, a 40-year-old Ohio owner of a Tesla Model S, died when his electric car drove under the trailer of an 18-wheel truck on a highway in Williston, Fla., on May 7, according to regulators and a Florida Highway Patrol report. The cause of the crash is still being investigated.
The second survey showed the crash may have raised Tesla's name recognition in the self-driving sphere and raised awareness of autonomous cars generally. Before the crash, Google was the dominant company people knew of when it came to self-driving cars, at 42%, while Tesla came in second at 23%. In the second survey, 55% of participants cited Tesla, while Google's name fell to 20%.
Trust in autonomous cars rose when people were given the option to take control of the car in an instant versus having a fully autonomous vehicle, Mr. Wakefield said.
AlixPartners first conducted the study in June partially because the skeptical media attention around self-driving cars didn't necessarily reflect what the firm saw happening in the industry, Mr. Wakefield said.
A similar survey recently released by the Boston Consulting Group of consumers in the U.S., China and Germany supported AlixPartner's results. People in those markets didn't lose marked interest in riding in self-driving vehicles, be they completely or semiautonomous, even in light of recent scrutiny around the technology's safety.
Autonomous cars found the most favor in China, where Boston Consulting saw an uptick in interest, from 75% in a study conducted last August to 81% this month. In the U.S., a slight drop from 53% to 48% of participants showed interest in self-driving cars. German consumers remained most wary when compared to the other two markets.
Write to Jonathan Bach at jonathan.bach@wsj.com
Related Reading
* CFO Journal: Ford Prepares for Autonomous, Volatile World (July 28)
* Aviation Experts Urge Caution on Releasing Self-Driving Cars (July 27)
* Mobileye Ends Partnership With Tesla (July 26)
Credit: By Jonathan Bach
Subject: Fatalities; Vehicles; Roads & highways
Location: United States--US
People: Musk, Elon
Company / organization: Name: AlixPartners LLC; NAICS: 541611; Name: Google Inc; NAICS: 519130; Name: Alphabet Inc; NAICS: 551114; Name: Highway Patrol-Florida; NAICS: 922120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jul 29, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1807570522
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1807570522?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla and SolarCity Agree to $2.6 Billion Deal; Electric car maker had made an offer in June to buy solar-energy company also chaired by Elon Musk
Author: Ramsey, Mike; Sweet, Cassandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Aug 2016: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. on Monday said it had reached a deal to buy SolarCity Corp. for less than the price it originally proposed, as Elon Musk takes the next step forward with his plan to combine his electric-car and solar-energy companies.
Full text: Tesla Motors Inc. on Monday said it had reached a deal to buy SolarCity Corp. for less than the price it originally proposed, as Elon Musk takes the next step forward with his plan to combine his electric-car and solar-energy companies.
The all-stock deal values SolarCity at about $2.6 billion, with SolarCity stockholders receiving 0.11 share of Tesla for each share of SolarCity, valuing them at $25.83 apiece, according to Friday's closing prices.
That is below the original range of $26.50 to $28.50 per SolarCity share that Tesla had proposed in June.
Mr. Musk said Monday he wasn't involved in the decision making about the valuation of the purchase.
If it is approved by shareholders, the deal would double Tesla's workforce to nearly 30,000 employees and create a unique combination of solar, power storage and transportation, which Tesla says would be the world's only integrated sustainable energy company.
The new company also would tie together two money-losing entities, dependent on borrowing from the market, adding potential risk along with opportunity.
Mr. Musk, who owns more than 20% of both companies and is the largest shareholder in both, plans to vote his shares in proportion to the voting by the companies' publicly held shares.
He said earlier in July that he expects two-thirds of shareholders to approve the deal, which the companies expect will close in the fourth quarter.
"It's really all part of solving the sustainable energy problem," Mr. Musk said during a conference call with analysts to discuss the deal. "That's why we are all doing this, to accelerate the advent of a sustainable energy world."
Some analysts were skeptical of the deal's value for Tesla, saying that buying an unprofitable solar company may not be the best financial move for Tesla, which up to now has primarily been an auto maker.
"It's a bailout," said Jesse Pichel, an investment banker at Roth Capital Partners, adding, "SolarCity has had a hard time raising money. Tesla solves that problem."
Some in the solar industry, meanwhile, view the deal as a bargain for Mr. Musk, noting that SolarCity's stock is down more than 50% from the start of the in June proposed pairing the companies that he backs year.
"It's how big fortunes are made," said Lynn Jurich, chief executive of rival Sunrun Inc. "People who are willing to bet big and have a vision will be rewarded."
SolarCity is the largest player in the U.S. residential solar market, with a nearly 32% share of the market as of the first quarter of this year, according to GTM Research.
Vivint Solar Inc. was second with a 9% share and Sunrun was third with nearly 7%.
SolarCity Chief Executive Lyndon Rive, a cousin of Mr. Musk, said Monday that the deal would accelerate the development of clean energy.
The company aims to offer Tesla batteries with rooftop solar panels as a standard package for many of its customers in the next three to five years, Mr. Rive said.
Mr. Musk in June proposed pairing the companies that he backs as a means to vertically integrate his battery-storage business at Tesla with the solar-panel company.
A joint company would recognize $150 million or more in cost savings in the first full year after closing the transaction, he said.
The biggest area of cost savings may come from lowering SolarCity's cost to obtain customers by leveraging Tesla's strong brand recognition and retail store locations.
The solar company's cost to acquire new customers rose 80% in the first quarter from the previous quarter, and is more than 30% of the overall cost of installing a home solar panel system.
"I think $150 million is conservative," Mr. Musk said. "I think we will significantly exceed that in the first year."
For Tesla, SolarCity brings teams of installers across more than a dozen states, which will be able to install electric-car chargers, separately or together with panels and batteries, the companies said.
Under the proposed terms, SolarCity now has a 45-day period to seek better offers, and Tesla had one more opportunity to sweeten its offer if SolarCity obtains a higher bid.
If SolarCity does accept a better deal during the 45 days, the company would pay Tesla a $26.1 million breakup fee.
A special committee of SolarCity board members analyzed the offer, compared it to various alternatives and decided the deal "is the best outcome for SolarCity shareholders, compared with other outcomes," a person who helped advise the committee said Monday.
Anne Steele contributed to this article.
Write to Mike Ramsey at michael.ramsey@wsj.com and Cassandra Sweet at cassandra.sweet@wsj.com
More
* Heard: Double Dose of Risk for Tesla in Deal
* Musk Announces Tesla's Latest 'Master Plan' (July 21)
Credit: By Mike Ramsey and Cassandra Sweet
Subject: Acquisitions & mergers; Alternative energy; Cost control; Stockholders; Energy industry
People: Rive, Lyndon Jurich, Lynn
Company / organization: Name: Vivint Solar Inc; NAICS: 221114; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 1, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1807871428
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1807871428?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
A Double Dose of Risk for Tesla in SolarCity Deal; Elon Musk's two cash-burning companies have agreed to merge
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Aug 2016: n/a.
ProQuest document link
Abstract:
While it is being bought for stock, pending shareholder approval of the deal, it adds another cash drain when Tesla is spending heavily on starting production of its mass-market Model 3 sedan and finishing its battery "gigafactory."
Full text: Corrections & Amplifications:
Since 2014, Tesla Motors and SolarCity have both had quarterly free cash flow in the negative hundreds of millions of dollars. A chart published with this article failed to indicate the figures were in millions. (August 3, 2016)
Far more incredible than Elon Musk's various plans to power our homes, cars and, perhaps one day, spaceships and hyperloops, are his powers of persuasion.
The announcement back in June that electric-car maker Tesla Motors would buy solar-energy company SolarCity went down like a lead balloon at the time. But Mr. Musk's insistence that it was the "obvious thing to do," even as he recused himself from the negotiations because he owns more than a fifth of each company, seemed to carry the day.
The two companies said Monday that they had agreed to a $2.6 billion deal though at a lower price than originally proposed.
A casual observer might conclude that, while the industrial logic is far from obvious, any damage should be limited. After all, Tesla's market value is some 13 times that of SolarCity. And the companies say that they anticipate savings of $150 million in the first year--a substantial 5% return on the deal's value even before Mr. Musk's assertion that it is a step toward "solving the sustainable energy problem."
The immediate problem, though, is far more prosaic: cash flow.
Without enough money coming in the door, no business can survive. And, on that front at least, Tesla latching on to SolarCity is the equivalent of a shipwrecked man clinging to a piece of driftwood grabbing on to another man without one. Tesla burned through 50 cents of cash for each dollar of revenue in the past four quarters, while SolarCity consumed a whopping $6.00.
In terms of actual cost-benefit for Tesla, bolting on SolarCity presents a double dose of danger. While it is being bought for stock, pending shareholder approval of the deal, it adds another cash drain when Tesla is spending heavily on starting production of its mass-market Model 3 sedan and finishing its battery "gigafactory." A more immediate danger is that skepticism about the deal casts more doubt on Tesla itself, dragging on its valuation. It can ill afford that as it makes raising fresh capital more dilutive.
Tesla's ability to raise cash has depended on credulous investors who have bought equity and convertible-debt issues at multiples of expected 2018 profit that are many times higher than the likes of General Motors or Ford Motor.
By the time Tesla proposed buying SolarCity, meanwhile, the bloom already had come off such solar-rooftop-panel companies. SolarCity's shares had dropped by 75% from their 2014 peak. Even since the deal's announcement, SolarCity's closest peers, Sunrun and Vivint Solar, have fallen 16% and 10%, respectively.
Though Tesla raised $1.5 billion of equity in May, Mr. Musk said last week that it would need a "modest" amount again to finance the Model 3. The company hopes to sell 500,000 units a year by 2018--an immodest target given delays faced by its last new model and disappointing deliveries so far this year.
Mr. Musk's ability to power Tesla's market value may have to leap into ludicrous mode soon.
Write to Spencer Jakab at spencer.jakab@wsj.com
Credit: By Spencer Jakab
Subject: Acquisitions & mergers
Company / organization: Name: Vivint Solar Inc; NAICS: 221114; Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 1, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1807916085
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1807916085?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla Earnings: What to Watch; The auto maker is expected to post an adjusted net loss of 52 cents a share
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Aug 2016: n/a.
ProQuest document link
Abstract:
[...]quarter revenue is forecast to equal $1.6 billion, a 36% increase compared with a year ago.
Full text: Tesla Motors Inc.'s second-quarter financial results are expected to be released after market close on Wednesday. Here's what you need to know:
EARNINGS FORECAST: Tesla is expected to post an adjusted net loss of 52 cents a share compared with a loss of 48 cents a share in the same period a year earlier. Costs are increasing amid big investments in a new battery factory in Nevada and future products.
REVENUE FORECAST: Second-quarter revenue is forecast to equal $1.6 billion, a 36% increase compared with a year ago. A 25% increase in deliveries of its vehicles is the main reason revenue is up, but it also books revenue from selling U.S. federal emissions credits and selling batteries for residential use. Sales, while up, didn't meet expectations, with 14,370 sales falling well short of the company's initial 17,000 forecast.
WHAT TO WATCH:
CASH: Tesla raised $1.7 billion in an offering in May, but Chief Executive Elon Musk has since said the company may require more money to finance additional products. Sales came in short of expectations in the second quarter and spending on the company's battery factory increased, likely increasing the need to dig into the company's cash reserves.
SOLARCITY: Tesla announced a plan late in the second quarter to combine with SolarCity Corp. Both companies share Mr. Musk as a chairman and top shareholder. On Monday, the electric-vehicle maker announced it reached a firm deal with SolarCity valued at $2.6 billion in cash . Analysts are likely to probe the financial impact of the merger on both companies and how the two entities will benefit by coming together.
MODEL 3: Tesla may update the number of reservations it has for its Model 3, a sedan due late next year to compete near the lower end of the EV market. At last count Tesla had 373,000 nonbinding reservations. But in the interim, Tesla also has lowered the price of its Model S and Model X to try to capture more sales ahead of its release, and it has endured scrutiny related to its deployment of semiautonomous technology.
MODEL X: The quality of the company's first SUV is still in question nearly a year after Tesla delivered the first handful of units. Customers continue to complain about glitches and output of the model haven't approached those of the Model S. If deliveries don't pick up in the second half, Tesla has little chance to meet its 80,000 delivery goal.
AUTOPILOT: Tesla been working on an update to its Autopilot after a Model S driver died using the company's semiautonomous system. Eventually, the company will need to rework its system without a major ally: Mobileye NV said in July it is planning to end its relationship Tesla. Look for Tesla to talk about how it will go forward system without one of the leading suppliers on its team.
NEW MODELS: Mr. Musk introduced a new long-term plan in July that included commitments to make an electric semi-truck, a pickup, a small SUV and a small bus-like vehicle. Mr. Musk often uses earnings calls to elaborate on business plans, and there are many blanks left to fill in on this blueprint.
Write to Mike Ramsey at michael.ramsey@wsj.com
Credit: By Mike Ramsey
Subject: Net losses; Financial performance
Location: Nevada
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 1, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1807931400
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1807931400?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla and SolarCity Agree to $2.6 Billion Deal; Electric car maker had made an offer in June to buy solar-energy company also chaired by Elon Musk
Author: Ramsey, Mike; Steele, Anne
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Aug 2016: n/a. [Duplicate]
ProQuest document link
Abstract:
Tesla Motors Inc. on Monday said it had reached a deal to buy Silver Lake Kraftwerk-backed SolarCity Corp., the next step in Elon Musk's plan to combine his electric-car and solar-energy companies.
Full text: Tesla Motors Inc. on Monday said it had reached a deal to buy Silver Lake Kraftwerk-backed SolarCity Corp., the next step in Elon Musk's plan to combine his electric-car and solar-energy companies.
The all-stock deal values SolarCity at about $2.6 billion, with SolarCity stockholders receiving 0.11 share of Tesla for each share of SolarCity, valuing them at $25.83 apiece, according to Friday's closing prices.
The deal's value comes in lower than the original range of $26.50 to $28.50 per share Tesla had proposed in June. Mr. Musk said Monday he wasn't involved in talks about the valuation of the purchase.
"I know about as much as you do about how the price was obtained," he said to an analyst on a conference call. Mr. Musk and other key members of the boards of both companies recused themselves from the analysis of the deal.
The deal, if it is approved by shareholders, would double Tesla's workforce to nearly 30,000 employees and create a unique combination of solar, storage and transportation. The new company would tie up two-money losing entities, dependent on borrowing from the market together, adding potential for risk along with its opportunity to vertically integrate its products.
"It's really all part of solving the sustainable energy problem," Mr. Musk said. "That's why we are all doing this to accelerate the advent of a sustainable energy world."
Mr. Musk, who owns more than 20% of both companies and is largest shareholder in both, in June proposed pairing the companies that he backs as a means to vertically integrate his battery-storage business at Tesla with the solar panel company. In a statement, Tesla and SolarCity said a joint company would recognize $150 million in cost savings in the first full year after closing the transaction.
The biggest area of cost savings may come from lowering SolarCity's cost to obtain customers by leveraging Tesla's strong brand recognition and retail store locations. The solar company's cost to acquire new customers spiked 80% in the first quarter from the previous quarter, to more than 30% of the overall cost of installing a home solar panel system.
"I think $150 million is conservative," Mr. Musk said. "I think we will significantly exceed that in the first year."
The Tesla-SolarCity merger is contingent upon, among other things, approval by holders of a majority of the total votes of shares of SolarCity common stock not owned by Mr. Musk and other directors and executives of Tesla and SolarCity.
Tesla in a filing Monday said a special committee of "independent and disinterested" SolarCity board members evaluated the proposal. Mr. Musk, who has borrowed money and shuffled funds among his companies, recused himself from voting on the deal at the Tesla board meeting at which it would be approved and would do so for any vote on the SolarCity board as well, the initial offer letter said.
Tesla and SolarCity have numerous overlapping interests on their boards. Mr. Musk is chairman of both companies. His cousins Lyndon and Peter Rive are the founders of SolarCity, and both sit on the SolarCity board. In addition, Tesla's co-founder JB Straubel is on SolarCity's board and investor Antonio Gracias sits on the board of both companies.
The strong ties between the two firms have raised conflict-of-interest questions over the deal, potentially opening it up to lawsuits. Monday, SolarCity's Board said it had amended the company's bylaws to require potential lawsuits to take place in business-friendly Delaware.
Tesla, with a market capitalization of about $34.6 billion, is a much larger company than SolarCity, whose market value is roughly $2.6 billion after rising in recent months after Tesla made its buyout offer.
Following the initial announcement of the offer, Tesla shares plunged 10% as investors expressed skepticism about the benefits of the deal. Mr. Musk, however, spent time talking to some of the largest shareholders, including the Fidelity, which is the biggest holder outside of himself in both Tesla and SolarCity. In an interview, Mr. Musk said he was confident shareholders would approve the acquisition.
Mr. Musk recently unveiled a strategy document that envisioned a combined entity that sold solar systems and cars from the same retail stores. The companies said they expected the transaction to close in the fourth quarter after a 45-day "go-shop" period in which SolarCity would be open to alternative proposals for purchase.
If either company backs out of the deal without another offer in place, it would owe the other a $78.2 million termination fee; if SolarCity terminates the tie-up to enter into another merger before the expiration the go-shop period, the termination fee owed to Tesla will be $26.1 million.
SolarCity shares lost 4.8% to $25.41 in midday trading while Tesla shares edged 0.5% higher to $235.90.
Tesla is scheduled to report second-quarter financial results on Wednesday after the market closes.
Silver Lake Kraftwerk, the growth-equity arm of technology investor Silver Lake, initially invested in SolarCity in 2012 and sold its stake the following year after the company went public in late 2012. Silver Lake Kraftwerk agreed to invest $100 million in the company in 2015.
--Cassandra Sweet contributed to this article.
Write to Mike Ramsey at michael.ramsey@wsj.com and Anne Steele at Anne.Steele@wsj.com
Credit: By Mike Ramsey and Anne Steele
Subject: Shareholder voting; Alternative energy; Cost control; Stockholders; Energy industry
Company / organization: Name: Silver Lake Kraftwerk; NAICS: 523910; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 1, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1808026896
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1808026896?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla, SolarCity Agree to Merge
Author: Ramsey, Mike; Sweet, Cassandra
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Aug 2016: B.1.
ProQuest document link
Abstract:
Tesla Motors Inc. on Monday said it had reached a deal to buy SolarCity Corp. for less than the price it originally proposed, as Elon Musk takes the next step forward with his plan to combine his electric-car and solar-energy companies.
Full text: Tesla Motors Inc. on Monday said it had reached a deal to buy SolarCity Corp. for less than the price it originally proposed, as Elon Musk takes the next step forward with his plan to combine his electric-car and solar-energy companies.
The all-stock deal values SolarCity at about $2.6 billion, with SolarCity stockholders receiving 0.11 share of Tesla for each share of SolarCity, valuing them at $25.83 apiece, according to Friday's closing prices.
That is below the original range of $26.50 to $28.50 per SolarCity share that Tesla had proposed in June.
Mr. Musk said Monday he wasn't involved in the decision making about the valuation of the purchase.
If it is approved by shareholders, the deal would double Tesla's workforce to nearly 30,000 employees and create a unique combination of solar, power storage and transportation, which Tesla says would be the world's only integrated sustainable energy company.
The new company also would tie together two money-losing entities, dependent on borrowing from the market, adding potential risk along with opportunity.
Mr. Musk, who owns more than 20% of both companies and is the largest shareholder in both, plans to vote his shares in proportion to the voting by the companies' publicly held shares.
He said earlier in July that he expects two-thirds of shareholders to approve the deal, which the companies expect will close in the fourth quarter.
"It's really all part of solving the sustainable-energy problem," Mr. Musk said during a conference call with analysts to discuss the deal. "That's why we are all doing this, to accelerate the advent of a sustainable energy world."
Some analysts were skeptical of the deal's value for Tesla, saying that buying an unprofitable solar company may not be the best financial move for Tesla, which up to now has primarily been an auto maker.
"It's a bailout," said Jesse Pichel, an investment banker at Roth Capital Partners, adding, "SolarCity has had a hard time raising money. Tesla solves that problem."
Some in the solar industry, meanwhile, view the deal as a bargain for Mr. Musk, noting that SolarCity's stock is down more than 50% from the start of the year.
"It's how big fortunes are made," said Lynn Jurich, chief executive of rival Sunrun Inc. "People who are willing to bet big and have a vision will be rewarded."
SolarCity is the largest player in the U.S. residential solar market, with a nearly 32% share of the market as of the first quarter of this year, according to GTM Research.
Vivint Solar Inc. was second with a 9% share and Sunrun was third with nearly 7%.
SolarCity Chief Executive Lyndon Rive, a cousin of Mr. Musk, said Monday that the deal would accelerate the development of clean energy.
The company aims to offer Tesla batteries with rooftop solar panels as a standard package for many of its customers in the next three to five years, Mr. Rive said.
Mr. Musk in June proposed pairing the companies that he backs as a means to vertically integrate his battery-storage business at Tesla with the solar-panel company.
A joint company would recognize $150 million or more in cost savings in the first full year after closing the transaction, he said.
The biggest area of cost savings may come from lowering SolarCity's cost to obtain customers by leveraging Tesla's strong brand recognition and retail-store locations.
The solar company's cost to acquire new customers rose 80% in the first quarter from the previous quarter, and is more than 30% of the overall cost of installing a home solar panel system.
"I think $150 million is conservative," Mr. Musk said. "I think we will significantly exceed that in the first year."
For Tesla, SolarCity brings teams of installers across more than a dozen states, which will be able to install electric-car chargers, separately or together with panels and batteries, the companies said.
Under the proposed terms, SolarCity now has a 45-day period to seek better offers, and Tesla had one more opportunity to sweeten its offer if SolarCity obtains a higher bid.
If SolarCity does accept a better deal during the 45 days, the company would pay Tesla a $26.1 million breakup fee.
A special committee of SolarCity board members analyzed the offer, compared it to various alternatives and decided the deal "is the best outcome for SolarCity shareholders, compared with other outcomes," a person who helped advise the committee said Monday.
---
Anne Steele contributed to this article.
Credit: By Mike Ramsey and Cassandra Sweet
Subject: Acquisitions & mergers
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: SolarCity Corp; NAICS: 221114, 238220, 333414
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Aug 2, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 180798 6040
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1807986040?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Loses $293 Million as Deliveries Fall Short, Expenses Rise
Author: Ramsey, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Aug 2016: n/a.
ProQuest document link
Abstract:
General Motors Co. and Ford Motor Co. are banking billions in quarterly profits, boosting their ability to pay the steeply rising costs to develop more sophisticated vehicles for markets around the world.
Full text: Tesla Motors Inc.'s loss widened in the second quarter amid higher costs, but the company stuck to an ambitious plan that calls for building nearly 80,000 cars in 2016 and pulling forward a cheaper sedan aimed at the mass market.
The Silicon Valley electric car maker's report follows a tumultuous period capped by a traffic fatality related to the company's semiautonomous Autopilot system. Regulators also dinged the company's practice of having certain buyers sign nondisclosure agreements and the company faced continued questions about the quality of its Model X sport-utility vehicle.
Tesla, long known as a company that moves faster than traditional auto makers, plowed forward during the quarter. It announced its intention to combine with SolarCity Corp., which shares with Tesla Elon Musk as chairman. On Monday, the Tesla announced a firm deal with SolarCity valued at $2.6 billion.
Last month, Mr. Musk laid out a revised master plan, calling for new electric buses, semi trucks and pickups to be sold under the Tesla name, and laying out a vision to be a more comprehensive supplier of energy products, including stationary batteries and solar panels.
The quarter's financials, released Wednesday, show a similar portrait as past reports. The company is pulling in more revenue, but a variety of spending programs are outpacing gains on the top-line.
Unlike Detroit rivals, Tesla doesn't sell conventional gasoline-powered SUVs or pickups. General Motors Co. and Ford Motor Co. are banking billions in quarterly profits, boosting their ability to pay the steeply rising costs to develop more sophisticated vehicles for markets around the world.
Tesla is growing far faster than Ford or GM, selling 25% more cars in the second quarter compared with a year ago. While volumes were short of initial expectations, Tesla said in a shareholder letter that it reached a steady output of 2,000 vehicles a week during the past quarter, and committed to boost that rate by nearly 20% by the end of the year.
Mr. Musk admitted the company had struggled to build cars in the first half of the year.
"We were in production hell for the first six months of this year," he said on a conference call Wednesday. Mr. Musk added that he was personally going to meet with a supplier that was having problems.
He also teased that the company is planning soon to reveal a fully autonomous vehicle. "Full autonomy is going to come a hell of a lot faster than anyone thinks it will," he said. "What we have under development is going to blow peoples' minds. It blows my mind."
Tesla shares rose slightly to $225.50 after the earnings came out following the market's close. Investors have been closely watching Mr. Musk's ability to improve production activities and meet the continued strong demand it sees for its electric cars, even as gasoline prices dent enthusiasm for the wider electric-vehicle market.
Tesla's immediate financial portrait remains murky. While the company's cash reserves rose to $3.25 billion, it is burning cash amid big investments in a Nevada battery plant under construction and a Model 3 entry sedan that is under development. It raised $1.7 billion during the quarter from an equity offering and reaped the benefits of hundreds of thousands of $1,000 refundable Model 3 deposits, allowing it to offset its outflows.
The auto maker is now pulling forward its full-scale production plan for the Model 3 by two years and it will begin certain production activities later this year. It is slated to go on sale in 2017.
A second-quarter loss of $293 million was 60% deeper compared with a year ago. Its operating loss equaled $1.06 a share, greater than the 52-cent loss analysts had been expecting.
Revenue rose 33% to $1.27 billion, with the company delivering 14,402 vehicles during the period, well short of the 17,000 it initially anticipated.
The auto maker ended its "residual value guarantee" in the U.S., a system that allowed customers to do a kind of "lease" from the company where it would agree to buy back cars after three years at a set price. The company said it no longer needed it to provide good leasing prices in the U.S. It has long caused an odd accounting system for Tesla because it can't claim all the revenue from some sales up front.
Write to Mike Ramsey at michael.ramsey@wsj.com
Related
* Heard on the Street: False Dawn at Tesla
* Auto Makers, Regulators Spar on Fuel Economy
* Tesla and SolarCity Agree to $2.6 Billion Deal
* Heard on the Street: A Double Dose of Risk for Tesla in SolarCity Deal
* Aviation Experts Urge Caution on Releasing Self-Driving Cars
Credit: By Mike Ramsey
Subject: Automobile industry; Electric vehicles
People: Musk, Elon
Company / organization: Name: SolarCity Corp; NAICS: 238220, 333414, 221114; Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 3, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1808427981
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1808427981?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
False Dawn at Tesla; An improved cash-flow picture at Tesla is likely a mirage
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Aug 2016: n/a.
ProQuest document link
Abstract:
On the bright side, Tesla reported operating cash flow of $150 million and said it spent $295 million on capital needs.
Full text: The cash-flow picture brightened at Tesla Motors in the second quarter. Don't expect that improvement to last.
Tesla reported $1.6 billion in adjusted revenue and an adjusted loss of $1.06 a share Wednesday, which fell short of analysts' estimates. On the bright side, Tesla reported operating cash flow of $150 million and said it spent $295 million on capital needs. The result was a free cash outflow of $145 million, good for the best quarterly performance in more than two years.
The best way to read the report is to look at what was included and what wasn't. Refundable customer deposits for the Model 3 were included in operating cash flow. That could mean a big reversal later. But Tesla left out any updates about the $1,000 deposits. That is more than two months of silence since the company said it had received orders for 373,000 cars.
Meanwhile, capital expenditures are due to increase significantly in coming quarters. The company said in May it expects to spend about $2.25 billion in 2016 to help get the Model 3 ready for mass production. Tesla has spent just over $500 million on capital needs so far this year.
Tesla raised $1.7 billion in May from an equity sale, and now has $3.2 billion on its balance sheet, which offers some cushion. But those spending needs are hardly optional to meet the company's huge automotive ambitions. And the company's proposed acquisition of solar energy company SolarCity, which burns prodigious amounts of cash, won't help.
Shareholders shouldn't put away their wallets just yet.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Capital expenditures; Cash flow statements
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 3, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1808456016
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1808456016?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Plows Ahead Despite Loss --- Latest report caps tumultuous period for electric-vehicle maker; higher costs take toll
Author: Ramsey, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Aug 2016: B.1.
ProQuest document link
Abstract:
General Motors Co. and Ford Motor Co. are banking billions in quarterly profits, boosting their ability to pay the steeply rising costs to develop more sophisticated vehicles for markets around the world.
Full text: Tesla Motors Inc.'s loss widened in the second quarter amid higher costs, but the company stuck to an ambitious plan that calls for building nearly 80,000 cars in 2016 and pulling forward a cheaper sedan aimed at the mass market.
The Silicon Valley electric car maker's report follows a tumultuous period capped by a traffic fatality related to the company's semiautonomous Autopilot system. Regulators also dinged the company's practice of having certain buyers sign nondisclosure agreements and the company faced continued questions about the quality of its Model X sport-utility vehicle.
Tesla, long known as a company that moves faster than traditional auto makers, plowed forward during the quarter. It announced its intention to combine with SolarCity Corp., which shares with Tesla Elon Musk as chairman. On Monday, Tesla announced a firm deal with SolarCity valued at $2.6 billion.
Last month, Mr. Musk laid out a revised master plan, calling for new electric buses, semi trucks and pickups to be sold under the Tesla name, and laying out a vision to be a more comprehensive supplier of energy products, including stationary batteries and solar panels.
The quarter's financials, released Wednesday, show a similar portrait as past reports. The company is pulling in more revenue, but a variety of spending programs are outpacing gains on the top-line.
Unlike Detroit rivals, Tesla doesn't sell conventional gasoline-powered SUVs or pickups. General Motors Co. and Ford Motor Co. are banking billions in quarterly profits, boosting their ability to pay the steeply rising costs to develop more sophisticated vehicles for markets around the world.
Tesla is growing far faster than Ford or GM, selling 25% more cars in the second quarter compared with a year ago. While volumes were short of initial expectations, Tesla said in a shareholder letter that it reached a steady output of 2,000 vehicles a week during the past quarter, and committed to boost that rate by nearly 20% by the end of the year.
Mr. Musk admitted the company had struggled to build cars in the first half of the year.
"We were in production hell for the first six months of this year," he said on a conference call Wednesday. Mr. Musk added that he was personally going to meet with a supplier that was having problems.
He also teased that the company is planning soon to reveal a fully autonomous vehicle. "Full autonomy is going to come a hell of a lot faster than anyone thinks it will," he said. "What we have under development is going to blow peoples' minds."
Tesla shares rose slightly to $225.50 after the earnings came out following the market's close. Investors have been closely watching Mr. Musk's ability to improve production activities and meet the continued strong demand it sees for its electric cars, even as gasoline prices dent enthusiasm for the wider electric-vehicle market.
Tesla's immediate financial portrait remains murky. While the company's cash reserves rose to $3.25 billion, it is burning cash amid big investments in a Nevada battery plant under construction and a Model 3 entry sedan that is under development. It raised $1.7 billion during the quarter from an equity offering and reaped the benefits of hundreds of thousands of $1,000 refundable Model 3 deposits, allowing it to offset its outflows.
The auto maker is now pulling forward its full-scale production plan for the Model 3 by two years and it will begin certain production activities later this year. It is slated to go on sale in 2017.
A second-quarter loss of $293 million was 60% deeper compared with a year ago. Its operating loss equaled $1.06 a share, greater than the 52-cent loss analysts had been expecting.
Revenue rose 33% to $1.27 billion, with the company delivering 14,402 vehicles during the period, well short of the 17,000 it initially anticipated.
The auto maker ended its "residual value guarantee" in the U.S., a system that allowed customers to do a kind of "lease" from the company where it would agree to buy back cars after three years at a set price. The company said it no longer needed it to provide good leasing prices in the U.S. It has long caused an odd accounting system for Tesla because it can't claim all the revenue from some sales up front.
Credit: By Mike Ramsey
Subject: Financial performance; Electric vehicles; Company reports
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Aug 4, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1808567717
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1808567717?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Elon Musk Has Big Hopes for Storage Batteries, but the Market Is Small; Tesla and SolarCity have foothold in the business, which has been slow to catch on
Author: Sweet, Cassandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Aug 2016: n/a.
ProQuest document link
Abstract:
By combining SolarCity Corp. and Tesla Motors Inc., Elon Musk hopes to create an integrated renewable energy company that can sell solar panels as well as the batteries to preserve their power to homes and businesses all over the world.
Full text: By combining SolarCity Corp. and Tesla Motors Inc., Elon Musk hopes to create an integrated renewable energy company that can sell solar panels as well as the batteries to preserve their power to homes and businesses all over the world.
But to achieve his vision, Mr. Musk may once again have to virtually create a market from scratch, because so far, the demand for such batteries--especially among home consumers--remains extremely small.
Only about 450 U.S. homeowners installed batteries to save homemade electricity last year, according to GTM research, which tracks renewable energy markets. About 250 U.S. commercial property owners installed batteries, and suppliers installed larger battery packs for about two-dozen utility projects, GTM estimates.
"It's still a relatively tiny market, compared to solar or wind today, and minuscule if you look at the complete electricity infrastructure," said Ravi Manghani, an analyst at GTM.
The global power-storage market is forecast to grow from 1,000 megawatts installed in 2015, to more than 7,000 megawatts by 2025, according to research firm IHS. New government programs, such as a push by the Obama administration and federal lawmakers to extend renewable energy subsidies, are projected to help fuel the increase.
While total installations are expected to rise this year, the market for energy-storage batteries has been slow to materialize--and Tesla's battery production has gotten off to a slower start than Mr. Musk anticipated.
Tesla has started selling heavy-duty batteries, called Powerpacks, to companies that supply utilities with energy, and smaller battery packs, called Powerwalls, to SolarCity and a few other companies that install them alongside rooftop solar panels. These batteries use the same ingredients as those that Tesla uses in its cars.
Residential battery systems cost between $1,300 and $2,000 a kilowatt-hour of storage, or $8,320 and $12,800 for a battery system the size of Tesla's 6.4 kilowatt-hour Powerwall, according to GTM. Costs tend to vary widely as battery systems are customized.
The wholesale price for Tesla's home battery is $3,000--excluding the operating software, labor and other installation costs as well as the inverter, which converts direct current into alternating current.
Homeowners who connect batteries to their solar panels can claim a federal tax credit equal to 30% of the total cost of both systems.
While Mr. Musk predicted last year that Tesla would sell as much as $50 million worth of storage batteries in 2015, up to $500 million this year, and between $2 billion and $5 billion of storage batteries in 2017, its sales appear to be considerably below those figures to date.
Tesla's battery-storage business has been constrained and "is going to be heavily concentrated in [the fourth quarter] and probably heavily in November and December," Mr. Musk said Wednesday during a conference call with analysts to discuss quarterly results .
Tesla said in May that it shipped 2,500 Powerwall batteries and 100 large Powerpack batteries, primarily to customers in Europe and Australia. The company hasn't disclosed its revenues from battery sales, but some analysts estimate the company is selling far less than it had forecast.
Tesla decided to wait until a portion of the Gigafactory, its battery production facility in Nevada , was completed, at the end of last year, before shipping Powerwalls and Powerpacks, a company spokesman said. The entire factory is now close to fully opening.
Though the market for energy-storage batteries is small, it already has a lot of potential competitors due to the number of companies that make lithium batteries for other uses. They include large manufacturers such as Sony Corp., Panasonic Corp. and Samsung Electronics Co.
Colin Langan, an analyst at UBS, expects Tesla to sell about $230 million of batteries this year and $1 billion in 2017, below the company's forecast.
Tesla and SolarCity, which already collaborate on power storage and have joint marketing, have an early foothold in the nascent market, however.
SolarCity is working to complete a 13-megawatt solar farm and storage unit packed with Tesla batteries on the Hawaiian island of Kauai that will provide 52 megawatt-hours of electricity per day, enough to supply up to one-quarter of the island's midday power needs. SolarCity has two other utility projects under contract and commercial customers including Wal-Mart Stores Inc.
Tesla is supplying batteries to several projects with other companies. Among those are 50 megawatts of energy storage projects, spread across several dozen Los Angeles area office buildings, that San Francisco startup Advanced Microgrid Solutions is developing for Edison International's Southern California utility.
Tesla's batteries pack a lot of energy into a small space, which makes them easier to install next to office buildings in urban neighborhoods, said Susan Kennedy, Advanced Microgrid Solutions' chief executive. "As utilities figure out how to use storage in their distribution systems, the market is going to grow dramatically," she added.
While Tesla is an early mover, "it is by no means the only or the biggest mover," said Pavel Molchanov, an analyst at Raymond James. Still, Mr. Musk's fame, and the popularity of Tesla's Model S electric car, may help the brand expand into batteries, some rivals and vendors say.
"People ask everyday about getting a Powerwall," said Mark Coleman, who sells rooftop solar panels and battery systems through his online store, Wholesale Solar Inc., in Redding, Calif. Powerwall batteries aren't designed to be used as off-grid power sources, as one Powerwall can only run a normal refrigerator for about a day, he said.
He usually suggests other brands, such as lead-acid batteries made by Crown Battery, of Fremont, Ohio, "that last as long, and you don't have to spend as much."
Write to Cassandra Sweet at Cassandra.Sweet@wsj.com
Related
* Tesla Loses $293 Million as Deliveries Fall Short
* Tesla and SolarCity Agree to $2.6 Billion Deal
* Heard on the Street: Double Dose of Risk for Tesla
* Tesla Races to Finish 'Gigafactory' in Time for Model 3 Rollout
* SolarCity Raises $345 Million for New Solar Projects
Credit: By Cassandra Sweet
Subject: Alternative energy; Electricity; Batteries; Energy industry
Location: United States--US Southern California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 8, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1809735758
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1809735758?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 20 17-11-23
Database: The Wall Street Journal
Business News: Elon Musk's Task: Create a New Market --- A combined SolarCity and Tesla would face so-far tiny demand for batteries used at home
Author: Sweet, Cassandra
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 Aug 2016: B.6.
ProQuest document link
Abstract:
By combining SolarCity Corp. and Tesla Motors Inc., Elon Musk hopes to create an integrated renewable energy company that can sell solar panels as well as the batteries to preserve their power to homes and businesses all over the world.
Full text: By combining SolarCity Corp. and Tesla Motors Inc., Elon Musk hopes to create an integrated renewable energy company that can sell solar panels as well as the batteries to preserve their power to homes and businesses all over the world.
But to achieve his vision, Mr. Musk may once again have to virtually create a market from scratch, because so far, the demand for such batteries -- especially among home consumers -- remains extremely small.
Only about 450 U.S. homeowners installed batteries to save homemade electricity last year, according to GTM research, which tracks renewable energy markets. About 250 U.S. commercial property owners installed batteries, and suppliers installed larger battery packs for about two-dozen utility projects, GTM estimates.
"It's still a relatively tiny market, compared to solar or wind today, and minuscule if you look at the complete electricity infrastructure," said Ravi Manghani, an analyst at GTM.
The global power-storage market is forecast to grow from 1,000 megawatts installed in 2015, to more than 7,000 megawatts by 2025, according to research firm IHS. New government programs, such as a push by the Obama administration and federal lawmakers to extend renewable energy subsidies, are projected to help fuel the increase.
While total installations are expected to rise this year, the market for energy-storage batteries has been slow to materialize -- and Tesla's battery production has gotten off to a slower start than Mr. Musk anticipated.
Tesla has started selling heavy-duty batteries, called Powerpacks, to companies that supply utilities with energy, and smaller battery packs, called Powerwalls, to SolarCity and a few other companies that install them alongside rooftop solar panels. These batteries use the same ingredients as those Tesla uses in its cars.
Residential battery systems cost between $1,300 and $2,000 a kilowatt-hour of storage, or $8,320 and $12,800 for a battery system the size of Tesla's 6.4 kilowatt-hour Powerwall, according to GTM. Costs tend to vary widely as battery systems are customized.
The wholesale price for Tesla's home battery is $3,000 -- excluding the operating software, labor and other installation costs as well as the inverter, which converts direct current into alternating current.
Homeowners who connect batteries to their solar panels can claim a federal tax credit equal to 30% of the total cost of both systems.
While Mr. Musk predicted last year Tesla would sell as much as $50 million worth of storage batteries in 2015, up to $500 million this year, and between $2 billion and $5 billion of storage batteries in 2017, its sales appear to be considerably below those figures to date.
Tesla's battery-storage business has been constrained and "is going to be heavily concentrated in [the fourth quarter] and probably heavily in November and December," Mr. Musk said last week during a conference call with analysts to discuss quarterly results.
Although the market for energy-storage batteries is small, it already has a lot of potential competitors. They include large manufacturers such as Sony Corp., Panasonic Corp. and Samsung Electronics Co.
Tesla and SolarCity, which already collaborate on power storage and have joint marketing, have an early foothold in the nascent market, however.
SolarCity is working to complete a 13-megawatt solar farm and storage unit packed with Tesla batteries on the Hawaiian island of Kauai that will provide 52 megawatt-hours of electricity per day, enough to supply up to one-quarter of the island's midday power needs. SolarCity has two other utility projects under contractand commercial customers including Wal-Mart Stores Inc.
Tesla is supplying batteries to several projects with other companies. Among those are 50 megawatts of energy storage projects, spread across several dozen Los Angeles area office buildings, that San Francisco startup Advanced Microgrid Solutions is developing for Edison International's Southern California utility.
Credit: By Cassandra Sweet
Subject: Electric utilities; Alternative energy; Energy industry; Batteries; Solar energy
Location: United States--US
People: Musk, Elon
Company / organization: Name: SolarCity Corp; NAICS: 221114, 238220, 333414; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.6
Publication year: 2016
Publication date: Aug 9, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1809899110
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1809899110?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
SolarCity Losses Widen on Higher Expenses; Largest home-solar company in U.S. has been in spotlight since Tesla Motors offered to buy it in June
Author: Sweet, Cassandra; Minaya, Ezequiel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Aug 2016: n/a.
ProQuest document link
Abstract:
The market for so-called stationary energy storage is currently tiny, but some analysts and clean-energy companies are forecasting that demand for batteries to store electricity will grow, proving integral to putting more wind and solar power on the grid and a cheaper alternative to conventional utility equipment.\n
Full text: SolarCity Corp., which is in the process of being acquired by fellow Elon Musk company Tesla Motors Inc., reported a wider quarterly loss Tuesday as operating expenses climbed sharply.
For the current quarter, the home solar company forecast an adjusted loss between $2.55 a share and $2.65 a share, worse than estimated by analysts surveyed by Thomson Reuters, who forecast a loss of $2.26.
For the latest quarter, SolarCity reported a loss of $250.3 million, or 56 cents a share, compared with $155.7 million, or 23 cents a share, a year earlier. The quarter's adjusted loss was $2.32 a share, better than analysts' predictions of $2.44 a share.
Revenue rose 81% to $185.8 million, far above analysts' expectations of $146 million.
The company reported that revenue from periodic billings more than doubled from a year earlier, hitting $141.1 million. Total operating expenses, which includes some $29 million linked to restructuring expenses, rose to $265.4 million from $175.8 million during the same period a year earlier.
Shares of the company, tied to the Tesla offer price, barely budged after hours, rising 0.2% to $24.60. Shares of the company have been down some 53% over the past 12 months.
SolarCity, the largest home solar company in the U.S. by rooftop installations, has been in the spotlight since Tesla Motors offered in June to buy it .
Tesla's offer for the San Mateo, Calif.-based solar-panel installer raised eyebrows because Mr. Musk, who is chief executive of Palo Alto, Calif.-based Tesla, is chairman of both companies' boards of directors and a cousin of SolarCity CEO Lyndon Rive and Peter Rive, the company's chief technology officer.
Mr. Musk and Mr. Rive want to combine the firms into a single integrated sustainable energy company that harnesses sun power from home roof arrays and channels it into energizing electric cars in the garage, and additional batteries that can store the power for later use.
Opponents of the deal say that Mr. Musk, who owns more than 20% of each company, has an outsize influence that could create a conflict of interest. Some analysts have called Tesla's purchase a bailout for SolarCity; the panel-maker's share price has fallen by more than half so far this year.
Tesla's deal to buy SolarCity using stock was valued at $2.6 billion when it was announced, considerably lower than its original proposal. The lower purchase price prompted questions from investors about whether the outlook for SolarCity's business--or the residential solar market in general--is cooling off.
Mr. Musk told investors on a conference call Tuesday afternoon that the lower price for SolarCity is what independent board members of both companies came up with "in an exhaustive discussion that lasted a week or two."
"I haven't inquired about the details and I'm not privy to the details, but it's what they concluded is fair, between independent board members of SolarCity and board members of Tesla," he said.
If shareholders approve the deal, the companies could combine by the end of this year.
Using batteries to store electricity at homes and businesses is key to developing more solar power. The market for so-called stationary energy storage is currently tiny, but some analysts and clean-energy companies are forecasting that demand for batteries to store electricity will grow, proving integral to putting more wind and solar power on the grid and a cheaper alternative to conventional utility equipment.
SolarCity is likely to pair batteries with most solar panels it installs by 2020, as demand for storage increases as a way to balance out the flow of electricity between buildings with panels and local power grids, the company said.
"Solar and batteries go together like peanut butter and jelly," Mr. Musk said. "If you don't have the batteries there to balance the grid and buffer the power, you really cannot go beyond a certain level of solar in a particular neighborhood."
Write to Cassandra Sweet at cassandra.sweet@wsj.com and Ezequiel Minaya at ezequiel.minaya@wsj.com
Credit: By Cassandra Sweet and Ezequiel Minaya
Subject: Investments; Losses; Energy industry; Solar energy; Financial performance
People: Rive, Peter Rive, Lyndon
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 9, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1810164385
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1810164385?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Move Over, Tesla? Karma Unveils Its Hybrid Sports Car
Author: Assis, Claudia
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Aug 2016: n/a.
ProQuest document link
Abstract:
Niche car maker Karma Automotive on Thursday offered car enthusiasts a peek at its luxury hybrid plug-in vehicle, the Revero, expected to come with a solar rooftop and a sleek, sporty look.
Full text: Niche car maker Karma Automotive on Thursday offered car enthusiasts a peek at its luxury hybrid plug-in vehicle, the Revero, expected to come with a solar rooftop and a sleek, sporty look.
Karma, based in the Los Angeles area, is a reboot of Fisker Automotive Inc., which once seemed poised to rival Tesla Motors Inc.
See also: The No. 1 ticketed car in America
Fisker went bankrupt in 2013, however. Chinese auto parts Wanxiang Group bought its assets in 2014. Wanxiang relaunched and renamed the company Karma, the name of Fisker's first and only car, a plug-in hybrid launched in 2011.
People will be able to reserve a Revero on Sept. 8, with existing Karma owners able to do so before that, a company spokeswoman said. The car's suggested price will be revealed on that date and "at this time (the company isn't) releasing information on when it will be produced/ sold," she said.
Read more: Watch a $300,000 Ferrari get wrecked by incompetent parallel parking
Production of the first Karma, which cost about $103,000, ended shortly after its battery supplier declared bankruptcy. Recalls and production snags plagued the car throughout its history, and fewer than 3,000 Karmas were sold.
In November, Karma said it would use BMW AG's powertrain components for its cars.
Write to Claudia Assis at cassis@marketwatch.com
Credit: By Claudia Assis
Subject: Automobile industry
Location: Los Angeles California
Company / organization: Name: Fisker Automotive Inc; NAICS: 336111; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 11, 2016
Section: Pro Bankruptcy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1810639074
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1810639074?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Crash in China Spurs New Dispute
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Aug 2016: n/a.
ProQuest document link
Abstract:
Chongqing Changan Automobile, a Ford Motor Co. partner, completed a 1,200-mile road trip to test a self-driving car in April.
Full text: SHANGHAI--Tesla Motors Inc. says its Autopilot driver-assist doesn't turn its vehicles into self-driving cars--but its Chinese-language marketing of the system suggests otherwise, a translation that may backfire on the auto maker.
Autopilot is designed to help drivers change lanes, maintain a safe speed and find parking spaces. In China, Tesla promotes it as zi dong jia shi, which means the car can drive itself. So when a Beijing driver's Model S scraped a parked Volkswagen earlier this month while Autopilot was engaged, he accused the company of misleading marketing. There were no injuries.
In confirming the scrape, Tesla said the driver didn't have his hands on the wheel, despite a warning from the instrument panel when he activated the system.
"As clearly communicated to the driver in the vehicle, Autopilot is an assist feature that requires the driver to keep his hands on the steering wheel at all times, to always maintain control and responsibility for the vehicle, and to be prepared to take over at any time," the company said.
The driver didn't dispute that. "I was overly dependent on its self-driving function," said 33-year-old programmer Luo Zhen through his Sina Weibo account. But the driver said the salespeople misled him into thinking that Autopilot--for which he paid 27,500 yuan ($4,100)--gave the car full self-driving capabilities.
Mr. Luo said he had taken his hands off the steering wheel before the incident occurred. "It was just about 10 seconds," noting had he let go for a longer time, the autopilot system would have reminded him to retake the wheel.
He glanced up and saw a Volkswagen Santana parked on the left in front of his Tesla, but there was no chance for him to swerve, said Mr. Luo. His blue Tesla brushed the Santana, and got dinged.
Tesla's Autopilot has faced scrutiny since a fatal May 7 Model S crash in Florida. The National Highway Traffic Safety Administration in June said it would investigate the crash, the first known Autopilot-related fatality.
It is one of a handful of crashes linked to the Autopilot software, which made its debut in October. Several driverless-car advocates have criticized Autopilot for lulling drivers into believing the car is in control--as evidenced by videos drivers have posted online showing themselves reading or even sitting in the back seat while the car drove itself--when in fact it requires them to remain alert.
In China, online discussions are raging over how well drivers understand the limits of car technology to whether any technology can keep up with the country's often chaotic traffic, in which few drivers or pedestrians seem to be following the rules of the road.
"In China, how did you dare to let your car drive itself?" said a Sina Weibo user called Jonathan Beta. A Sina Weibo user called Tony Lin wrote: "Traffic conditions in China are extraordinarily complex. For any cars featuring (semi) autonomous driving, salespeople must not exaggerate the function, instead they should repeatedly remind drivers of not being dependent on the system."
Domestic Chinese auto makers also are working on self-driving cars. Chongqing Changan Automobile, a Ford Motor Co. partner, completed a 1,200-mile road trip to test a self-driving car in April. Chinese search-engine giant Baidu Inc. plans to mass-produce a driverless car within five years.
Tesla Chief Executive Elon Musk said last month the company has no plans to disable its Autopilot function, and would redouble its driver-education efforts.
Rose Yu
Subject: Traffic accidents & safety; Fatalities
Location: Beijing China China
Company / organization: Name: Volkswagen AG; NAICS: 336111, 336390; Name: Weibo Corp; NAICS: 519130; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 12, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1810676872
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1810676872?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
WSJ.D Technology: Tesla Crash in China Spurs New Dispute
Author: Anonymous
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Aug 2016: B.4.
ProQuest document link
Abstract:
Chongqing Changan Automobile, a Ford Motor Co. partner, completed a 1,200-mile road trip to test a self-driving car in April.
Full text: SHANGHAI -- Tesla Motors Inc. says its Autopilot driver-assist doesn't turn its vehicles into self-driving cars -- but its Chinese-language marketing of the system suggests otherwise, a translation that may backfire on the auto maker.
Autopilot is designed to help drivers change lanes, maintain a safe speed and find parking spaces. In China, Tesla promotes it as zi dong jia shi, which means the car can drive itself. So when a Beijing driver's Model S scraped a parked Volkswagen earlier this month while Autopilot was engaged, he accused the company of misleading marketing. There were no injuries.
In confirming the scrape, Tesla said the driver didn't have his hands on the wheel, despite a warning from the instrument panel when he activated the system.
"As clearly communicated to the driver in the vehicle, Autopilot is an assist feature that requires the driver to keep his hands on the steering wheel at all times, to always maintain control and responsibility for the vehicle, and to be prepared to take over at any time," the company said.
The driver didn't dispute that. "I was overly dependent on its self-driving function," said 33-year-old programmer Luo Zhen through his Sina Weibo account. But the driver said the salespeople misled him into thinking that Autopilot -- for which he paid 27,500 yuan ($4,100) -- gave the car full self-driving capabilities.
Mr. Luo said he had taken his hands off the steering wheel before the incident occurred. "It was just about 10 seconds," noting had he let go for a longer time, the autopilot system would have reminded him to retake the wheel.
He glanced up and saw a Volkswagen Santana parked on the left in front of his Tesla, but there was no chance for him to swerve, said Mr. Luo. His blue Tesla brushed the Santana, and got dinged.
Tesla's Autopilot has faced scrutiny since a fatal May 7 Model S crash in Florida. The National Highway Traffic Safety Administration in June said it would investigate the crash, the first known Autopilot-related fatality.
It is one of a handful of crashes linked to the Autopilot software, which made its debut in October. Several driverless-car advocates have criticized Autopilot for lulling drivers into believing the car is in control -- as evidenced by videos drivers have posted online showing themselves reading or even sitting in the back seat while the car drove itself -- when in fact it requires them to remain alert.
In China, online discussions are raging over how well drivers understand the limits of car technology to whether any technology can keep up with the country's often chaotic traffic.
Domestic Chinese auto makers also are working on self-driving cars. Chongqing Changan Automobile, a Ford Motor Co. partner, completed a 1,200-mile road trip to test a self-driving car in April. Chinese search-engine giant Baidu Inc. plans to mass-produce a driverless car within five years.
Tesla Chief Executive Elon Musk said last month the company has no plans to disable its Autopilot function, and would redouble its driver-education efforts.
-- Rose Yu
Subject: Traffic accidents & safety; Autonomous vehicles
Location: China
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2016
Publication date: Aug 12, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1810710807
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1810710807?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Elon Musk Sets Ambitious Goals at Tesla--and Often Falls Short; In past five years, Tesla failed to meet more than 20 of his projections, and missed 10 goals by nearly a year on average; Musk says he 'doesn't set targets that I know can't be met'
Author: Pulliam, Susan; Ramsey, Mike; Dugan, Ianthe Jeanne
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Aug 2016: n/a.
ProQuest document link
Abstract:
In May, Elon Musk made another of the bold projections that have become commonplace for the Tesla Motors Inc. chief executive when he said the electric car maker expected to deliver about 17,000 vehicles to buyers in the second quarter, its biggest ever. Few chief executives aim as high or push as hard as Mr. Musk, also the chairman and largest shareholder of Tesla, which is growing faster than General Motors Co. and Ford Motor Co. and is worth $34 billion in stock-market value.
Full text: In May, Elon Musk made another of the bold projections that have become commonplace for the Tesla Motors Inc. chief executive when he said the electric car maker expected to deliver about 17,000 vehicles to buyers in the second quarter, its biggest ever.
In July, Tesla did something else that has become commonplace: It missed Mr. Musk's target. Tesla said it delivered 14,370 vehicles , blaming the 15% shortfall partly on cars that were still on trucks and ships at the end of June.
"I have never set a goal which I know is unrealistic, unless I have specifically said I know it's unrealistic," said Mr. Musk, 45 years old, in an interview. Earlier this month, he committed to boosting Tesla's weekly output more than 50% by the end of this year compared with the first half of 2016.
Few chief executives aim as high or push as hard as Mr. Musk, also the chairman and largest shareholder of Tesla, which is growing faster than General Motors Co. and Ford Motor Co. and is worth $34 billion in stock-market value. That's about one-third of the two traditional auto makers combined.
In the past five years, though, Tesla has fallen short of more than 20 projections made by Mr. Musk, ranging from car-production output to financial targets, according to an analysis by The Wall Street Journal. The company missed 10 of his stated goals by an average of nearly a year.
Tesla's Model S sedan was rolled out on schedule in 2012, but its Model X sport-utility vehicle was delayed nearly two years before its debut last September. The Model 3 sedan, initially targeted for rollout by the end of 2014, was unveiled in March and won't be delivered to customers until next year.
So far, the expectations game on Wall Street hasn't applied to Mr. Musk, showing that some of Silicon Valley's highest-profile technology entrepreneurs play by different rules. Companies that make promises they don't keep usually are punished by investors.
Tesla shares are up more than 760% in the past five years, compared with about 65% for the Dow Jones Industrial Average.
"This guy wants to save the world," said Ron Baron, the founder of asset manager Baron Capital Group Inc., which has a Tesla stake worth more than $300 million. He isn't bothered by the misses. "The odds are very favorable that we are going to make a lot of money on this investment," Mr. Baron said.
Some analysts have begun to worry Mr. Musk's ambitious prognostications could haunt Tesla as it tries to meet his goal of churning out a million cars a year by the end of 2020. It has sold about 140,000 since 2008.
Last month, Mr. Musk announced a new "master plan" that he wrote , which includes plans for electric versions of a pickup truck, small sport-utility vehicle, large over-the-road truck and bus-type vehicle in the next several years. Tesla will double its workforce after buying SolarCity Corp., a solar-energy company where Mr. Musk also is the largest shareholder, in a deal valued at $2.6 billion.
"The targets they put out for production are ridiculously aggressive," said Colin Langan of UBS Group AG's UBS Investment Research.
Efraim Levy, an analyst with S&P Global Market Intelligence, said Tesla "has put off the day of reckoning for a long time because their case is based on delivering on future demand."
Tesla's future is riding largely on whether Mr. Musk can broaden the appeal of the Palo Alto, Calif., company's cars to the masses. The earliest Tesla models cost more than $100,000. The company is now racing to complete work on the Model 3, a sedan with a base price tag of $35,000 that will compete with gasoline-powered cars.
In May, Mr. Musk told analysts and investors that he expected production of the Model 3 to start on July 1, 2017.
In an interview with the Journal last month, the CEO talked down his own target. "Do I think production of the Model 3 will start on July 1 of next year?" Mr. Musk asked. "No."
Securities law gives executives leeway to prognosticate and issue targets, but a company could be held liable if its executives knew their projections had little or no chance of coming true.
"When you make a projection, you need a reasonable basis to believe in the validity of the projection," said former Securities and Exchange Commission Chairman Harvey Pitt, who now runs a consulting business.
Mr. Musk said he doesn't "set targets that I know can't be met." Tough goals keep Tesla moving forward. "In order to have a good outcome, we must strive for a great outcome," he said.
Tesla has about 14,000 employees, up from 6,000 at the end of 2013. In 2014 and 2015, Mr. Musk pushed production targets higher but then fell short at the end of both years. He sets the targets, and the numbers filter down through the company's ranks, according to Mr. Musk and employees.
A letter to shareholders in May 2014 set a goal of more than 35,000 deliveries of Model S vehicles for the full year. Tesla wound up missing the number by 3,345 financial filings show.
Instead of a "run rate" of 100,000 vehicles at the end of last year, or more than 8,000 made and sold a month, as Mr. Musk predicted in August 2014, the actual number was closer to 5,800 a month. Tesla came up about 8% short of his projection in February 2015 that Tesla would deliver about 55,000 vehicles by the end of last year.
Mr. Musk agrees it took longer than expected to meet the projections. That matters little, he said, because Tesla will eventually hit all its goals.
Cristina Balan, a former design engineer at Tesla, said quality issues increased as the company ramped up production on the Model S.
In early 2014, she saw cars lined up for assembly with flawed headliners, a part of the roof's interior. She said the flaw left a gap between the headliner and the trim on the roof-support pillar through which the car's metal frame was visible.
After Ms. Balan raised concerns about the headliners, she was forced to quit, she said. After leaving Tesla, she told Mr. Musk in an email that managers were "putting parts in the car knowing [they] are bad," according to a copy of the email reviewed by the Journal.
She filed an arbitration claim against Tesla last year. The company and Mr. Musk declined to comment on Ms. Balan.
Last year's production shortfall was caused partly by design problems with the Model X that left production of the SUV two years behind schedule. The vehicle's "falcon wing" doors sometimes didn't open or close, or the doors banged into objects after failing to notice them with ultrasonic sensors.
Mr. Musk changed the plans for a lift mechanism used in Model X doors just a few months before deliveries of the vehicle began last year, according to a former Tesla employee who worked on the doors.
In a news release in April , Tesla blamed its own "hubris" for the delays and said it was a mistake to include so much new technology with the Model X.
Mr. Musk also wanted a piece of molding that runs along the doors to look like a single strip with no crack where the door opened, said people familiar with the project. They said his specifications made it impossible to produce the Model X on schedule or on budget, but no one told Mr. Musk.
To keep production moving, engineers used a different process for the molding, but that backfired. In January, Mr. Musk saw a piece of molding hanging down from one Model X and summoned more than a dozen managers into a conference room, according to people familiar with the matter.
After Tesla's director of product excellence, Chris Van Wert, explained the problem to Mr. Musk, the chief executive asked Mr. Van Wert to leave the room with him, the people said. Mr. Musk was alone when he came back. "He's no longer part of the company," Mr. Musk said about Mr. Van Wert.
In an email to the Journal, Mr. Musk said the door seal on the driver's side of the Model X that he saw wasn't properly attached. "I fixed it myself," Mr. Musk said. Mr. Van Wert was "asked to leave" the company, Mr. Musk said.
Mr. Van Wert said: "I wholeheartedly disagree with Elon's statements regarding my work at Tesla." Mr. Van Wert added that he continues to "believe deeply in the work Tesla is doing to transform the industry."
In a February conference call with analysts and investors, Mr. Musk cited moldings as one reason for delays of the Model X.
After Tesla unveiled its Model 3 in March, the company received 373,000 customer reservations for the car. Mr. Musk has predicted Tesla will sell 500,000 total vehicles by 2018, two years sooner than the previous goal.
He went even further in a May conference call. "It's better to say our 2020 target for volume is closer to maybe close to one million vehicles in 2020 or something like that," Mr. Musk said.
Model 3 production is supposed to start in less than a year, but final engineering designs were finished only a few months ago. Other auto makers often complete engineering two years ahead of new-model launches.
Asked about the car's time frame, Mr. Musk agreed it is "really short. It will be like a world record." Anyone who doesn't believe Tesla will hit its goals "obviously...shouldn't buy the stock," he added.
Write to Susan Pulliam at susan.pulliam@wsj.com , Mike Ramsey at michael.ramsey@wsj.com and Ianthe Jeanne Dugan at ianthe.dugan@wsj.com
Related
* Heard on the Street: For Tesla, It's All in the Delivery
* Tesla Adjusts Its Autopilot Pitch in China
* SpaceX Launches Japanese Satellite
Credit: By Susan Pulliam, Mike Ramsey and Ianthe Jeanne Dugan
Subject: Automobile industry; Vehicles; Investments; Stockholders
Company / organization: Name: Baron Capital Group Inc; NAICS: 525990; Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 15, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1811360358
Document URL: https://login.ezproxy.uta. edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1811360358?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
For Tesla, It's All in the Delivery; A lot is riding on Tesla Motors' ability to produce the Model 3 on time
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Aug 2016: n/a.
ProQuest document link
Abstract:
A Wall Street Journal analysis found that the aspiring mass-market manufacturer has failed to hit more than 20 production or other projections since 2011.
Full text: It often seems that auto makers stress quantity over quality. The former is an area where Tesla Motors has plenty of catching up to do.
A Wall Street Journal analysis found that the aspiring mass-market manufacturer has failed to hit more than 20 production or other projections since 2011.
That history is relevant to current investors, since CEO Elon Musk recently made his biggest promise yet: that Tesla will deliver 500,000 cars by 2018, thanks to the arrival of its Model 3 mass-market sedan.
That is more than triple the output it has delivered in its history. The Model 3 is essential to Tesla's business plan and forms the basis for the stock's premium valuation.
Past production delays and quality issues haven't fazed shareholders. But meeting goals for the Model 3 will require producing cars profitably, at consistent quality and a much cheaper price point than earlier Tesla models.
Tesla will have to master this skill as larger rivals unveil a slew of new electric-car competition. These rivals have the financial strength to compete on price and the organizational wherewithal to deliver cars on time.
Tesla's forecasting ability hasn't improved as the company has matured. It has missed quarterly delivery forecasts --a prediction looking just two months into the future--twice in a row. Mr. Musk admitted in an interview that starting Model 3 production on time is unlikely.
Loyal shareholders still trust Mr. Musk to turn his vision of a future dominated by electric cars into reality, but his company urgently needs to meet the promises it has made. Otherwise, investors might play it safe with older, stodgier rivals.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Investments; Stockholders; Quality; Automobile industry
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 15, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1811377393
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1811377393?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Adjusts Its Autopilot Pitch in China; 'Zi dong jia shi,' meaning the car can drive itself, gives way to 'zi dong fu zhu jia shi,' meaning it really can't
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Aug 2016: n/a.
ProQuest document link
Abstract:
SHANGHAI--Tesla Motor Inc. has revised the marketing of its Autopilot feature in China, after a Beijing driver who sideswiped a parked car when the system was engaged accused the car maker of overplaying its capabilities. Since the weekend, the company has scaled back its description of Autopilot on its website and in other marketing materials from zi dong jia shi, meaning the car can drive itself, to zi dong fu zhu jia shi, meaning it is a driver-assist system.
Full text: SHANGHAI--Tesla Motor Inc. has revised the marketing of its Autopilot feature in China, after a Beijing driver who sideswiped a parked car when the system was engaged accused the car maker of overplaying its capabilities.
Since the weekend, the company has scaled back its description of Autopilot on its website and in other marketing materials from zi dong jia shi, meaning the car can drive itself, to zi dong fu zhu jia shi, meaning it is a driver-assist system. Also, Tesla has told its China-based sales staff to make the system's limitations clear to consumers.
Autopilot is designed to help drivers change lanes, maintain a safe speed and find parking spaces. When drivers turn it on, a message appears on the instrument panel warning them to keep their hands on the wheel.
A spokeswoman for Tesla in China, Duan Zhengzheng, confirmed the changes Tuesday, saying they are meant to alert drivers world-wide, especially outside the U.S., that driving with Autopilot turned on doesn't eliminate risks.
"We want to highlight to non-English speaking consumers that Autopilot is a driver-assist function," she said.
Autopilot has faced scrutiny since a fatal May 7 Model S crash in Florida. The National Highway Traffic Safety Administration in June said it would investigate the crash, the first known Autopilot-related fatality.
In China, the Autopilot issue went viral last week when Luo Zhen, the Beijing driver, posted a video showing how his Tesla brushed an illegally parked Volkswagen on a highway while Autopilot was activated. There were no injuries. Tesla confirmed the incident, but added that the driver was detected not to have had his hands on the wheel despite the dashboard warning--and Chinese traffic laws, which require two hands on the wheel at all times.
Mr. Luo admitted taking his hands off the steering wheel before the accident. But the 33-year-old programmer said Tesla sales representatives had misled him into thinking that the car has full self-driving capabilities, even taking their own hands off the wheel when demonstrating Autopilot.
"The car manual has hundred of pages," said Mr. Luo. "If you were me, would you read it from the first page to the last?"
A handful of crashes have been linked to the software since its debut in October. Several driverless-car advocates have criticized Autopilot for lulling drivers into believing the car is in control --as evidenced by videos drivers have posted online showing themselves reading or even sitting in the back seat while the car drove itself--when in fact it requires them to remain alert.
In China the issue has also underlined concerns about how any technology could keep up with the country's often chaotic traffic conditions, in which few drivers, cyclists or pedestrians seem to be following the rules of the road.
Tesla Chief Executive Elon Musk said last month the company has no plans to disable its Autopilot function , and would redouble its driver-education efforts.
Rose Yu
Subject: Traffic accidents & safety; Fatalities
Location: Beijing China China
Company / organization: Name: Volkswagen AG; NAICS: 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 16, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1811506991
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1811506991?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Talks Big, Falls Short --- Car maker has failed to meet more than 20 of CEO Elon Musk's projections in the past five years
Author: Pulliam, Susan; Ramsey, Mike; Dugan, Ianthe Jeanne
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]16 Aug 2016: A.1.
ProQuest document link
Abstract:
In May, Elon Musk made another of the bold projections that have become commonplace for the Tesla Motors Inc. chief executive when he said the electric car maker expected to deliver about 17,000 vehicles to buyers in the second quarter, its biggest ever. Few chief executives aim as high or push as hard as Mr. Musk, also the chairman and largest shareholder of Tesla, which is growing faster than General Motors Co. and Ford Motor Co. and is worth $34 billion in stock-market value.
Full text: In May, Elon Musk made another of the bold projections that have become commonplace for the Tesla Motors Inc. chief executive when he said the electric car maker expected to deliver about 17,000 vehicles to buyers in the second quarter, its biggest ever.
In July, Tesla did something else that has become commonplace: It missed Mr. Musk's target. Tesla said it delivered 14,370 vehicles, blaming the 15% shortfall partly on cars that were still on trucks and ships at the end of June.
"I have never set a goal which I know is unrealistic, unless I have specifically said I know it's unrealistic," said Mr. Musk, 45 years old, in an interview. Earlier this month, he committed to boosting Tesla's weekly output more than 50% by the end of this year compared with the first half of 2016.
Few chief executives aim as high or push as hard as Mr. Musk, also the chairman and largest shareholder of Tesla, which is growing faster than General Motors Co. and Ford Motor Co. and is worth $34 billion in stock-market value. That's about one-third of the two traditional auto makers combined.
In the past five years, though, Tesla has fallen short of more than 20 projections made by Mr. Musk, ranging from car-production output to financial targets, according to an analysis by The Wall Street Journal. The company missed 10 of his stated goals by an average of nearly a year.
Tesla's Model S sedan was rolled out on schedule in 2012, but its Model X sport-utility vehicle was delayed nearly two years before its debut last September. The Model 3 sedan, initially targeted for rollout by the end of 2014, was unveiled in March and won't be delivered to customers until next year.
So far, the expectations game on Wall Street hasn't applied to Mr. Musk, showing that some of Silicon Valley's highest-profile technology entrepreneurs play by different rules. Companies that make promises they don't keep usually are punished by investors.
Tesla shares are up more than 760% in the past five years, compared with about 65% for the Dow Jones Industrial Average.
"This guy wants to save the world," said Ron Baron, the founder of asset manager Baron Capital Group Inc., which has a Tesla stake worth more than $300 million. He isn't bothered by the misses. "The odds are very favorable that we are going to make a lot of money on this investment," Mr. Baron said.
Some analysts have begun to worry Mr. Musk's ambitious prognostications could haunt Tesla as it tries to meet his goal of churning out a million cars a year by the end of 2020. It has sold about 140,000 since 2008.
Last month, Mr. Musk announced a new "master plan" that he wrote, which includes plans for electric versions of a pickup truck, small sport-utility vehicle, large over-the-road truck and bus-type vehicle in the next several years. Tesla will double its workforce after buying SolarCity Corp., a solar-energy company where Mr. Musk also is the largest shareholder, in a deal valued at $2.6 billion.
"The targets they put out for production are ridiculously aggressive," said Colin Langan of UBS Group AG's UBS Investment Research.
Efraim Levy, an analyst with S&P Global Market Intelligence, said Tesla "has put off the day of reckoning for a long time because their case is based on delivering on future demand."
Tesla's future is riding largely on whether Mr. Musk can broaden the appeal of the Palo Alto, Calif., company's cars to the masses. The earliest Tesla models cost more than $100,000. The company is now racing to complete work on the Model 3, a sedan with a base price tag of $35,000 that will compete with gasoline-powered cars.
In May, Mr. Musk told analysts and investors that he expected production of the Model 3 to start on July 1, 2017.
In an interview with the Journal last month, the CEO talked down his own target. "Do I think production of the Model 3 will start on July 1 of next year?" Mr. Musk asked. "No."
Securities law gives executives leeway to prognosticate and issue targets, but a company could be held liable if its executives knew their projections had little or no chance of coming true.
"When you make a projection, you need a reasonable basis to believe in the validity of the projection," said former Securities and Exchange Commission Chairman Harvey Pitt, who now runs a consulting business.
Mr. Musk said he doesn't "set targets that I know can't be met." Tough goals keep Tesla moving forward. "In order to have a good outcome, we must strive for a great outcome," he said.
Tesla has about 14,000 employees, up from 6,000 at the end of 2013. In 2014 and 2015, Mr. Musk pushed production targets higher but then fell short at the end of both years. He sets the targets, and the numbers filter down through the company's ranks, according to Mr. Musk and employees.
A letter to shareholders in May 2014 set a goal of more than 35,000 deliveries of Model S vehicles for the full year. Tesla wound up missing the number by 3,345 financial filings show.
Instead of a "run rate" of 100,000 vehicles at the end of last year, or more than 8,000 made and sold a month, as Mr. Musk predicted in August 2014, the actual number was closer to 5,800 a month. Tesla came up about 8% short of his projection in February 2015 that Tesla would deliver about 55,000 vehicles by the end of last year.
Mr. Musk agrees it took longer than expected to meet the projections. That matters little, he said, because Tesla will eventually hit all its goals.
Cristina Balan, a former design engineer at Tesla, said quality issues increased as the company ramped up production on the Model S.
In early 2014, she saw cars lined up for assembly with flawed headliners, a part of the roof's interior. She said the flaw left a gap between the headliner and the trim on the roof-support pillar through which the car's metal frame was visible.
After Ms. Balan raised concerns about the headliners, she was forced to quit, she said. After leaving Tesla, she told Mr. Musk in an email that managers were "putting parts in the car knowing [they] are bad," according to a copy of the email reviewed by the Journal.
She filed an arbitration claim against Tesla last year. The company and Mr. Musk declined to comment on Ms. Balan.
Last year's production shortfall was caused partly by design problems with the Model X that left production of the SUV two years behind schedule. The vehicle's "falcon wing" doors sometimes didn't open or close, or the doors banged into objects after failing to notice them with ultrasonic sensors.
Mr. Musk changed the plans for a lift mechanism used in Model X doors just a few months before deliveries of the vehicle began last year, according to a former Tesla employee who worked on the doors.
In a news release in April, Tesla blamed its own "hubris" for the delays and said it was a mistake to include so much new technology with the Model X.
Mr. Musk also wanted a piece of molding that runs along the doors to look like a single strip with no crack where the door opened, said people familiar with the project. They said his specifications made it impossible to produce the Model X on schedule or on budget, but no one told Mr. Musk.
To keep production moving, engineers used a different process for the molding, but that backfired. In January, Mr. Musk saw a piece of molding hanging down from one Model X and summoned more than a dozen managers into a conference room, according to people familiar with the matter.
After Tesla's director of product excellence, Chris Van Wert, explained the problem to Mr. Musk, the chief executive asked Mr. Van Wert to leave the room with him, the people said. Mr. Musk was alone when he came back. "He's no longer part of the company," Mr. Musk said about Mr. Van Wert.
In an email to the Journal, Mr. Musk said the door seal on the driver's side of the Model X that he saw wasn't properly attached. "I fixed it myself," Mr. Musk said. Mr. Van Wert was "asked to leave" the company, Mr. Musk said.
Mr. Van Wert said: "I wholeheartedly disagree with Elon's statements regarding my work at Tesla." Mr. Van Wert added that he continues to "believe deeply in the work Tesla is doing to transform the industry."
In a February conference call with analysts and investors, Mr. Musk cited moldings as one reason for delays of the Model X.
After Tesla unveiled its Model 3 in March, the company received 373,000 customer reservations for the car. Mr. Musk has predicted Tesla will sell 500,000 total vehicles by 2018, two years sooner than the previous goal.
He went even further in a May conference call. "It's better to say our 2020 target for volume is closer to maybe close to one million vehicles in 2020 or something like that," Mr. Musk said.
Model 3 production is supposed to start in less than a year, but final engineering designs were finished only a few months ago. Other auto makers often complete engineering two years ahead of new-model launches.
Asked about the car's time frame, Mr. Musk agreed it is "really short. It will be like a world record." Anyone who doesn't believe Tesla will hit its goals "obviously. . .shouldn't buy the stock," he added.
Credit: By Susan Pulliam, Mike Ramsey and Ianthe Jeanne Dugan
Subject: Financial performance; Automobile industry
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: Aug 16, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1811510669
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1811510669?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
From DeLorean to Tesla; With enough government handouts, a car company never has to break even.
Author: Jenkins, Holman W, Jr
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Aug 2016: n/a.
ProQuest document link
Abstract:
While waving off concerns about missed production targets in a conference call this month, he attacked a government agency, the California Air Resources Board, saying its members "should damn well be ashamed of themselves" for not arranging for more lucrative zero-emissions credits for Tesla.
Full text: There's a reason why European and Japanese auto companies, leaders in cruise control and other automated driving technologies, were slow to bring their innovations to America: the U.S. liability system.
Tesla has experienced one fatal crash as a result of imperfections in its self-driving technology--the death of a Florida driver when his car hit a tractor trailer crossing its path. Tesla founder Elon Musk makes a plausible argument that Tesla's "Autopilot" is a net improver of safety. That won't matter to trial lawyers making a case that Tesla didn't sufficiently flag the system's limitations. And Mr. Musk himself is guilty of statements that could be portrayed as encouraging excessive confidence in what he calls a "beta" system.
Mr. Musk's frequent recourse to hyperbole lately has many analysts wondering what Elon is up to. A Journal story this week detailed 20 cases, over the past five years, of him touting financial or production goals that Tesla failed to meet.
In just the past few weeks, he set an implausible timetable for rolling out his mass-market Model 3 sedan. He floated a pie-in-the-sky "master plan" to build tractor trailers and pickup trucks. He justified Tesla's bailout of another Musk-related company, Solar City, by saying the two would revolutionize the world energy system. Last year, he even casually asserted that Tesla eventually would be worth more than Apple.
His fan, the investor Ron Baron, told the Journal this week: "This guy wants to save the world."
OK, but another way of thinking about Mr. Musk's public demeanor is suggested by a fascinating revisiting of the DeLorean case by economist Graham Brownlow of Queen's University Belfast.
Mr. Brownlow looks beyond the usual focus on the foibles of John DeLorean, the glamorous renegade GM executive who set out in 1975 to make a sports car now famous mainly for its role in the "Back to the Future" movies. He borrows a concept from the failures of socialism, known as the soft budget constraint, to note the incentives for DeLorean to run his company as if more subsidies could always be extracted from British taxpayers, who were backing the start-up auto maker.
Mr. DeLorean himself did not mince words at the time. He claimed that London was "over a barrel" because of the large government sums already invested in the firm.
This might ring some bells with respect to Mr. Musk's constant flogging of the political and technological prominence of his company. His recent deal for Solar City, for instance, may well have been aimed partly at warding off political criticism that Teslas are only as clean as the electricity they run on. His Model 3 plan may have been moved up to pressure Washington over the looming expiration of a key tax credit for Tesla buyers.
While waving off concerns about missed production targets in a conference call this month, he attacked a government agency, the California Air Resources Board, saying its members "should damn well be ashamed of themselves" for not arranging for more lucrative zero-emissions credits for Tesla.
When federal regulators were investigating Tesla battery fires three years ago, he darkly warned that their actions could "delay the advent of sustainable transport and increase the risk of global climate change, with potentially disastrous consequences worldwide."
The opposite of a soft budget constraint, of course, is a hard budget constraint. As Prof. Brownlow writes, "The more [an entrepreneur] expects that the existence and growth of the firm will depend solely on production costs and proceeds from sales, the more he will respect the budget constraint."
Tesla is a soft budget constraint company in two ways. It gets plenty of revenue indirectly as result of government policy (consumer tax rebates, fuel mileage credits, HOV permits), not to mention directly in the form of loan guarantees, corporate tax abatements, etc.
But Tesla also gets considerable funding from repeated sales of stock to the public. Though its Wall Street cheerleaders don't emphasize its dependence on political favoritism, Tesla's own disclosures are required to be more candid. Keeping investors giddy about Tesla's prospects therefore implicitly means reassuring them that Tesla will continue to attract the political patronage that has sustained it so far.
Prof. Brownlow makes the point that John DeLorean, whose failure is usually attributed to hubris or other psychological shortcomings , was in fact a brilliant engineer who had just come from a successful run as head of GM's Chevrolet division--so he was capable of running a hard-budget company.
His decisions at DeLorean were rational in a soft-budget sense. He expanded employment at his Northern Ireland factory even as sales fell far short of projections--because he knew that the greater the number of jobs at risk, the harder it would be for the British government to cut him off.
Then, along came a change of government in London, and Margaret Thatcher did just that.
Credit: By Holman W. Jenkins, Jr.
Subject: Politics; Automobile industry; Climate change; Game theory
Location: Florida United States--US
Company / organization: Name: Air Resources Board-California; NAICS: 924110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 16, 2016
column: Business World
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1811629359
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1811629359?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Tesla Alters Its China Sales Pitch
Author: Anonymous
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 Aug 2016: B.3.
ProQuest document link
Abstract:
Tesla Motors Inc. has revised the marketing of its Autopilot feature in China, after a Beijing driver who sideswiped a parked car when the system was engaged accused the electric-car maker of overplaying its capabilities. Since the weekend, the company has scaled back its description of Autopilot on its website and in other marketing materials from zi dong jia shi, meaning the car can drive itself, to zi dong fu zhu jia shi, meaning it is a driver-assist system.
Full text: SHANGHAI -- Tesla Motors Inc. has revised the marketing of its Autopilot feature in China, after a Beijing driver who sideswiped a parked car when the system was engaged accused the electric-car maker of overplaying its capabilities.
Since the weekend, the company has scaled back its description of Autopilot on its website and in other marketing materials from zi dong jia shi, meaning the car can drive itself, to zi dong fu zhu jia shi, meaning it is a driver-assist system. Also, Tesla has told its China-based sales staff to make the system's limitations clear to consumers.
Autopilot is designed to help drivers change lanes, maintain a safe speed and find parking spaces. When drivers turn it on, a message appears on the instrument panel warning them to keep their hands on the wheel.
A spokeswoman for Tesla in China confirmed the changes Tuesday, saying they are meant to alert drivers world-wide, especially outside the U.S., that driving with Autopilot turned on doesn't eliminate risks. "We want to highlight to non-English-speaking consumers that Autopilot is a driver-assist function," she said.
Autopilot has faced scrutiny since a fatal May 7 Model S crash in Florida. The National Highway Traffic Safety Administration said in June that it would investigate the crash, the first known Autopilot-related fatality.
In China, the Autopilot issue went viral last week when the Beijing driver posted a video showing how his Tesla brushed an illegally parked Volkswagen on a highway while Autopilot was activated. There were no injuries. Tesla confirmed the incident, but added that the driver was detected not to have had his hands on the wheel despite the dashboard warning -- and Chinese traffic laws, which require two hands on the wheel at all times.
-- Rose Yu
Subject: Autonomous vehicles
Location: China
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Aug 17, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1811700455
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1811700455?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Could Tesla Survive a Trump Administration? Plus, why was a federal bureaucrat passing information to a short seller?
Author: Freeman, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Aug 2016: n/a.
ProQuest document link
Abstract:
Ron Rotunda notes a new rule from the American Bar Association making it "professional misconduct " to engage in discrimination based on "race, sex, religion, national origin, ethnicity, disability, age, sexual orientation, gender identity, marital status or socioeconomic status in conduct related to the practice of law."
Full text: Kellyane Conway's promotion to manager of the Trump campaign has your humble correspondent thinking the GOP nominee is on the rise. So what would it mean for business if Donald Trump is elected President? His tax reforms would broadly benefit firms and workers. But his skepticism on global warming is bad news for companies like electric-car maker Tesla that rely on government subsidies. Our columnist Holman Jenkins observes , "Keeping investors giddy about Tesla's prospects" means "reassuring them that Tesla will continue to attract the political patronage that has sustained it so far ."
Morning Editorial Report
Click here to receive this daily Opinion summary via email.
Speaking of environmental politics, normally you assume that federal bureaucrats delay the construction of needed infrastructure because that's what bureaucrats do. But the story of the Interior Department sitting on a California water project is raising new questions. A Journal editorial shows a trail of emails about the project between a federal official and an investor known for short selling. A government spokesperson says the matter has been referred to Interior's Inspector General .
In the wake of Monday's transfer of 15 Guantanamo Bay detainees to the United Arab Emirates, a separate editorial notes the bloody history of such transfers. A full 17.5% of prisoners released from Gitmo have returned to terrorist activities , and the Pentagon has admitted former detainees are responsible for the deaths of Americans overseas. "There's an opening here for Donald Trump," writes the editorial board . He can ask Hillary Clinton if "she still thinks it's a good idea to bring Gitmo prisoners to America ."
Sen. Dianne Feinstein thinks it's a good idea to get all of NATO involved in the fight against Islamic State. She notes in our pages today, "Although ISIS has carried out attacks throughout the West, only seven of America's 27 NATO allies--Belgium, Canada, Denmark, France, the Netherlands, Turkey and the U.K.--have joined the U.S. in directly attacking the group ."
There's a widespread perception that companies use a tech-worker visa program to bring cheap labor into the U.S. to replace more expensive native employees. But Jason Riley notes that "both government and academic research shows that H-1B visa-holders, on balance, are not paid less than comparable U.S. workers ."
Hillary Clinton's promise not to approve the Trans-Pacific Partnership if she's elected means this year's lame-duck session of Congress is "do-or-die" for the trade deal, writes our columnist William Galston .
Ron Rotunda notes a new rule from the American Bar Association making it "professional misconduct " to engage in discrimination based on "race, sex, religion, national origin, ethnicity, disability, age, sexual orientation, gender identity, marital status or socioeconomic status in conduct related to the practice of law." This means strict limits on free speech for lawyers. "Consider the following form of 'verbal' conduct when one lawyer tells another, in connection with a case, 'I abhor the idle rich. We should raise capital gains taxes.' The lawyer has just violated the ABA rule by manifesting bias based on socioeconomic status," notes Mr. Rotunda .
Now here's some good news: recent declines in U.S. productivity don't mean we're doomed to a dismal future of declining living standards. Mark Roberti explains how low-cost wireless technologies are bringing huge efficiency gains in U.S. business and may soon even accelerate TSA lines at the airport. Radio-frequency identification (RFID) tags on items in a retail store can cut the time needed to check inventory by more than 95% .
Credit: By James Freeman
Subject: Socioeconomic factors; Political campaigns; Editorials
Location: United States--US California
People: Feinstein, Dianne Trump, Donald J Clinton, Hillary
Company / organization: Name: Department of Defense; NAICS: 928110; Name: Republican Party; NAICS: 813940; Name: Congress; NAICS: 921120; Name: North Atlantic Treaty Organization--NATO; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 17, 2016
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1811785053
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1811785053?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Unveils Electric-Car Battery With a 315-Mile Range; The company says its new 'Ludicrous' P100D will be the 'fastest car in the world'
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Aug 2016: n/a.
ProQuest document link
Abstract:
The 315-mile range sets a new benchmark for automotive engineers looking to lessen fears about so-called range anxiety, which drivers encounter when traveling longer distances in an electric car. Because electric cars must be plugged into charging ports that aren't as readily available as gas stations, nor as fast, many car buyers have refused to even consider one.
Full text: Corrections & Amplifications:
Tesla's lowest priced electric car starts at about $66,000. An earlier version of this article incorrectly stated prices begin at about $75,000. (Aug. 23)
Tesla Motors Inc. said it is offering its electric vehicles with a battery capable of going up to 315 miles on a charge, the first time a major auto maker has provided that much electric range in a vehicle.
The company unveiled new versions of its Model S sedan and Model X sport-utility vehicle with 100 kilowatt-hour batteries; previously the largest battery size was 90 kwh. The upgrade--which Tesla executives said was made possible by increasing the energy density of its battery packs--will allow the Palo Alto, Calif.-based company to sell a P100 version of those two vehicles with Tesla's well-known "Ludicrous Mode."
The 315-mile range sets a new benchmark for automotive engineers looking to lessen fears about so-called range anxiety, which drivers encounter when traveling longer distances in an electric car. Because electric cars must be plugged into charging ports that aren't as readily available as gas stations, nor as fast, many car buyers have refused to even consider one.
Tesla's Model S sedan will get the 315-mile range. The heavier SUV won't be able to travel as far on a charge.
The P100D sedan will cost $134,500 and the SUV will cost $135,500. The current Tesla line starts at about $66,000 and can go roughly 200 miles on a single charge .
In a conference call, Tesla Chief Executive Elon Musk said Tesla will now offer the "fastest car in the world," and he said the fact the vehicle is an electric one is a milestone that foreshadows the future of the auto industry. Tesla claims the 100 kwh sedan can travel from 0 to 60 miles an hour in 2.5 seconds, while the SUV can achieve it in 2.9 seconds.
Faster production cars have been sold by sports-car makers Porsche AG and Ferrari SpA, the company said, but it noted those cars cost about $1 million and are no longer produced.
Electric vehicles have been slow to catch on the U.S., particularly amid low gasoline prices. Mr. Musk's goal has been to create attractive electric cars that are in demand regardless of energy prices. On Tuesday, he said Tesla is trying to "build a great electric car that everyone can afford." The company aims to sell a cheaper Model 3 electric car beginning in 2017.
Mr. Musk said the company will make 200 packs a week due to production constraints. That represents about 10% of the company's volume, he said.
"I wish we could make more," he said.
Tesla shares rose less than 1% to $224.84 at 4 p.m. in Nasdaq trading on Tuesday.
Write to John D. Stoll at john.stoll@wsj.com
Related
* Elon Musk Sets Ambitious Goals at Tesla--and Often Falls Short
Credit: By John D. Stoll
Subject: Electric vehicles; Automobile industry
People: Musk, Elon
Company / organization: Name: Ferrari SpA; NAICS: 336111; Name: Porsche AG; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 23, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1813282995
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1813282995?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Tesla Boosts Range on Electric Vehicles --- Auto maker sets new benchmark with battery that can go 315 miles on a charge
Author: Stoll, John D
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 Aug 2016: B.3.
ProQuest document link
Abstract:
The 315-mile range sets a new benchmark for automotive engineers looking to lessen fears about so-called range anxiety, which drivers encounter when traveling longer distances in an electric car. Because electric cars must be plugged into charging ports that aren't as readily available as gas stations, nor as fast, many car buyers have refused to even consider one.
Full text: Tesla Motors Inc. said it is offering its electric vehicles with a battery capable of going up to 315 miles on a charge, the first time a major auto maker has provided that much electric range in a vehicle.
The company unveiled new versions of its Model S sedan and Model X sport-utility vehicle with 100 kilowatt-hour batteries; previously the largest battery size was 90 kwh. The upgrade -- which Tesla executives said was made possible by increasing the energy density of its battery packs -- will allow the Palo Alto, Calif.-based company to sell a P100 version of those two vehicles with Tesla's well-known "Ludicrous Mode."
The 315-mile range sets a new benchmark for automotive engineers looking to lessen fears about so-called range anxiety, which drivers encounter when traveling longer distances in an electric car. Because electric cars must be plugged into charging ports that aren't as readily available as gas stations, nor as fast, many car buyers have refused to even consider one.
Tesla's Model S sedan will get the 315-mile range. The heavier SUV won't be able to travel as far on a charge.
The P100D sedan will cost $134,500 and the SUV will cost $135,500. The current Tesla line starts at about $66,000 and can go roughly 200 miles on a single charge.
In a conference call, Tesla Chief Executive Elon Musk said Tesla will now offer the "fastest car in the world," and he said the fact the vehicle is an electric one is a milestone that foreshadows the future of the auto industry. Tesla claims the 100 kwh sedan can travel from 0 to 60 miles an hour in 2.5 seconds, while the SUV can achieve it in 2.9 seconds.
Faster production cars have been sold by sports-car makers Porsche AG and Ferrari SpA, the company said, but it noted those cars cost about $1 million and are no longer produced.
Electric vehicles have been slow to catch on the U.S., particularly amid low gasoline prices. Mr. Musk's goal has been to create attractive electric cars that are in demand regardless of energy prices. On Tuesday, he said Tesla is trying to "build a great electric car that everyone can afford." The company aims to sell a cheaper Model 3 electric car beginning in 2017.
Mr. Musk said the company will make 200 packs a week due to production constraints. That represents about 10% of the company's volume, he said.
"I wish we could make more," he said.
Credit: By John D. Stoll
Subject: Automobile industry; Batteries; Electric vehicles
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Aug 24, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1813543187
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1813543187?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Bond Market Smackdown: SolarCity vs. Sri Lanka; Elon Musk's big bond purchase should give his investors and Tesla shareholders pause
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Aug 2016: n/a.
ProQuest document link
Abstract:
Given the bullish global backdrop for bonds, a company offering an interest rate as high as 6.5% on such a short maturity should be beating investors back, if all were well.Tesla shareholders ought to keep that in mind as they weigh whether to approve bringing SolarCity in house.
Full text: The raging bond bull market evidently has its limits. That is a problem for SolarCity, and quite possibly Tesla Motors shareholders.
SolarCity said Tuesday afternoon that Chairman Elon Musk, Chief Executive Lyndon Rive and technology chief Peter Rive would together purchase more than 80% of the solar energy company's latest $124 million bond issue. The bonds will pay an annual interest rate of 6.5% and mature in 18 months.
That interest rate appears high given the global demand for yield. Some emerging-market sovereign debt now trades in line with investment-grade global corporate bonds. Sri Lanka, for instance, was able to issue 10-year bonds at a 6.825% annual rate last month. Intermediate-term U.S. corporate bonds yield 2.21%.
Granted, significant insider purchases of SolarCity bonds aren't new. Mr. Musk's private company, Space Exploration Technologies, bought the vast majority of a $105 million issue earlier this year. Mr. Musk told The Wall Street Journal in April that the large insider purchases of bonds are consistent with his philosophy that he should invest in securities his companies offer to the general public. And to a point, that is a reasonable approach.
But SolarCity has never offered such a high coupon on its debt for such a brief maturity. In February, the company issued five-year bonds with a coupon payment of just 5.25%.
The higher cost of borrowing has coincided with a 50% decline in SolarCity's share price this year.
Higher interest costs should alarm Tesla's investors, who will inherit SolarCity's obligations if a proposed merger with Tesla wins shareholder approval. Just as ominous is that it looks like outside investors aren't willing to buy up SolarCity's debt, despite the higher yields.
Given the bullish global backdrop for bonds, a company offering an interest rate as high as 6.5% on such a short maturity should be beating investors back, if all were well.Tesla shareholders ought to keep that in mind as they weigh whether to approve bringing SolarCity in house.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Bond issues; Sovereign debt; Interest rates; Stockholders
Location: United States--US Sri Lanka
People: Rive, Peter Rive, Lyndon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 24, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1813654167
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1813654167?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
SolarCity's Bonds Are Tesla's Woe
Author: Grant, Charley
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]25 Aug 2016: C.8.
ProQuest document link
Abstract:
SolarCity said Tuesday afternoon that Chairman Elon Musk, Chief Executive Lyndon Rive and technology chief Peter Rive would together purchase more than 80% of the solar-energy company's latest $124 million bond issue.
Full text: [Financial Analysis and Commentary]
The raging bull market for bonds evidently has its limits. That is a problem for SolarCity, and quite possibly Tesla Motors shareholders.
SolarCity said Tuesday afternoon that Chairman Elon Musk, Chief Executive Lyndon Rive and technology chief Peter Rive would together purchase more than 80% of the solar-energy company's latest $124 million bond issue. The bonds will pay an annual interest rate of 6.5% and mature in 18 months. That rate appears high given the global demand for yield.
Granted, significant insider purchases of SolarCity bonds aren't new. Mr. Musk's private company, Space Exploration Technologies, bought the vast majority of a $105 million issue earlier this year.
But SolarCity has never offered such a high coupon on its debt for such a brief maturity.
The higher cost of borrowing has coincided with a 50% decline in SolarCity's share price this year.
Higher interest costs should alarm Tesla's investors, who will inherit SolarCity's obligations if a proposed merger with Tesla wins shareholder approval. Just as ominous is that it looks like outside investors aren't willing to buy up SolarCity's debt, despite the higher yields.
Given the bullish global backdrop for bonds, a company offering an interest rate as high as 6.5% on such a short maturity should be beating back investors, if all were well.
Tesla shareholders ought to keep that in mind as they weigh whether to approve bringing SolarCity in-house.
Credit: By Charley Grant
Subject: Interest rates; Bond issues
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: SolarCity Corp; NAICS: 221114, 238220, 333414
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.8
Publication year: 2016
Publication date: Aug 25, 2016
column: Heard on the Street
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: Englis h
Document type: News
ProQuest document ID: 1813861709
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1813861709?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
An Identity Crisis for Self-Driving; The self-driving car industry is going through some terminological growing pains. A look at what Tesla and Google want.
Author: Zimmer, Ben
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Aug 2016: n/a.
ProQuest document link
Abstract:
[...]I'm partial to a suggestion from her fellow Atlantic staff writer Ed Yong: "meatmobile," reminiscent of "meatspace," a retronym coined in the mid-1990s to describe the physical world (contrasting with "cyberspace"). [...]self-driving technology is truly road-ready, however, we'll all be driving meatmobiles.
Full text: The self-driving car industry is going through some terminological growing pains.
Tesla Motors has lately drawn fire for the name of its "Autopilot" feature on its Model S cars, especially since the revelation that a Tesla owner using the self-driving system died in a crash in May. (The National Highway Traffic Safety Administration is still investigating the accident.)
In the wake of the crash, Consumer Reports called on Tesla to change the name Autopilot, saying that it gives drivers "a false sense of security." Technology analyst Jan Dawson agreed : "The very name Autopilot connotes something very different from and far beyond what the feature actually promises to do."
Tesla has even had to adjust its message in other languages. Earlier this month, the company changed the description of the Autopilot feature on its Chinese website, from zi dong jia shi (meaning "automatic driving") to zi dong fu zhu jia shi ("automatic assisted driving").
So far, Tesla's headaches have revolved around whether Autopilot implies too much autonomy. The word, short for "automatic pilot," goes back to the World War I era, when airplanes were first equipped with devices that could steer a course without intervention from a human pilot.
Tesla says it has no plans to change the name, while chief executive Elon Musk emphasizes that Autopilot is still a beta feature, subject to adjustment. In the long run, the auto industry will continue to grapple with what to call cars that can drive themselves.
"Self-driving," "driverless," "autonomous" and "robotic" have all been jockeying for position. Google favors "fully self-driving" for the robo-cars that it is developing, in which "the human 'driver' is never expected to take control of the vehicle at any time"--unlike the semiautonomous driver-assist systems that Tesla and other manufacturers offer.
As Adrienne LaFrance observed in the Atlantic earlier this year, the struggle over naming the emerging technology recalls arguments about motorcars at the turn of the 20th century: Should they be called "automobiles," "horseless carriages" or something else?
Eventually, of course, they were just called cars, a generic term for a wheeled vehicle. Something similar may happen as self-driving technology emerges from experimental mode and becomes commonplace: "Driverless car" may eventually seem redundant.
Should that occur, we will need a term to describe a car that still needs a driver to steer it. Such labels that retroactively define displaced technologies--like "rotary telephone," "film camera" and "broadcast television"--have been dubbed "retronyms."
What retronym will do the job? "Maybe a human-driven car will have to be called a 'manual,' " Ms. La France writes. But I'm partial to a suggestion from her fellow Atlantic staff writer Ed Yong: "meatmobile," reminiscent of "meatspace," a retronym coined in the mid-1990s to describe the physical world (contrasting with "cyberspace"). Until self-driving technology is truly road-ready, however, we'll all be driving meatmobiles.
Credit: By Ben Zimmer
Subject: Traffic accidents & safety; Fatalities; Pilots; Names
People: Musk, Elon
Company / organization: Name: Google Inc; NAICS: 519130; Name: Tesla Motors Inc; NAICS: 336999; Name: Consumer Reports; NAICS: 511120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 26, 2016
Section: Life
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1814192551
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1814192551?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Raises Price of Autopilot Option by $500; Advanced driver-assistance programs are growing in popularity
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Aug 2016: n/a.
ProQuest document link
Abstract:
The upgrade will offer "material" enhancements to its performance; Autopilot includes adaptive cruise control, lane-keeping aids, automatic braking and other features allowing the car to drive itself on the highway under certain circumstances.
Full text: Tesla Motors Inc. raised the price of its driver-assist Autopilot option by 20%, or $500, the latest move by the Silicon Valley auto maker to adjust prices and options on its electric vehicles.
The move comes the same week that the company made a more capable battery pack available for its Model S sedan and Model X sport-utility vehicle. The new 100 kilowatt-hour batteries will enable the sedan to achieve as much as 315 miles on a charge and significantly increase acceleration times , the company said on Tuesday. It also takes the price of the car to $134,500.
Earlier in August, Tesla began offering a two-year, $593 a month lease on its base Model S sedan.
Advanced driver-assistance packages are growing in popularity as auto makers become more aggressive in marketing them or installing them on models at the point of production. Analysts consider features like automatic braking or adaptive cruise control to be among the most profitable components of a new vehicle sale when an auto maker offers those features as options.
Tesla's Autopilot now costs $3,000, a spokeswoman said. Other auto makers charge a variety of prices for active-safety packages, while some are beginning to include them as standard in certain vehicle ranges.
Honda Motor Co.'s system is considered less capable then Tesla's, but is about half the price. Volvo Car Corp. recently began selling its new S90 sedan with a standard "Pilot Assist" feature.
Tesla will soon launch an "8.0" version of its Autopilot, Chief Executive Elon Musk said during a recent conference call with news media. The upgrade will offer "material" enhancements to its performance; Autopilot includes adaptive cruise control, lane-keeping aids, automatic braking and other features allowing the car to drive itself on the highway under certain circumstances.
Autopilot came under scrutiny in late June when the National Highway Traffic Safety Administration said it launched an investigation into the system after a traffic fatality was connected to it. Mobileye NV, an important contributor of Autopilot computer chips and software, said it would stop supplying components to Tesla for the system due to disagreements over how it was deployed.
Mr. Musk has said Mobileye's decision doesn't affect Tesla's plans with Autopilot upgrades.
Write to John D. Stoll at john.stoll@wsj.com
Credit: By John D. Stoll
Subject: Traffic accidents & safety; Fatalities
People: Musk, Elon
Company / organization: Name: Volvo Car Corp; NAICS: 336111; Name: Mobileye NV; NAICS: 334511; Name: Honda Motor Co Ltd; NAICS: 336111, 336991, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 26, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1814192561
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1814192561?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla to Pay $422 Million to Bondholders, Raise Additional Funds; The disclosure comes as part of the auto maker's planned SolarCity merger, which is now valued at $2.4 billion
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Aug 2016: n/a.
ProQuest document link
Abstract:
The Palo Alto, Calif., company filed an S-4 registration document with the Securities and Exchange Commission Wednesday in relation to its proposed merger with SolarCity Corp. Elon Musk is the chairman of SolarCity and Tesla, and he has said the merger will save money and laid out plans for a more diverse company focused on batteries, solar energy, automobiles and heavier vehicles.
Full text: Corrections & Amplifications:
An earlier version of this article incorrectly stated Tesla could register as much as an additional 100.6 million shares. (Aug. 31)
Tesla Motors Inc. will pay out nearly a half-billion dollars to debtholders in the third quarter and raise additional funds by the end of the year to support a proposed merger and pay for the development of a cheaper electric car, a new battery factory and an expansion of retail operations.
The Palo Alto, Calif., company filed an S-4 registration document with the Securities and Exchange Commission Wednesday in relation to its proposed merger with SolarCity Corp. Elon Musk is the chairman of SolarCity and Tesla, and he has said the merger will save money and laid out plans for a more diverse company focused on batteries, solar energy, automobiles and heavier vehicles.
The document provided extensive detail on recent deliberations related to the merger, and indicates the deal is now valued at $2.4 billion based on the most-recent financial data. The tie-up, in which Tesla will absorb SolarCity, was initially valued at $2.8 billion in June and gradually scaled back since then.
The merger, subject to shareholder approval and expected to close by the end of the year, will put additional pressure on Tesla's liquidity levels. The auto maker staged a $1.7 billion equity raise in the second quarter and said Wednesday it will need to raise more funds via equity or debt before the end of the year.
The company, with $3.25 billion in total available liquidity as of June 30, had previously indicated additional financing is needed. The auto maker's development costs for products, battery production and retail operations (including the building of charging stations for customers) are high. Tesla continues to post net losses on its core car making business.
Adding to immediate pressure is the disclosure that Tesla expects to pay out $422 million by the end of September to holders of convertible notes.
The company has said that senior notes due in 2018 were convertible as early as the third quarter of 2016 at the holder's option. After repaying the principal amount of the conversion in cash, Tesla has $224 million in aggregate principal remaining on the 2018 notes outstanding.
Tesla separately said it could issue up to 15 million shares in relation to paying out SolarCity shareholders in the proposed merger, which is expected to lead to $150 million in cost savings. The deal still needs approval by shareholders at a special meeting.
In the filing, the company said its swap offer now values SolarCity at $24.16 a share, or roughly $2.4 billion based on SolarCity's 100.6 million shares outstanding.
Write to John D. Stoll at john.stoll@wsj.com
Credit: By John D. Stoll
Subject: Automobile industry; Stockholders
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Securities & Exchange Commission; NAICS: 926150; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 31, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1815372195
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1815372195?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Elon Musk Faces Cash Squeeze at Tesla, SolarCity; Two pillars of the entrepreneur's empire are facing financial crunches as he seeks to combine the two companies through a controversial acquisition
Author: Pulliam, Susan; Stoll, John D; Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Aug 2016: n/a.
ProQuest document link
Abstract:
"SolarCity needs emergency funds to keep operating, and without the debt they issued to insiders they wouldn't be able to cover their working capital," said Gordon Johnson, a managing director at Axiom Capital Management Inc. In its 10-year history, SolarCity has notched total revenue of just $1.5 billion, while amassing $3 billion in debt. Because the company's operating costs are high and its profit margins are thin, it depends on issuing debt. In the Wednesday filing, Tesla said it would again tap debt or equity markets by the end of 2016 to cover its costs of merging with SolarCity, developing a cheaper electric car, producing batteries and expanding retail operations.
Full text: Two pillars of Elon Musk's empire are facing financial crunches as the entrepreneur seeks to combine the two companies through a controversial acquisition.
Tesla Motors Inc., which makes electric cars, disclosed in a securities filing Wednesday that it has to pay $422 million to its bondholders in the third quarter, and that it will raise additional money by the end of the year. The purpose of the additional capital, among other things, is to support its proposed merger with home-solar company SolarCity Corp. Mr. Musk is the chairman of both companies.
The filing also revealed that in recent weeks, 15 institutional investors passed on either acquiring SolarCity or injecting equity into it. The company is having difficulty tapping the public markets amid the proposed merger and is facing a liquidity squeeze, the filing indicated. SolarCity's cash declined to $146 million on June 30, from $421 million a year earlier, the company has reported.
Mr. Musk ignited controversy in June when he proposed combining the two companies. Detractors characterized the proposal as a bailout for SolarCity. Mr. Musk said the deal will save money and create a more diverse company focused on batteries, solar energy, automobiles and heavier vehicles.
In an interview Wednesday, Mr. Musk said that he had envisioned Tesla's role in solar energy back in 2006 when he laid out his initial plan for the auto maker. The combination of the companies, he said, is intended to remove conflicts of interest created when the separate entities do business with one another.
A Tesla spokeswoman said the merger was "the best way for Tesla to bring an integrated clean energy product to market."
Last week, Mr. Musk and his cousins--SolarCity Chief Executive Lyndon Rive and its technology chief, Peter Rive--disclosed they would together buy more than 80% of a $124 million SolarCity bond issue. The bonds will pay an annual interest rate of 6.5% and mature in 18 months.
Mr. Musk said he bought half of the SolarCity bonds "as a show of faith in the company."
Before the bond deal was announced, SolarCity's advisers had asked Tesla to "consider providing SolarCity with short-term financing" amid the pending merger deal, according to Wednesday's filing. Mr. Musk said the bond sale was a better option.
"SolarCity needs emergency funds to keep operating, and without the debt they issued to insiders they wouldn't be able to cover their working capital," said Gordon Johnson, a managing director at Axiom Capital Management Inc.
In its 10-year history, SolarCity has notched total revenue of just $1.5 billion, while amassing $3 billion in debt. Because the company's operating costs are high and its profit margins are thin, it depends on issuing debt. SolarCity has a $250 million term loan due Dec. 31, and $55 million in bonds coming due between Sept. 3 and the end of the year.
Tesla's debt-to-equity ratio was 145.5% as of June 30, and SolarCity's was 375.6%, according to FactSet
Tesla said in Wednesday's filing it could issue up to 15 million shares to pay SolarCity shareholders to acquire their company. The filing said the stock-swap offer now values SolarCity at $24.16 a share, or roughly $2.4 billion based on Tesla's closing stock price June 21, before its offer was disclosed. Shareholders of both companies are likely to vote on the proposed deal in October.
Tesla has been able to regularly tap various sources of capital to sustain its operations. In the second quarter, it raised $1.7 billion from an equity offering, and its reserves also benefited from hundreds of thousands of $1,000 refundable deposits for its coming Model 3 vehicle.
Tesla's core business has burned more than $3 billion in cash dating back to late 2014. It has issued equity or convertible debt every year since its initial public offering in 2010.
In the Wednesday filing, Tesla said it would again tap debt or equity markets by the end of 2016 to cover its costs of merging with SolarCity, developing a cheaper electric car, producing batteries and expanding retail operations.
The filing indicated that Tesla's board of directors began seriously considering an acquisition of SolarCity following a board meeting on May 31. Earlier, in February, Mr. Musk suggested to Lyndon Rive, SolarCity's CEO, that they should consider a combination. But the Tesla board, at a Feb. 29 meeting, rejected the idea because of "the potential impact on Tesla management's time and resources," the filing said.
On June 21, Tesla announced on its blog that it had made a preliminary proposal to SolarCity. By the first week of July, SolarCity's liquidity had deteriorated further, the filing showed. At a July 6 meeting, representatives of SolarCity's outside counsel and bankers discussed SolarCity's options and its "near-term operational and liquidity position," the filing said.
At that meeting, the advisers also discussed another development. "Certain lenders appeared to be delaying funding certain financings of SolarCity as a result of the announcement of the Tesla proposal and that SolarCity was unable to access the equity capital markets as it regularly did as a result of the pending Tesla proposal," the filing said.
Between June 21 and SolarCity's ultimate acceptance of Tesla's offer, SolarCity's advisers considered 15 potential suitors, including one private-equity firm and several financial counterparties, according to the filing. By July 21, all the potential suitors except one had backed away, the filing said.
The next day, the final suitor dropped out as well because "it did not believe that it was in a position to make an acquisition proposal within the range of Tesla's original proposal," according to the filing.
Cassandra Sweet contributed to this article.
Credit: By Susan Pulliam, John D. Stoll and Charley Grant
Subject: Electric vehicles; Equity; Stockholders; Solar energy
People: Rive, Peter Rive, Lyndon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 31, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1815557680
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1815557680?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla: One of These Things Is Not Like the Others
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Aug 2016: n/a.
ProQuest document link
Abstract:
To conduct the valuation analysis, Evercore applied a range of price/earnings multiples "for market-leading, publicly traded disruptors."
Full text: What do electric cars have in common with clothing? More than you think.
That is according to an equity-value analysis of Tesla Motors, conducted by Evercore Group and released by Tesla on Wednesday. The analysis is part of the registration statement for Tesla's proposed merger with solar-energy upstart SolarCity.
The proposed deal, which must be approved by shareholders of both companies, has drawn criticism from some analysts and investors, since both companies burn significant amounts of cash and share a common chairman and largest shareholder, Elon Musk.
To conduct the valuation analysis, Evercore applied a range of price/earnings multiples "for market-leading, publicly traded disruptors." That list includes technology stalwarts such as Alphabet, Apple, Amazon.com, Facebook and Salesforce.com, in addition to Mobileye, Netflix and TripAdvisor.
Rounding out the peer group is the sportswear manufacturer Under Armour.
The stock market currently values Tesla on par with the highest of highfliers--its shares trade at more than 300 times expected forward earnings, according to FactSet figures.
But Tesla has quite a bit of catching up to do in terms of financial performance. The auto maker booked revenue of $4.6 billion and free cash flow of negative-$1.6 billion over the past four quarters. That significantly lags behind the peer group, which booked a median $7.6 billion in sales and generated median free cash flow of $1.2 billion. Traditional auto makers likewise generate sales and cash that dwarf Tesla's performance.
It seems the electric-auto upstart has some growing up to do.
Subject: Automobile industry
People: Musk, Elon
Company / organization: Name: Netflix Inc; NAICS: 532230, 518210, 443142; Name: Amazon.com Inc; NAICS: 454111; Name: Tesla Motors Inc; NAICS: 336999; Name: Under Armour Inc; NAICS: 315220, 315280
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Aug 31, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1815587492
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1815587492?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further re production or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Elon Musk Faces Cash Squeeze at Tesla, SolarCity; Two pillars of the entrepreneur's empire are facing financial crunches as he seeks to combine the two companies through a controversial acquisition
Author: Pulliam, Susan; Stoll, John D; Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Sep 2016: n/a.
ProQuest document link
Abstract:
"SolarCity needs emergency funds to keep operating, and without the debt they issued to insiders they wouldn't be able to cover their working capital," said Gordon Johnson, a managing director at Axiom Capital Management Inc. In its 10-year history, SolarCity has notched total revenue of just $1.5 billion, while amassing $3 billion in debt. Because the company's operating costs are high and its profit margins are thin, it depends on issuing debt. In the Wednesday filing, Tesla said it would again tap debt or equity markets by the end of 2016 to cover its costs of merging with SolarCity, developing a cheaper electric car, producing batteries and expanding retail operations.
Full text: Two pillars of Elon Musk's empire are facing financial crunches as the entrepreneur seeks to combine the two companies through a controversial acquisition.
Tesla Motors Inc., which makes electric cars, disclosed in a securities filing Wednesday that it has to pay $422 million to its bondholders in the third quarter, and that it will raise additional money by the end of the year. The purpose of the additional capital, among other things, is to support its proposed merger with home-solar company SolarCity Corp. Mr. Musk is the chairman of both companies.
The filing also revealed that in recent weeks, 15 institutional investors passed on either acquiring SolarCity or injecting equity into it. The company is having difficulty tapping the public markets amid the proposed merger and is facing a liquidity squeeze, the filing indicated. SolarCity's cash declined to $146 million on June 30, from $421 million a year earlier, the company has reported.
Mr. Musk ignited controversy in June when he proposed combining the two companies. Detractors characterized the proposal as a bailout for SolarCity. Mr. Musk said the deal will save money and create a more diverse company focused on batteries, solar energy, automobiles and heavier vehicles.
In an interview Wednesday, Mr. Musk said that he had envisioned Tesla's role in solar energy back in 2006 when he laid out his initial plan for the auto maker. The combination of the companies, he said, is intended to remove conflicts of interest created when the separate entities do business with one another.
A Tesla spokeswoman said the merger was "the best way for Tesla to bring an integrated clean energy product to market."
Last week, Mr. Musk and his cousins--SolarCity Chief Executive Lyndon Rive and its technology chief, Peter Rive--disclosed they would together buy more than 80% of a $124 million SolarCity bond issue. The bonds will pay an annual interest rate of 6.5% and mature in 18 months.
Mr. Musk said he bought half of the SolarCity bonds "as a show of faith in the company."
Before the bond deal was announced, SolarCity's advisers had asked Tesla to "consider providing SolarCity with short-term financing" amid the pending merger deal, according to Wednesday's filing. Mr. Musk said the bond sale was a better option.
"SolarCity needs emergency funds to keep operating, and without the debt they issued to insiders they wouldn't be able to cover their working capital," said Gordon Johnson, a managing director at Axiom Capital Management Inc.
In its 10-year history, SolarCity has notched total revenue of just $1.5 billion, while amassing $3 billion in debt. Because the company's operating costs are high and its profit margins are thin, it depends on issuing debt. SolarCity has a $250 million term loan due Dec. 31, and $55 million in bonds coming due between Sept. 3 and the end of the year.
Tesla's debt-to-equity ratio was 145.5% as of June 30, and SolarCity's was 375.6%, according to FactSet
Tesla said in Wednesday's filing it could issue up to 15 million shares to pay SolarCity shareholders to acquire their company. The filing said the stock-swap offer now values SolarCity at $24.16 a share, or roughly $2.4 billion based on Tesla's closing stock price June 21, before its offer was disclosed. Shareholders of both companies are likely to vote on the proposed deal in October.
Tesla has been able to regularly tap various sources of capital to sustain its operations. In the second quarter, it raised $1.7 billion from an equity offering, and its reserves also benefited from hundreds of thousands of $1,000 refundable deposits for its coming Model 3 vehicle.
Tesla's core business has burned more than $3 billion in cash dating back to late 2014. It has issued equity or convertible debt every year since its initial public offering in 2010.
In the Wednesday filing, Tesla said it would again tap debt or equity markets by the end of 2016 to cover its costs of merging with SolarCity, developing a cheaper electric car, producing batteries and expanding retail operations.
The filing indicated that Tesla's board of directors began seriously considering an acquisition of SolarCity following a board meeting on May 31. Earlier, in February, Mr. Musk suggested to Lyndon Rive, SolarCity's CEO, that they should consider a combination. But the Tesla board, at a Feb. 29 meeting, rejected the idea because of "the potential impact on Tesla management's time and resources," the filing said.
On June 21, Tesla announced on its blog that it had made a preliminary proposal to SolarCity. By the first week of July, SolarCity's liquidity had deteriorated further, the filing showed. At a July 6 meeting, representatives of SolarCity's outside counsel and bankers discussed SolarCity's options and its "near-term operational and liquidity position," the filing said.
At that meeting, the advisers also discussed another development. "Certain lenders appeared to be delaying funding certain financings of SolarCity as a result of the announcement of the Tesla proposal and that SolarCity was unable to access the equity capital markets as it regularly did as a result of the pending Tesla proposal," the filing said.
Between June 21 and SolarCity's ultimate acceptance of Tesla's offer, SolarCity's advisers considered 15 potential suitors, including one private-equity firm and several financial counterparties, according to the filing. By July 21, all the potential suitors except one had backed away, the filing said.
The next day, the final suitor dropped out as well because "it did not believe that it was in a position to make an acquisition proposal within the range of Tesla's original proposal," according to the filing.
Cassandra Sweet contributed to this article.
Related Coverage
* Tesla: One of These Things Is Not Like the Others
* Heard on the Street: A Double Dose of Risk for Tesla in SolarCity Deal (Aug. 1, 2016)
* Tesla and SolarCity Agree to $2.6 Billion Deal (Aug. 1, 2016)
* Tesla CEO Elon Musk Expects SolarCity Acquisition Vote to Pass by Two-Thirds Majority (July 19, 2016)
Credit: By Susan Pulliam, John D. Stoll and Charley Grant
Subject: Electric vehicles; Equity; Stockholders; Solar energy
People: Rive, Peter Rive, Lyndon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Sep 1, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1815559734
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1815559734?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla, Dutch Authorities Investigate Fatal Car Crash; Tesla vehicle crashes south of Amsterdam, killing occupant; company declines to say if self-driving system engaged at the time
Author: Sylvers, Eric
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Sep 2016: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. and Dutch authorities Wednesday were investigating the fatal crash of one of the company's vehicles in a town south of Amsterdam, raising the specter that the car's self-driving system might have played a role in the driver's death.
Full text: Tesla Motors Inc. and Dutch authorities Wednesday were investigating the fatal crash of one of the company's vehicles in a town south of Amsterdam, raising the specter that the car's self-driving system might have played a role in the driver's death.
Tesla had technical personnel at the scene taking part in the investigation though no other details were immediately available and the company declined to say whether the self-driving features were being used at the time of the crash. The Associated Press reported that the driver, a 53-year-old man, died when his car slammed into a tree and burst into flames.
"We are undertaking a full investigation and will share our findings as soon as possible," the Tesla spokesman said.
Silicon Valley-based Tesla has received intense scrutiny over the past several months after the company revealed that a 40-year-old driver died in Florida when his Model S crashed into the side of a truck while he was using the self-driving system that the company calls "Autopilot." The car's automatic emergency-braking sensors didn't detect the white side of tractor trailer in the bright sunshine.
Other car makers have also been drawing the eyes of regulators, some of whom think the companies are overstating the capabilities self-driving features before they are safe for real-world use.
Write to Eric Sylvers at eric.sylvers@wsj.com
Credit: By Eric Sylvers
Location: Florida
Company / organization: Name: Associated Press; NAICS: 519110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Sep 7, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1817337686
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1817337686?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Says Car in Netherlands Not on Autopilot at Time of Crash; Driver died in crash south of Amsterdam this week
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Sep 2016: n/a.
ProQuest document link
Abstract:
Tesla's Autopilot system, which is a step toward self-driving cars, uses cameras, radar and sensors to steer the vehicle, adjust its speed and change lanes.
Full text: Tesla Motors Inc.'s "Autopilot" feature wasn't in use during a deadly crash of one of its vehicles south of Amsterdam, the company said.
"We can confirm from the car's logs that Autopilot was not engaged at any time during the drive cycle and that, consistent with the damage that was observed after the vehicle struck the tree, the vehicle was being driven at more than 155 km/h," Tesla said Thursday in a prepared statement.
The driver didn't survive. Tesla and Dutch authorities were investigating the incident Wednesday .
Tesla crashes have come under scrutiny since the company revealed in June that a Model S ran into a truck in Florida while in its Autopilot feature was engaged. The driver died, marking the first death in which Tesla's Autopilot was active. That crash has ignited a broader debate about autonomous vehicle technology in development by auto makers and tech companies.
Tesla's Autopilot system, which is a step toward self-driving cars, uses cameras, radar and sensors to steer the vehicle, adjust its speed and change lanes. Drivers must acknowledge, when they activate Autopilot, that the system is in beta-test and that they are responsible for the vehicle. The system includes safeguards intended to ensure that drivers keep hands on the wheel to take control if needed.
The National Highway Traffic Safety Administration in June said it was investigating the Florida crash, which occurred in May. The agency disclosed in July that it was seeking documents and details of additional crashes involving Tesla's Autopilot feature.
Credit: By Tim Higgins
Subject: Traffic accidents & safety; Fatalities
Location: Florida
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Sep 8, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1817622175
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1817622175?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Overheard: Tesla's Downside Risk May Not Be So Risky; Cowen analysts say stock could fall as much as 20%, hardly the stuff of investor nightmares
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Sep 2016: n/a.
ProQuest document link
Abstract:
The analysts said the electric-car manufacturer faces a "material amount of execution risk over the next 12-18 months" from the rollout and because nearly every major car company in the world is moving onto its turf.
Full text: Tesla Motors has bet the company on a successful rollout of its new Model 3 sedan. It is promising a huge ramp-up in production, it is raising billions to fund the launch, and it is vowing to deliver the car at a price far below what it has ever achieved.
Those are big risks, say analysts at Cowen, which initiated coverage on Tesla with an "underperform" rating on Thursday. The analysts said the electric-car manufacturer faces a "material amount of execution risk over the next 12-18 months" from the rollout and because nearly every major car company in the world is moving onto its turf.
If things don't work out, how far can Tesla's $200 stock fall? The Cowen analysts say 20%, hardly the stuff of investor nightmares.
Given the risks Tesla is taking, such a modest downside seems less plausible than the highest price target on the street: Dougherty's prediction of $500 a share.
Subject: Automobile industry
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Sep 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1817744199
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1817744199?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Plans Software Update for Autopilot Feature Within Two Weeks; Auto maker says revision may have prevented first fatal crash in May
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Sep 2016: n/a.
ProQuest document link
Abstract:
The National Highway Traffic Safety Administration is investigating the crash, focusing on the emergency-braking and forward-collision warnings.
Full text: Tesla Motors Inc. is changing the way its Autopilot system works following the fatal crash in May of a car that was driving under semi-autonomous control.
The revision, which Tesla Chief Executive Elon Musk outlined Sunday, will depend more on radar signals to help guide Tesla vehicles along roadways, and adds safeguards to keep drivers engaged at high speed.
The software updates will be rolled out within the next two weeks and delivered to vehicles over the air, he said. They will affect Tesla vehicles built since October 2014, before which the hardware used by Autopilot wasn't included.
Autopilot, which uses cameras, radar and sensors to steer vehicles and adjust their speed, has come under scrutiny since the Florida crash that killed Tesla driver Joshua Brown in May, the first known death of a driver using the system.
The car in the May 7 incident failed to brake automatically because the system didn't distinguish a truck's white trailer from the bright sky, Tesla has said.
The National Highway Traffic Safety Administration is investigating the crash, focusing on the emergency-braking and forward-collision warnings.
The changes announced on Sunday might have prevented the accident, Mr. Musk said.
Mr. Musk told reporters on a conference call that the changes will make the system even safer. "This is not going from bad to good. It's going from good to, I think, great."
"Ultimately, this will probably be a threefold improvement in safety" compared with the current version, Mr. Musk told reporters on a conference call. "This is not going from bad to good. It's going from good to, I think, great."
Autopilot is regarded as a major step toward self-driving cars, though Tesla warns users that the technology doesn't make Tesla vehicles autonomous and that drivers must remain ready to take control.
Despite those warnings, some experts have questioned whether the technology might lead users to rely too much on the vehicle's driving capabilities.
Consumer Reports, for example, wrote that Autopilot was "too much autonomy too soon ."
As part of the changes to Autopilot, the system will disengage if drivers ignore three warnings within the span of an hour to keep their hands on the wheel. To reactivate the system, the vehicle would have to be stopped and restarted.
Mr. Musk has vigorously defended the Autopilot technology, saying it improves safety. When activating the system, drivers must acknowledge by clicking on a screen that they are responsible for the vehicle.
Radar, which was added to Tesla vehicles in October 2014, had been a supplement to the onboard camera and image-processing technology, the company said Sunday.
Using radar, which detects objects by sending out pulses of electromagnetic waves to detect objects, to guide vehicles is complicated because the waves interact differently than light waves with objects in the roadway.
"The big problem in using radar to stop the car is avoiding false alarms," Mr. Musk wrote in a blog post on the company's website. "Slamming on the brakes is critical if you are about to hit something large and solid, but not if you are merely about to run over a soda can."
Part of the solution, according to Mr. Musk, is to take advantage of Tesla vehicles' ability to communicate with one another and collaborate on their understanding of road conditions. "The net effect of this...is that the car should almost always hit the brakes correctly even if a UFO were to land on the freeway in zero visibility conditions," Mr. Musk wrote.
Tesla's decision to update its radar software intensifies Mr. Musk's bet that radar is an effective technology to help cars navigate the world. Alphabet Inc.'s Google unit and others racing toward fully self-driving cars are counting on a technology known as lidar, which is similar to radar but uses lasers.
Mr. Musk reiterated on Sunday that he doesn't anticipate using lidar because it doesn't have the same capabilities as radar.
Asked whether the improvements would have prevented the fatal Florida crash, Mr. Musk said he believed so because the radar would have detected the trailer. "It would see a larger metal object across the road," he said.
Some Tesla drivers have admitted that Autopilot's success may have lulled them into a false sense of security . "I look down at my phone a little more than I used to," Jason Hughes, an Autopilot user from Hickory, N.C., told The Wall Street Journal in July. "People are overly confident in it, in my opinion. They think it can do magical things, but it can't go beyond what its sensors tell it."
Mr. Musk appeared to acknowledge this on Sunday, saying that Autopilot accidents are far more likely among expert users then novices. The current system alerts drivers when their hands have been off the wheel too long depending upon driving conditions, and it slows the vehicles if they don't respond. Some users ignored 10 warnings to keep their hands on the wheel in an hour, he said. "They get very comfortable with it and repeatedly ignore the car's warnings," he said. "We really want to avoid that situation.".
As he responds to Tesla safety concerns, Mr. Musk also faces controversy for proposing in June to combine Tesla and SolarCity Corp., where he is chairman, and questions why one of his Space Exploration Technologies Corp. rockets exploded during routine fueling on Sept. 1.
Write to Tim Higgins at Tim.Higgins@dowjones.com
Further reading
* Eye-Tracking Technology for Cars Promises to Keep Drivers Alert (Sept. 9)
* Tesla Says Car in Netherlands Not on Autopilot at Time of Crash (Sept. 8)
* Auto Makers Pull Back on Promoting Self-Driving Features (Sept. 4)
* Tesla Draws Scrutiny After Autopilot Feature Linked to a Death (June 30)
Credit: By Tim Higgins
Subject: Traffic accidents & safety; Vehicles
Location: Florida
Company / organization: Name: Consumer Reports; NAICS: 511120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Sep 11, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1818224899
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1818224899?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Plans Software Update for Autopilot Feature Within Two Weeks; Auto maker says revision may have prevented first fatal crash in May
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Sep 2016: n/a.
ProQuest document link
Abstract:
The National Highway Traffic Safety Administration is investigating the crash, focusing on the emergency-braking and forward-collision warnings. "The net effect of this...is that the car should almost always hit the brakes correctly even if a UFO were to land on the freeway in zero visibility conditions," Mr. Musk wrote.
Full text: Tesla Motors Inc. is changing the way its Autopilot system works following the fatal crash in May of a car that was driving under semi-autonomous control.
The revision, which Tesla Chief Executive Elon Musk outlined Sunday, will depend more on radar signals to help guide Tesla vehicles along roadways, and adds safeguards to keep drivers engaged at high speed.
The software updates will be rolled out within the next two weeks and delivered to vehicles over the air, he said. They will affect Tesla vehicles built since October 2014, before which the hardware used by Autopilot wasn't included.
Autopilot, which uses cameras, radar and sensors to steer vehicles and adjust their speed, has come under scrutiny since the Florida crash that killed Tesla driver Joshua Brown in May, the first known death of a driver using the system.
The car in the May 7 incident failed to brake automatically because the system didn't distinguish a truck's white trailer from the bright sky, Tesla has said.
The National Highway Traffic Safety Administration is investigating the crash, focusing on the emergency-braking and forward-collision warnings.
The changes announced on Sunday might have prevented the accident, Mr. Musk said.
Mr. Musk told reporters on a conference call that the changes will make the system even safer.
"Ultimately, this will probably be a threefold improvement in safety" compared with the current version, Mr. Musk told reporters on a conference call. "This is not going from bad to good. It's going from good to, I think, great."
Autopilot is regarded as a major step toward self-driving cars, though Tesla warns users that the technology doesn't make Tesla vehicles autonomous and that drivers must remain ready to take control.
Despite those warnings, some experts have questioned whether the technology might lead users to rely too much on the vehicle's driving capabilities.
Consumer Reports, for example, wrote that Autopilot was "too much autonomy too soon ."
As part of the changes to Autopilot, the system will disengage if drivers ignore three warnings within the span of an hour to keep their hands on the wheel. To reactivate the system, the vehicle would have to be stopped and restarted.
Mr. Musk has vigorously defended the Autopilot technology, saying it improves safety. When activating the system, drivers must acknowledge by clicking on a screen that they are responsible for the vehicle.
Radar, which was added to Tesla vehicles in October 2014, had been a supplement to the onboard camera and image-processing technology, the company said Sunday.
Using radar, which detects objects by sending out pulses of electromagnetic waves to detect objects, to guide vehicles is complicated because the waves interact differently than light waves with objects in the roadway.
"The big problem in using radar to stop the car is avoiding false alarms," Mr. Musk wrote in a blog post on the company's website. "Slamming on the brakes is critical if you are about to hit something large and solid, but not if you are merely about to run over a soda can."
Part of the solution, according to Mr. Musk, is to take advantage of Tesla vehicles' ability to communicate with one another and collaborate on their understanding of road conditions. "The net effect of this...is that the car should almost always hit the brakes correctly even if a UFO were to land on the freeway in zero visibility conditions," Mr. Musk wrote.
Tesla's decision to update its radar software intensifies Mr. Musk's bet that radar is an effective technology to help cars navigate the world. Alphabet Inc.'s Google unit and others racing toward fully self-driving cars are counting on a technology known as lidar, which is similar to radar but uses lasers.
Mr. Musk reiterated on Sunday that he doesn't anticipate using lidar because it doesn't have the same capabilities as radar.
Asked whether the improvements would have prevented the fatal Florida crash, Mr. Musk said he believed so because the radar would have detected the trailer. "It would see a larger metal object across the road," he said.
Some Tesla drivers have admitted that Autopilot's success may have lulled them into a false sense of security . "I look down at my phone a little more than I used to," Jason Hughes, an Autopilot user from Hickory, N.C., told The Wall Street Journal in July. "People are overly confident in it, in my opinion. They think it can do magical things, but it can't go beyond what its sensors tell it."
Mr. Musk appeared to acknowledge this on Sunday, saying that Autopilot accidents are far more likely among expert users then novices. The current system alerts drivers when their hands have been off the wheel too long depending upon driving conditions, and it slows the vehicles if they don't respond. Some users ignored 10 warnings to keep their hands on the wheel in an hour, he said. "They get very comfortable with it and repeatedly ignore the car's warnings," he said. "We really want to avoid that situation.".
As he responds to Tesla safety concerns, Mr. Musk also faces controversy for proposing in June to combine Tesla and SolarCity Corp., where he is chairman, and questions why one of his Space Exploration Technologies Corp. rockets exploded during routine fueling on Sept. 1.
Write to Tim Higgins at Tim.Higgins@dowjones.com
Further reading
* Eye-Tracking Technology for Cars Promises to Keep Drivers Alert (Sept. 9)
* Tesla Says Car in Netherlands Not on Autopilot at Time of Crash (Sept. 8)
* Auto Makers Pull Back on Promoting Self-Driving Features (Sept. 4)
* Tesla Draws Scrutiny After Autopilot Feature Linked to a Death (June 30)
Credit: By Tim Higgins
Subject: Traffic accidents & safety; Vehicles
Location: Florida
Company / organization: Name: Consumer Reports; NAICS: 511120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Sep 12, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1818254247
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1818254247?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Tesla's Autopilot Receives Revamp
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Sep 2016: B.2.
ProQuest document link
Abstract:
The National Highway Traffic Safety Administration is investigating the crash, focusing on the emergency-braking and forward-collision warnings.
Full text: Tesla Motors Inc. is changing the way its Autopilot system works following the fatal crash in May of a car that was driving under semi-autonomous control.
The revision, which Tesla Chief Executive Elon Musk outlined Sunday, will depend more on radar signals to help guide Tesla vehicles along roadways, and adds safeguards to keep drivers engaged at high speed.
The software updates will be rolled out within the next two weeks and delivered to vehicles over the air, he said. They will affect Tesla vehicles built since October 2014, before which the hardware used by Autopilot wasn't included.
Autopilot, which uses cameras, radar and sensors to steer vehicles and adjust their speed, has come under scrutiny since the Florida crash that killed Tesla driver Joshua Brown in May, the first known death of a driver using the system.
The car in the May 7 incident failed to brake automatically because the system didn't distinguish a truck's white trailer from the bright sky, Tesla has said.
The National Highway Traffic Safety Administration is investigating the crash, focusing on the emergency-braking and forward-collision warnings.
The changes announced on Sunday might have prevented the accident, Mr. Musk said.
"Ultimately, this will probably be a threefold improvement in safety" compared with the current version, Mr. Musk told reporters on a conference call. "This is not going from bad to good. It's going from good to, I think, great."
Autopilot is regarded as a major step toward self-driving cars, though Tesla warns users that the technology doesn't make Tesla vehicles autonomous and that drivers must remain ready to take control.
Despite those warnings, some experts have questioned whether the technology might lead users to rely too much on the vehicle's driving capabilities.
Consumer Reports, for example, wrote that Autopilot was "too much autonomy too soon."
As part of the changes to Autopilot, the system will disengage if drivers ignore three warnings within the span of an hour to keep their hands on the wheel. To reactivate the system, the vehicle would have to be stopped and restarted.
Mr. Musk has vigorously defended the Autopilot technology, saying it improves safety. When activating the system, drivers must acknowledge by clicking on a screen that they are responsible for the vehicle.
Radar, which was added to Tesla vehicles in October 2014, had been a supplement to the onboard camera and image-processing technology, the company said Sunday.
Using radar, which detects objects by sending out pulses of electromagnetic waves to detect objects, to guide vehicles is complicated because the waves interact differently than light waves with objects in the roadway.
"The big problem in using radar to stop the car is avoiding false alarms," Mr. Musk wrote in a blog post on the company's website. "Slamming on the brakes is critical if you are about to hit something large and solid, but not if you are merely about to run over a soda can."
Part of the solution, according to Mr. Musk, is to take advantage of Tesla vehicles' ability to communicate with one another and collaborate on their understanding of road conditions. "The net effect of this . . . is that the car should almost always hit the brakes correctly even if a UFO were to land on the freeway in zero visibility conditions," Mr. Musk wrote.
Tesla's decision to update its radar software intensifies Mr. Musk's bet that radar is an effective technology to help cars navigate the world. Alphabet Inc.'s Google unit and others racing toward fully self-driving cars are counting on a technology known as lidar, which is similar to radar but uses lasers.
Mr. Musk reiterated on Sunday that he doesn't anticipate using lidar because it doesn't have the same capabilities as radar.
Credit: By Tim Higgins
Subject: Autonomous vehicles; Automobile safety
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2016
Publication date: Sep 12, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1818284711
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1818284711?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Competition to Reinvent the Car Is Getting Fiercer; European electric-vehicle leader BMW needs to watch its tail--and not just because of Tesla.
Author: Wilmot, Stephen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Sep 2016: n/a.
ProQuest document link
Abstract:
Last week the company also announced negotiations with Chinese manufacturer Jianghuai to produce battery-driven cars in China, which is the world's largest market for electric cars thanks to generous subsidies.
Full text: BMW used to be well ahead of its peers in the race to become Europe's Tesla. But with sales of its first electric car weak and competition ramping up, BMW is considering an overhaul of its electric-vehicle strategy.
That could be costly for investors.
In March, the company proudly unveiled plans to launch the next all-electric car within its "i" series by 2021. Now German press reports say management is considering the more radical option of releasing electric versions of existing flagship models, including the Mini Cooper and 3 Series.
Sales of BMW's all-electric i3 model, which was released in 2013, have been disappointing, particularly compared with those of Tesla. Preorders of Tesla's Model 3, which won't be delivered until late next year, stood at 373,000 in May. BMW has sold about 50,000 i3s.
Tesla isn't the only challenge: BMW's German rivals have also turned up their electric-vehicle rhetoric over the summer.
In June, Volkswagen, which is desperate to rehabilitate its environmental credentials after the diesel scandal, said it would aim to sell 2 million to 3 million e-cars by 2025--accounting for up to a quarter of all sales. Last week the company also announced negotiations with Chinese manufacturer Jianghuai to produce battery-driven cars in China, which is the world's largest market for electric cars thanks to generous subsidies.
Not to be left out, Daimler plans to unveil an electric concept car at next month's Paris Auto Show. Leaks suggest this will be accompanied by bullish plans to release at least six electric cars.
Competition to reinvent the car is getting increasingly fierce. With huge investments needed--Tesla is raising billions to produce the Model 3--the increasingly competitive environment poses a risk to incumbent car makers' margins. Their shares are cheap for good reason.
Write to Stephen Wilmot at stephen.wilmot@wsj.com
Credit: By Stephen Wilmot
Subject: Electric vehicles; Automobile industry; Automobile sales
Location: Europe
Company / organization: Name: Volkswagen AG; NAICS: 336111, 336390
Product name: Mini Cooper
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Sep 12, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1818401589
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1818401589?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
GM Says Chevy Bolt Electric Car to Get 238-Mile Range; EPA-estimated mileage leapfrogs the projected 215-mile range of Tesla's similarly priced Model 3
Author: Colias, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Sep 2016: n/a.
ProQuest document link
Abstract:
Despite tepid demand for electric vehicles and hybrids, car companies continue to develop them in part to comply with toughening federal fuel-economy standards GM North America President Alan Batey in a statement called the 238-mile range "a game changer for the electric car segment" and confirmed the car would arrive at dealerships "later this year."
Full text: General Motors Co. said its coming Chevrolet Bolt electric car will travel 238 miles on a single charge, giving GM a key marketing claim over Tesla Motors Inc. as the nation's largest auto maker prepares to begin deliveries of the first long-range, affordable electric vehicle this year.
Ever since GM revealed a concept of the Bolt in early 2015 , the Detroit auto maker has said only that its range would top 200 miles on a charge. The estimate of 238 miles disclosed on Tuesday leapfrogs the projected 215-mile range of Tesla's similarly priced Model 3, which is expected to reach the market in late 2017, about a year after the Bolt.
The range advantage could be an important selling point for GM as it seeks an early mover advantage for the Bolt, which GM insiders for years have referred to as their Tesla fighter. GM is looking to reassert itself as an industry leader in electric cars following Tesla's surging popularity in recent years.
Still, the Bolt and Model 3 herald big improvements over the roughly 100-mile range of today's electric cars and could appeal to a broader swath of potential buyers, analysts say. So-called range anxiety--drivers' fear of the battery running out of juice on longer trips--is one factor that has kept a lid on electric-car sales since auto makers began marketing them several years ago.
After years of competing against luxury rivals by selling high-price EVs, Tesla's strategy is converging with GM and other volume producers as it takes aim at the mass market with its Model 3. Tesla's larger Model S sedan has long topped 200 miles, although that car is priced two to four times higher than the Model 3 and Bolt, depending on the model. A new Model S version with a bigger, 100 kilowatt-hour battery pack is estimated to travel 315 miles on a single charge.
Chevy's 2017 Bolt EV is expected to be the industry's first mainstream, long-range electric car when it arrives in showrooms late this year. GM hasn't announced the sticker price but has said it would go for around $30,000 after a $7,500 federal tax credit. Tesla Chief Executive Elon Musk has pegged a $35,000 starting price for the Model 3 before any tax incentives, implying that it could be priced just below the Bolt.
The 238-mile figure was determined under the Environmental Protection Agency's testing cycle for electric cars, which includes a combination of highway and city driving and replicates various road scenarios, a GM spokesman said. It will appear as the EPA-estimated range on the Bolt's window sticker once it goes on sale.
So far, the Bolt hasn't been able to generate the level of buzz around the Model 3, which garnered a crush of media coverage when Mr. Musk unveiled it earlier this year . Around 400,000 people put down $1,000 deposits each to preorder the car.
Both GM and Tesla face the challenge of selling electric cars amid a prolonged period of low gas prices, which has forced auto makers in recent years to offer profit-sapping discounts to lure buyers. Despite tepid demand for electric vehicles and hybrids, car companies continue to develop them in part to comply with toughening federal fuel-economy standards
GM North America President Alan Batey in a statement called the 238-mile range "a game changer for the electric car segment" and confirmed the car would arrive at dealerships "later this year."
Chevy also sells the Volt, a plug-in hybrid that can travel 53 miles on electric power before a gasoline-powered generator takes over to power the battery.
Write to Mike Colias at Mike.Colias@wsj.com
More on Autos
* Heard on the Street: Why Bolt's Range Is a Buzz Kill for Tesla Bulls
* VW Uncertain on a U.S. Future for Its Diesel Cars
* Competition to Reinvent the Car Is Getting Fiercer
* Tesla Plans Software Update for Autopilot Feature
* Eye-Tracking Technology for Cars Promises to Keep Drivers Alert
Credit: By Mike Colias
Subject: Electric vehicles; Automobile industry
Location: Detroit Michigan
People: Musk, Elon
Company / organization: Name: Environmental Protection Agency--EPA; NAICS: 924110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Sep 13, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1818682076
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1818682076?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Why Bolt's Range Is a Buzz Kill for Tesla Bulls; The Chevrolet Bolt's competitive range gives Tesla reason to sweat in the electric-car race
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Sep 2016: n/a.
ProQuest document link
Abstract:
Get financial insights and commentary on global investing from The Wall Street Journal's Heard on the Street team.
Full text: Eighty percent of success is showing up, or so the saying goes. That means the clock is ticking a little faster for Tesla Motors shareholders.
General Motors announced Tuesday that the new Chevrolet Bolt has a driving range of 238 miles. That is a similar range to Tesla Motors' advertised range of 215 miles for its Model 3 sedan.
The two cars also are set to be similarly priced. Based on public statements, the Bolt will go for about $30,000 after tax incentives, with the Model 3 priced a little lower.
Availability, however, could be a critical difference. The Bolt will be ready for purchase before the year is out. Tesla, meanwhile, says the Model 3 won't enter production until the middle of 2017. And of course Tesla has developed a reputation for not being able to meet its publicly stated deadlines.
Granted, Tesla has a significant brand advantage among electric-car consumers, and Chevrolet has a long way to go before the Bolt becomes the market's standard bearer.
But the Bolt has earned positive early reviews and boasts some features that suggest the car won't be a pushover. The car seats five people and offers connectivity services like Apple CarPlay and Android Auto.
Meanwhile, that brand equity won't do Tesla much good if it can't deliver the Model 3 on time at the price point it has promised and at a consistent quality. Tesla also will have to show it can make money selling the Model 3; the company lost more than $20,000 per car delivered in the second quarter while selling much pricier cars that should carry a higher profit margin.
And once this one-horse race becomes a two-horse one, it won't stay that way for long; other automakers are developing competitors . Entering the mass market and making money is challenging under the best of circumstances and especially as an upstart that is a late arrival.
Get financial insights and commentary on global investing from The Wall Street Journal's Heard on the Street team. Subscribe to the podcast.
Credit: By Charley Grant
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: General Motors Corp; NAICS: 336111, 333415, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Sep 13, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1818721400
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1818721400?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: GM's Bolt to Give Tesla a Mileage Jolt --- Mileage of coming affordable electric vehicle throws down gauntlet for Tesla
Author: Colias, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 Sep 2016: B.3.
ProQuest document link
Abstract:
Despite tepid demand for electric vehicles and hybrids, car companies continue to develop them in part to comply with toughening federal fuel-economy standards GM North America President Alan Batey in a statement called the 238-mile range "a game changer for the electric car segment" and confirmed the car would arrive at dealerships "later this year."
Full text: General Motors Co. said its coming Chevrolet Bolt electric car will travel 238 miles on a single charge, giving GM a key marketing claim over Tesla Motors Inc. as the nation's largest auto maker prepares to begin deliveries of the first long-range, affordable electric vehicle this year.
Ever since GM revealed a concept of the Bolt in early 2015, the Detroit auto maker has said only that its range would top 200 miles on a charge. The estimate of 238 miles disclosed Tuesday leapfrogs the projected 215-mile range of Tesla's similarly priced Model 3, which is expected to reach the market in late 2017, about a year after the Bolt.
The range advantage could be an important selling point for GM as it seeks an early mover advantage for the Bolt, which GM insiders for years have referred to as their Tesla fighter. GM is looking to reassert itself as an industry leader in electric cars following Tesla's surging popularity in recent years.
Still, the Bolt and Model 3 herald big improvements over the roughly 100-mile range of today's electric cars and could appeal to a broader swath of potential buyers, analysts say. So-called range anxiety -- drivers' fear of the battery running out of juice on longer trips -- is one factor that has kept a lid on electric-car sales since auto makers began marketing them several years ago.
After years of competing against luxury rivals by selling high-price EVs, Tesla's strategy is converging with GM and other volume producers as it takes aim at the mass market with its Model 3. Tesla's larger Model S sedan has long topped 200 miles, although that car is priced two to four times higher than the Model 3 and Bolt, depending on the model. A new Model S version with a bigger, 100 kilowatt-hour battery pack is estimated to travel 315 miles on a single charge.
Chevy's 2017 Bolt EV is expected to be the industry's first mainstream, long-range electric car when it arrives in showrooms late this year. GM hasn't announced the sticker price but has said it would go for around $30,000 after a $7,500 federal tax credit. Tesla Chief Executive Elon Musk has pegged a $35,000 starting price for the Model 3 before any tax incentives, implying that it could be priced just below the Bolt.
The 238-mile figure was determined using the Environmental Protection Agency's test cycle for electric cars, which includes a combination of highway and city driving and replicates various road scenarios, GM said. It will appear as the EPA-estimated range on the Bolt's window sticker once it goes on sale.
So far, the Bolt hasn't been able to generate the level of buzz around the Model 3, which garnered a crush of media coverage when Mr. Musk unveiled it earlier this year. Around 400,000 people put down $1,000 deposits each to preorder the car.
Both GM and Tesla face the challenge of selling electric cars amid a prolonged period of low gas prices, which has forced auto makers in recent years to offer profit-sapping discounts to lure buyers. Despite tepid demand for electric vehicles and hybrids, car companies continue to develop them in part to comply with toughening federal fuel-economy standards
GM North America President Alan Batey in a statement called the 238-mile range "a game changer for the electric car segment" and confirmed the car would arrive at dealerships "later this year."
Chevy also sells the Volt, a plug-in hybrid that can travel 53 miles on electric power before a gasoline-powered generator takes over to power the battery.
Credit: By Mike Colias
Subject: Automobile industry; Electric vehicles
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: General Motors Corp; NAICS: 333415, 336111, 336390
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Sep 14, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1819079723
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1819079723?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Seeks Information on Model S Fatal Crash in China; Auto maker unable to determine if Autopilot system was involved in January accident
Author: Higgins, Tim; Cui, Carolyn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Sep 2016: n/a.
ProQuest document link
Abstract:
"Because of the damage caused by the collision, the car was physically incapable of transmitting log data to our servers and we therefore have no way of knowing whether or not Autopilot was engaged at the time of the crash."
Full text: Tesla Motors Inc. said a fatal crash in China this year involving one of its vehicles was so extensive that it has been unable to verify the owner's claim that its Autopilot driving system was engaged at the time of the accident.
China Central Television, the state broadcaster known as CCTV, on Wednesday reported that 23-year-old Gao Yaning died in a crash in the northeastern province of Hebei while driving a Tesla Model S on Jan. 20.
His father, Gao Jubin, filed a lawsuit in July against a Chinese dealer who sold the Tesla, CCTV reported, alleging that his son used the Autopilot feature at the time of the crash. The suit cites video footage, taken from inside the car, showing that the car maintained its speed when it hit a road sweeper.
"We were saddened to learn of the death of our customer's son," the Palo Alto, Calif., auto maker said. "We have tried repeatedly to work with our customer to investigate the cause of the crash, but he has not provided us with any additional information that would allow us to do so."
Tesla's Autopilot system uses cameras, radar and sensors to summon, steer, and adjust its cars' speed. Drivers must remain ready to take control of a vehicle, it says.
Scrutiny over the semiautonomous-driving option has risen since Tesla disclosed in June that a Model S had crashed in Florida , killing the driver. At the time, Tesla said the May 7 incident was "the first known fatality in just over 130 million miles where Autopilot was activated."
That crash sparked an investigation of Autopilot system by U.S. car-safety regulators. It remains ongoing.
The CCTV report on Wednesday raises the question whether the China crash was the first fatal accident involving Autopilot. A lawyer who represents the father of the son involved in the crash said his client isn't after a financial remedy from the car maker.
"We want to...let the public know that the 'automatic driving' technology has some flaws and people shouldn't try it lightly," Wang Beibei, the family's lawyer, said on CCTV.
"We take any incident with our vehicles very seriously and immediately reached out to our customer when we learned of the crash," Tesla said in Wednesday's statement. "Because of the damage caused by the collision, the car was physically incapable of transmitting log data to our servers and we therefore have no way of knowing whether or not Autopilot was engaged at the time of the crash."
On Sunday, Chief Executive Officer Elon Musk announced plans to update the Autopilot software in Tesla vehicles within the next two weeks with changes that he said would have likely prevented the Florida crash. Autopilot will depend more on radar signals as part of the changes.
Write to Carolyn Cui at carolyn.cui@wsj.com
Read More
* Tesla Plans Software Update for Autopilot Feature Within Two Weeks
* Eye-Tracking Technology for Cars Promises to Keep Drivers Alert
* Tesla Draws Scrutiny After Autopilot Feature Linked to a Death
Credit: By Tim Higgins and Carolyn Cui
Subject: Fatalities; Vehicles
Location: China Florida
People: Musk, Elon
Company / organization: Name: China Central Television; NAICS: 515120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Sep 14, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1819235326
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1819235326?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Michigan Denies Tesla Request to Open Dealership; State officials rule against electric-car maker's application for license
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Sep 2016: n/a.
ProQuest document link
Abstract: None available.
Full text: Officials in Michigan have rejected Tesla Motors Inc.'s request to open a company-owned dealership, a move that indicates the home state for Ford Motor Co. and General Motors Co. will stick to its ban on selling new cars directly to consumers.
The Michigan Secretary of State's office this week ruled against the Silicon Valley electric car maker's selling vehicles in the state without using franchised dealers. Gisgie Dávila Gendreau, a spokeswoman for the office, confirmed the state's decision Thursday in an e-mail.
Tesla has been seeking an application for a new auto dealership license in Michigan, one of several states to continue banning direct sales of automobiles by manufacturers.
"The license was denied because state law explicitly requires a dealer to have a bona fide contract with an auto manufacturer to sell its vehicles," Ms. Dávila Gendreau said. "Tesla has told the department it does not have one, and cannot comply with that requirement."
The Palo Alto, Calif., company filed an application last November for permission to open a dealership and service center in Michigan with the Secretary of State, which handles dealership licenses.
Tesla has for years been trying to steer around state franchise laws so it can set up its own retail locations, but it has faced intense resistance from franchise automobile dealerships and auto makers.
Dealership owners carry heavy sway among state lawmakers, often arguing the auto maker would unfairly cut out the middleman with a business model that involves selling directly to customers.
A spokeswoman for Tesla didn't immediately respond to a request to comment. Previously, the company has said a formal denial in Michigan could prompt it to pursue additional legal avenues. A hearing officer's decision may be appealed to the court.
The Detroit News earlier reported the ruling, which was dated Sept. 12 and followed a hearing held Sept. 7.
Credit: By Tim Higgins
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Sep 15, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1819542254
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1819542254?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Michigan Denies Tesla Request to Open Dealership; State officials rule against electric-car maker's application for license
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Sep 2016: n/a.
ProQuest document link
Abstract: None available.
Full text: Officials in Michigan have rejected Tesla Motors Inc.'s request to open a company-owned dealership, a move that indicates the home state for Ford Motor Co. and General Motors Co. will stick to its ban on selling new cars directly to consumers.
The Michigan Secretary of State's office this week ruled against the Silicon Valley electric-car maker's selling vehicles in the state without using franchised dealers.
Gisgie Dávila Gendreau, a spokeswoman for the office, confirmed the state's decision Thursday in an e-mail.
Tesla has been seeking an application for a new auto dealership license in Michigan, one of several states to continue banning direct sales of automobiles by manufacturers.
"The license was denied because state law explicitly requires a dealer to have a bona fide contract with an auto manufacturer to sell its vehicles," Ms. Dávila Gendreau said.
"Tesla has told the department it does not have one, and cannot comply with that requirement," she added.
The Palo Alto, Calif., company filed an application last November for permission to open a dealership and service center in Michigan with the Secretary of State, which handles dealership licenses.
Tesla has for years been trying to steer around state franchise laws so it can set up its own retail locations, but it has faced intense resistance from franchise automobile dealerships and auto makers.
Dealership owners carry heavy sway among state lawmakers, often arguing the auto maker would unfairly cut out the middleman with a business model that involves selling directly to customers.
"At the urging of local car dealers and GM, Michigan law was changed two years ago to prevent Michigan consumers from buying cars from a Tesla store within the state," Tesla said in a prepared statement. "As part of the process of challenging the legality of that law, Tesla applied for a license in Michigan. Tesla will continue to take steps to defend the rights of Michigan consumers."
Previously, the company has said a formal denial in Michigan could prompt it to pursue additional legal avenues.
A hearing officer's decision may be appealed to the court.
The Detroit News earlier reported the ruling, which was dated Sept. 12 and followed a hearing held Sept. 7.
Credit: By Tim Higgins
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Sep 16, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1819571130
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1819571130?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Michigan Denies Tesla's Request For Dealership
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]16 Sep 2016: B.3.
ProQuest document link
Abstract:
Officials in Michigan have rejected Tesla Motors Inc.'s request to open a company-owned dealership, a move that indicates the home state for Ford Motor Co. and General Motors Co. will stick to its ban on selling new cars directly to consumers.
Full text: Officials in Michigan have rejected Tesla Motors Inc.'s request to open a company-owned dealership, a move that indicates the home state for Ford Motor Co. and General Motors Co. will stick to its ban on selling new cars directly to consumers.
The Michigan Secretary of State's office this week ruled against the Silicon Valley electric-car maker's selling vehicles in the state without using franchised dealers.
Gisgie Davila Gendreau, a spokeswoman for the office, confirmed the state's decision Thursday in an e-mail.
Tesla has been seeking an application for a new auto dealership license in Michigan, one of several states to continue banning direct sales of automobiles by manufacturers.
"The license was denied because state law explicitly requires a dealer to have a bona fide contract with an auto manufacturer to sell its vehicles," Ms. Davila Gendreau said.
"Tesla has told the department it does not have one, and cannot comply with that requirement," she added.
The Palo Alto, Calif., company filed an application last November for permission to open a dealership and service center in Michigan with the Secretary of State.
Tesla has for years been trying to steer around state franchise laws so it can set up its own retail locations, but it has faced intense resistance from franchise automobile dealerships and auto makers.
Dealership owners carry heavy sway among state lawmakers, often arguing the auto maker would unfairly cut out the middleman with a business model that involves selling directly to customers.
"At the urging of local car dealers and GM, Michigan law was changed two years ago to prevent Michigan consumers from buying cars from a Tesla store within the state," Tesla said in a prepared statement. "As part of the process of challenging the legality of that law, Tesla applied for a license in Michigan. Tesla will continue to take steps to defend the rights of Michigan consumers."
The Detroit News earlier reported the ruling, which was dated Sept. 12 and followed a hearing held Sept. 7.
Credit: By Tim Higgins
Subject: State laws; Automobile dealers; Electric vehicles
Location: Michigan
Company / organization: Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Sep 16, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1819678363
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1819678363?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla, Mobileye Accelerate War of Words Over Autopilot; Safety-gear maker claims warning to Elon Musk in 2015 regarding use as hands-free
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Sep 2016: n/a.
ProQuest document link
Abstract:
Mobileye N.V. raised concerns with Tesla Motors Inc. Chief Executive Elon Musk more than a year ago about allowing its Autopilot system to be used for hands-free control of a vehicle, the computer-vision supplier said on Friday, escalating its public spat with the auto maker.
Full text: Mobileye N.V. raised concerns with Tesla Motors Inc. Chief Executive Elon Musk more than a year ago about allowing its Autopilot system to be used for hands-free control of a vehicle, the computer-vision supplier said on Friday, escalating its public spat with the auto maker.
Tesla and Mobileye have been locked in a war of words for weeks following the Israeli supplier saying it would no longer provide computer chips and algorithms to the electric vehicle maker. Mobileye sold Tesla important components for its semiautonomous Autopilot system, which came under fire in late June after a traffic fatality was linked to the technology.
The split has taken on an unusually high profile given the intense interest in Tesla's Autopilot and Mobileye's position as a leading company in supplying semiautonomous-driving technology. Although Mobileye has a long list of customers, its relationship with Tesla helped put it on the map.
Mobileye's claim that it warned Tesla executives comes as federal highway safety regulators work with the auto maker on investigating a May crash in Florida involving a driver, Joshua Brown, relying on Autopilot to drive the car. Mr. Brown failed to see an oncoming truck, according to Tesla, and he was killed after his Model S collided with the truck's trailer.
Top executives at the two companies have been trading barbs, including comments made earlier this week by Mobileye Chairman Amnon Shashua. In an interview with Reuters, he accused Tesla of "pushing the envelope in terms of safety" with its Autopilot system, saying it wasn't "designed to cover all possible crash situations in a safe manner."
On Thursday, Tesla answered back with a statement saying the supplier had pulled out of its relationship with the electric car maker because of concerns that the company was developing its own in-house capabilities.
"Tesla has been developing its own vision capability in-house for some time with the goal of accelerating performance improvements," the auto maker said. "After learning that Tesla would be deploying this product, Mobileye attempted to force Tesla to discontinue this development, pay them more, and use their products in future hardware."
Mr. Musk on Sunday detailed changes to be made to Autopilot, including a greater dependence on radar, that he says may have prevented the fatal crash.
Earlier Friday, Mr. Musk said in a post on social media that he hoped to start shipping a world-wide rollout of the updated software Wednesday "if no last minute issues discovered."
Mobileye disputes Tesla's claim that they split because of Tesla's internal ambitions.
"As for Tesla's claim that Mobileye was threatened by Tesla's internal computer vision efforts, the company has little knowledge of these efforts other than awareness that Tesla has put together a small team," Mobileye said.
Mobileye's Mr. Shashua expressed to Mr. Musk in May 2015 "safety concerns regarding the use of Autopilot hands-free," the supplier said.
"After a subsequent face-to-face meeting, Tesla's CEO confirmed that activation of Autopilot would be 'hands on,' Mobileye said on Friday. "Despite this confirmation, Autopilot was rolled out in late 2015 with a hands-free activation mode. Mobileye has made substantial efforts since then to take more control on how this project can be steered to a proper functional safety system."
Asked about the latest Mobileye statement, a Tesla spokeswoman pointed to the company's Thursday comment.
Credit: By Tim Higgins
Subject: Automobile industry; Electric vehicles
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Sep 16, 2016
Section: Tec h
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1819961731
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1819961731?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Supplier Hits Tesla On Safety
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 Sep 2016: B.3.
ProQuest document link
Abstract:
Mobileye N.V. raised concerns with Tesla Motors Inc. Chief Executive Elon Musk more than a year ago about allowing its Autopilot system to be used for hands-free control of a vehicle, the computer-vision supplier said on Friday, escalating its public spat with the auto maker.
Full text: Mobileye N.V. raised concerns with Tesla Motors Inc. Chief Executive Elon Musk more than a year ago about allowing its Autopilot system to be used for hands-free control of a vehicle, the computer-vision supplier said on Friday, escalating its public spat with the auto maker.
Tesla and Mobileye have been locked in a war of words for weeks following the Israeli supplier saying it would no longer provide computer chips and algorithms to the electric vehicle maker. Mobileye sold Tesla important components for its semiautonomous Autopilot system, which came under fire in late June after a traffic fatality was linked to the technology.
The split has taken on an unusually high profile given the intense interest in Tesla's Autopilot and Mobileye's position as a leading company in supplying semiautonomous-driving technology. Although Mobileye has a long list of customers, its relationship with Tesla helped put it on the map.
Mobileye's claim that it warned Tesla executives comes as federal highway safety regulators work with the auto maker on investigating a May crash in Florida involving a driver, Joshua Brown, relying on Autopilot to drive the car. Mr. Brown failed to see an oncoming truck, according to Tesla, and he was killed after his Model S collided with the truck's trailer.
Top executives at the two companies have been trading barbs, including comments made earlier this week by Mobileye Chairman Amnon Shashua. In an interview with Reuters, he accused Tesla of "pushing the envelope in terms of safety" with its Autopilot system, saying it wasn't "designed to cover all possible crash situations in a safe manner."
On Thursday, Tesla answered back with a statement saying the supplier had pulled out of its relationship with the electric car maker because of concerns that the company was developing its own in-house capabilities.
"Tesla has been developing its own vision capability in-house for some time with the goal of accelerating performance improvements," the auto maker said. "After learning that Tesla would be deploying this product, Mobileye attempted to force Tesla to discontinue this development, pay them more, and use their products in future hardware."
Mr. Musk on Sunday detailed changes to be made to Autopilot, including a greater dependence on radar, that he says may have prevented the fatal crash.
Earlier Friday, Mr. Musk said in a post on social media that he hoped to start shipping a world-wide rollout of the updated software Wednesday "if no last minute issues discovered."
Mobileye disputes Tesla's claim that they split because of Tesla's internal ambitions.
"As for Tesla's claim that Mobileye was threatened by Tesla's internal computer vision efforts, the company has little knowledge of these efforts other than awareness that Tesla has put together a small team," Mobileye said.
Mobileye's Mr. Shashua expressed to Mr. Musk in May 2015 "safety concerns regarding the use of Autopilot hands-free," the supplier said.
"After a subsequent face-to-face meeting, Tesla's CEO confirmed that activation of Autopilot would be 'hands on,' Mobileye said on Friday. "Despite this confirmation, Autopilot was rolled out in late 2015 with a hands-free activation mode. Mobileye has made substantial efforts since then to take more control on how this project can be steered to a proper functional safety system."
Asked about the latest Mobileye statement, a Tesla spokeswoman pointed to the company's Thursday comment.
Credit: By Tim Higgins
Subject: Automobile industry; Electric vehicles; Autonomous vehicles
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: Mobileye NV; NAICS: 334511
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Sep 17, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1820252595
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1820252595?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tesla's Merger With SolarCity May Be Delayed by Lawsuits; Two pension funds and two individuals had filed lawsuits earlier this month
Author: Sweet, Cassandra; Pulliam, Susan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Sep 2016: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. disclosed in a regulatory filing Monday that its proposed merger with SolarCity Corp. could be delayed by shareholder lawsuits, adding to the volatility for cash-strapped SolarCity, which is selling assets and cutting costs as it seeks to survive until the deal can close.
Full text: Tesla Motors Inc. disclosed in a regulatory filing Monday that its proposed merger with SolarCity Corp. could be delayed by shareholder lawsuits, adding to the volatility for cash-strapped SolarCity, which is selling assets and cutting costs as it seeks to survive until the deal can close.
The lawsuits, filed by two individuals and two pension funds earlier this month, claim that the members of the Tesla board breached their fiduciary duties in connection with the proposed merger, and that certain insiders would be unjustly enriched by the companies' combination, according to a regulatory document Tesla filed Monday.
SolarCity is chaired by Elon Musk, Tesla's chief executive, who owns about 20% of the shares
in both companies .
It was unclear whether the lawsuits might delay Tesla's planned shareholder vote on the merger, which the company had earlier said it planned to schedule this week. The plaintiffs are the City of Riviera Beach Police Pension Fund, the Arkansas Teacher Retirement System, Ellen Prasinos and P. Evan Stephens.
"Simply because someone uses litigation to try to delay an acquisition does not mean it will be successful," Tesla said in an emailed statement. "At this point, it is not yet known if anyone will even end up pursuing such a request. If anyone does, Tesla will oppose it."
SolarCity shares have plummeted by two-thirds this year and closed Friday at $17.50--a significant discount to the implied price of about $22 a share of its $2.4 billion deal with Tesla--as some analysts question whether the transaction will happen.
The home solar-panel installer has lost money each year since it went public in December 2012, and its sales and other costs have consistently outpaced its revenue. It spent $438 million on sales, administrative and research costs this year through June, about 42% more than revenue. It was down to $146 million in unrestricted cash as of June 30, from $362 million at the end of March.
As it seeks to survive as a stand-alone company until its merger with Tesla--and possibly beyond if the deal doesn't go through--SolarCity is selling more solar panels to homeowners for cash, rather than its traditional business model of leasing the panels and retaining ownership.
It is planning to sell more shares in solar panels it owns to other investors, as it did earlier this month when it raised $305 million in a cash equity transaction with Quantum Strategic Partners Ltd., the hedge fund of billionaire investor George Soros. And it has laid off employees and contractors, shut sales offices and overhauled its sales and marketing department, said SolarCity Chief Executive Lyndon Rive.
Further reading
* Tesla and SolarCity Agree to $2.6 Billion Deal
* Elon Musk Faces Cash Squeeze at Tesla, SolarCity
* Will Elon Musk's Fans Save Tesla Deal?
* SolarCity Losses Widen on Higher Expenses
* Dealpolitik: SolarCity Snafu Casts More Doubt on Fairness Opinions
"Our cash balance at the end of Q3 will be higher than the end of Q2, and our end-of-Q4 cash balance is scheduled to be higher than the end of Q3," Mr. Rive said in an interview last week, prior to Tesla's regulatory filing. The company declined to say how many people it had let go, or how much it hoped to raise in asset sales.
SolarCity is currently selling about 30% of the panels it installs on home rooftops for cash, up from 10% earlier this year and less than 5% last year. It aims to boost that number to half or more by the end of this year.
The company's strategy to sell more panels for cash "will generate a larger amount up front to fund the growth and working capital the company needs," Mr. Rive said. A typical six-kilowatt home solar array sells for about $18,840, on average, according to GTM Research.
SolarCity's cash crunch comes at a difficult moment for the home solar industry: some analysts are forecasting that the rapid growth the sector has enjoyed in recent years is slowing.
Bloomberg New Energy Finance is predicting 0.3% growth in the home solar market in 2017, blaming a nationwide drop in conventional power prices and reductions in state solar incentives.
GTM Research and the Solar Energy Industries Association predict 19% growth next year, down from an expected 23% increase this year and 66% in 2015.
SolarCity has lowered its forecast for the volume of panels it plans to install this year to 900 to 1,000 megawatts, down from 1,250 megawatts earlier this year.
Lynn Jurich, Chief Executive of Sunrun Inc., said she expects the residential solar market will grow at least 20% for the next several years, driven by falling equipment prices and growing consumer demand for clean energy.
"That growth rate would be the envy of many industries," she said.
SolarCity is banking on synergies with Tesla that it believes will cut its costs. But some analysts are questioning whether the deal will be completed.
Thomas Burnett, head of research at Wall Street Access, a brokerage firm that provides research to investors who wager on mergers and acquisitions, now estimates the odds are "no better than 50-50," compared with his estimate in July of 80% odds the deal would be approved.
While SolarCity is focused on completing the deal with Tesla, it will explore finding another strategic partner if the deal doesn't pan out , and believes it can find one, said SolarCity board member Nancy Pfund
"As a leader in a huge market that is growing very quickly, SolarCity has always been of interest to a lot of different companies," she said. "People look to SolarCity for leadership and financing in the distribution solar revolution."
Tim Higgins contributed to this article.
Credit: By Cassandra Sweet and Susan Pulliam
Subject: Corporate profiles; Shareholder voting; Litigation; Stockholders
People: Soros, George
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publicationdate: Sep 19, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1820653812
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1820653812?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla's Merger With SolarCity May Be Delayed by Lawsuits
Author: Sweet, Cassandra; Pulliam, Susan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Sep 2016: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. disclosed in a regulatory filing Monday that its proposed merger with SolarCity Corp. could be delayed by shareholder lawsuits, adding to the volatility for cash-strapped SolarCity, which is selling assets and cutting costs as it seeks to survive until the deal can close.
Full text: Tesla Motors Inc. disclosed in a regulatory filing Monday that its proposed merger with SolarCity Corp. could be delayed by shareholder lawsuits, adding to the volatility for cash-strapped SolarCity, which is selling assets and cutting costs as it seeks to survive until the deal can close.
The lawsuits, filed by two individuals and two pension funds earlier this month, claim that the members of the Tesla board breached their fiduciary duties in connection with the proposed merger, and that certain insiders would be unjustly enriched by the companies' combination, according to a regulatory document Tesla filed Monday.
SolarCity is chaired by Elon Musk, Tesla's chief executive, who owns about 20% of the shares in both companies.
It was unclear whether the lawsuits might delay Tesla's planned shareholder vote on the merger, which the company had earlier said it planned to schedule this week. The plaintiffs are the City of Riviera Beach Police Pension Fund, the Arkansas Teacher Retirement System, Ellen Prasinos and P. Evan Stephens.
"Simply because someone uses litigation to try to delay an acquisition does not mean it will be successful," Tesla said in an emailed statement. "At this point, it is not yet known if anyone will even end up pursuing such a request. If anyone does, Tesla will oppose it."
SolarCity shares have plummeted by two-thirds this year and closed Friday at $17.50--a significant discount to the implied price of about $22 a share of its $2.4 billion deal with Tesla--as some analysts question whether the transaction will happen.
The home solar-panel installer has lost money each year since it went public in December 2012, and its sales and other costs have consistently outpaced its revenue. It spent $438 million on sales, administrative and research costs this year through June, about 42% more than revenue. It was down to $146 million in unrestricted cash as of June 30, from $362 million at the end of March.
As it seeks to survive as a stand-alone company until its merger with Tesla--and possibly beyond if the deal doesn't go through--SolarCity is selling more solar panels to homeowners for cash, rather than its traditional business model of leasing the panels and retaining ownership.
It is planning to sell more shares in solar panels it owns to other investors, as it did earlier this month when it raised $305 million in a cash equity transaction with Quantum Strategic Partners Ltd., the hedge fund of billionaire investor George Soros. And it has laid off employees and contractors, shut sales offices and overhauled its sales and marketing department, said SolarCity Chief Executive Lyndon Rive.
"Our cash balance at the end of Q3 will be higher than the end of Q2, and our end-of-Q4 cash balance is scheduled to be higher than the end of Q3," Mr. Rive said in an interview last week, before Tesla's regulatory filing. The company declined to say how many people it had let go, or how much it hoped to raise in asset sales.
SolarCity is currently selling about 30% of the panels it installs on home rooftops for cash, up from 10% earlier this year and less than 5% last year. It aims to boost that number to half or more by the end of this year.
The company's strategy to sell more panels for cash "will generate a larger amount up front to fund the growth and working capital the company needs," Mr. Rive said. A typical six-kilowatt home solar array sells for about $18,840, on average, according to GTM Research.
SolarCity's cash crunch comes at a difficult moment for the home solar industry: Some analysts are forecasting that the rapid growth the sector has enjoyed in recent years is slowing.
Bloomberg New Energy Finance is predicting 0.3% growth in the home solar market in 2017, blaming a nationwide drop in conventional power prices and reductions in state solar incentives.
GTM Research and the Solar Energy Industries Association predict 19% growth next year, down from an expected 23% increase this year and 66% in 2015.
SolarCity has lowered its forecast for the volume of panels it plans to install this year to 900 to 1,000 megawatts, down from 1,250 megawatts earlier this year.
Lynn Jurich, Chief Executive of Sunrun Inc., said she expects the residential solar market will grow at least 20% for the next several years, driven by falling equipment prices and growing consumer demand for clean energy.
"That growth rate would be the envy of many industries," she said.
SolarCity is banking on synergies with Tesla that it believes will cut its costs. But some analysts are questioning whether the deal will be completed.
Thomas Burnett, head of research at Wall Street Access, a brokerage firm that provides research to investors who wager on mergers and acquisitions, now estimates the odds are "no better than 50-50," compared with his estimate in July of 80% odds the deal would be approved.
While SolarCity is focused on completing the deal with Tesla, it will explore finding another strategic partner if the deal doesn't pan out, and believes it can find one, said SolarCity board member Nancy Pfund
"As a leader in a huge market that is growing very quickly, SolarCity has always been of interest to a lot of different companies," she said. "People look to SolarCity for leadership and financing in the distribution solar revolution."
Silver Lake Kraftwerk, the growth-equity arm of technology investor Silver Lake, initially invested in SolarCity in 2012 and sold its stake the following year after the company went public in late 2012. Silver Lake Kraftwerk agreed to invest $100 million in the company in 2015.
--Tim Higgins contributed to this article.
Write to Cassandra Sweet at cassandra.sweet@wsj.com and Susan Pulliam at susan.pulliam@wsj.com
Credit: By Cassandra Sweet and Susan Pulliam
Subject: Corporate profiles; Shareholder voting; Litigation; Stockholders
People: Musk, Elon Soros, George
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Sep 19, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1820670606
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1820670606?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall St reet Journal
Suits Cloud SolarCity Deal --- Tesla holders claim board failed its duties and merger would unfairly bail out insiders
Author: Sweet, Cassandra; Pulliam, Susan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Sep 2016: B.1.
ProQuest document link
Abstract:
Tesla Motors Inc. said on Monday that its proposed about $2.3 billion merger with SolarCity Corp. could be delayed by shareholder lawsuits, adding to uncertainty for the cash-strapped home solar power company, which is selling assets and cutting costs until the deal can close.
Full text: Tesla Motors Inc. said on Monday that its proposed about $2.3 billion merger with SolarCity Corp. could be delayed by shareholder lawsuits, adding to uncertainty for the cash-strapped home solar power company, which is selling assets and cutting costs until the deal can close.
The four lawsuits, filed this month by two individuals and two pension funds, allege that members of Tesla's board failed to carry out their fiduciary duties involving the proposed merger, and that insiders would be unjustly enriched by the companies' combination, according to Monday's regulatory filing.
SolarCity Chairman Elon Musk also is the chief executive of Tesla. He owns about 20% of the shares in both companies. Through a spokeswoman, SolarCity declined to comment beyond the filing.
It wasn't clear whether the lawsuits would put off Tesla's shareholder vote on the merger, which the company earlier had said it planned to schedule this week. Plaintiffs include the Arkansas Teacher Retirement System, City of Riviera Beach Police Pension Fund, Ellen Prasinos and P. Evan Stephens.
"Simply because someone uses litigation to try to delay an acquisition does not mean it will be successful," Tesla said. "At this point, it is not yet known if anyone will even end up pursuing such a request. If anyone does, Tesla will oppose it."
A delay would create more distraction for Tesla as it faces one of its largest challenges yet: bringing out a mass-market electric car, which it calls the Model 3. Strong interest in the $35,000 sedan led Mr. Musk to push up a 500,000-vehicles-a-year sales target by two years to 2018, from 2020.
Tesla has burned through more than $3 billion in cash since late 2014. The Palo Alto, Calif.-based company plans to tap the debt market or issue shares again before year's end, according to an August regulatory filing.
SolarCity shares have plummeted by two-thirds this year and closed Monday at $17.23 -- a significant discount to the implied Tesla deal price of about $22 a share -- as some Wall Street analysts questioned whether the merger will happen.
"The deal isn't in the best interests of Tesla in any way, shape or form," said Seth Ottensoser, an attorney for the Riviera Beach Police Pension Fund in Florida, one of the plaintiffs suing Tesla to block the merger. Buying SolarCity amounts to "bailing out their own investments," he said of Mr. Musk and other Tesla executives and board members who own SolarCity stock.
Spokesmen for plaintiffs in the other suits couldn't immediately be reached to comment.
The San Mateo, Calif.-based home solar-panel installer has been unprofitable each year since it went public in December 2012, and its sales and other costs have consistently outpaced its revenue.
Seeking to survive as a stand-alone company until its merger with Tesla -- and possibly beyond if the deal doesn't go through -- SolarCity has begun selling more solar panels to homeowners for cash, rather than its traditional business of leasing the panels and retaining ownership.
It also is planning to sell outside investors more shares in solar panels that it already it owns. Earlier this month, it raised $305 million through once such cash equity transaction with Quantum Strategic Partners Ltd., the hedge fund of billionaire investor George Soros. And it has laid off employees and contractors, shut sales offices and overhauled its sales and marketing department, said SolarCity Chief Executive Lyndon Rive.
SolarCity is selling about 30% of the home panels it installs for cash, up from 10% earlier this year and less than 5% last year.It aims to boost that share to half or more of such sales by year's end to "generate a larger amount up front to fund the growth and working capital the company needs,"Mr. Rive said.
SolarCity's cash crunch comes at a difficult moment for the home solar-panel industry: Some analysts are forecasting that the rapid growth the sector has enjoyed in recent years is slowing.
SolarCity has lowered its forecast for the volume of panels measured by power produced that it plans to install this year to between 900 and 1,000 megawatts, down from 1,250 megawatts earlier this year.
While SolarCity is focused on completing the deal with Tesla, it will explore finding another strategic partner if the deal doesn't pan out, and believes it can find one, said SolarCity board member Nancy Pfund.
---
Tim Higgins contributed to this article.
Credit: By Cassandra Sweet and Susan Pulliam
Subject: Shareholder voting; Acquisitions & mergers; Shareholder derivative suits; Bailouts
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: SolarCity Corp; NAICS: 221114, 238220, 333414
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Sep 20, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1820989988
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1820989988?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Family of Driver Killed in Tesla Crash in China Seeks Court Investigation; Driver Gao Yaning's family believes Model S's Autopilot function was engaged at time of fatal January collision
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Sep 2016: n/a.
ProQuest document link
Abstract:
The U.S. National Highway Traffic Safety Administration has said it would investigate the crash, one of a handful linked to the Autopilot system, which made its debut nearly a year ago and was designed to help drivers change lanes, maintain a safe speed and find parking spaces.
Full text: SHANGHAI--A Chinese man whose son was killed while driving a Tesla Motors Inc. vehicle applied to a local Beijing court to investigate whether the car's Autopilot driving system was engaged.
In January, 23-year-old Gao Yaning died in a crash in the northeastern province of Hebei while driving a Tesla Model S . Six months later his father, Gao Jubin, filed a lawsuit accusing Tesla of exaggerating Autopilot's capabilities. At a court hearing Tuesday, he asked for an independent investigation of the cause of the crash.
"The family insists the investigation should be done by a third party, rather than Tesla," said Cui Qiuna, a lawyer for the Gao family. The court will study the family's request.
The family believes the car was in Autopilot mode when it collided with a road sweeper, Ms. Cui said.
Tesla said the collision damage makes it impossible to determine, and that the family hasn't provided it with any additional information to allow it to investigate, despite repeated requests.
Tesla said in a statement after the hearing that even if Autopilot was engaged, it wasn't the cause of the collision. When the system is turned on it warns the driver to keep hands on the steering wheel, the car maker said, reinforced by repeated warnings to "be prepared to take over at any time." In this case, it said, the driver took no action even though the road sweeper "was visible for nearly 20 seconds."
Mr. Gao's traffic fatality was first reported last week by state broadcaster China Central Television, which said video footage taken by a camera inside the car showed the vehicle maintaining its speed as it crashed into the road sweeper. The report also quoted Chinese police as saying there was no evidence that the brakes had been applied.
In court Tuesday, Gao's family called on Tesla to admit its salespeople had exaggerated Autopilot's capabilities and publicly apologize for false advertising, said the family's lawyers. In addition, the family is seeking 10,000 yuan ($1,500) as compensation for the grief they have suffered because of the son's death.
The court in Beijing's Chaoqyang District didn't give a verdict on Tuesday, said the lawyers, who added it will hold another hearing on the family's request for an independent investigation.
Tesla revised the marketing of its Autopilot feature in China since mid-August, after a Beijing driver who sideswiped a parked car when the system was engaged accused the auto maker of overplaying its capabilities . There were no injuries.
It scaled back its description of Autopilot on its website and in other marketing materials from zi dong jia shi, meaning the car can drive itself, to zi dong fu zhu jia shi, meaning it is a driver-assist system. Tesla's China-based sales staff was told to make the system's limitations clear.
Scrutiny of the semiautonomous-driving option has risen since Tesla disclosed in June that a Model S using the system had crashed in Florida , killing the driver. The U.S. National Highway Traffic Safety Administration has said it would investigate the crash, one of a handful linked to the Autopilot system, which made its debut nearly a year ago and was designed to help drivers change lanes, maintain a safe speed and find parking spaces.
Several driverless-car advocates have criticized Autopilot for lulling drivers into believing the car is in control--as evidenced by videos that drivers have posted online showing themselves reading or even sitting in the back seat while the car drove itself--when in fact it requires them to remain alert.
Earlier this month Tesla Chief Executive Elon Musk announced plans to update the Autopilot software with changes, including making it rely more on the car's radar system, that he said likely would have prevented the Florida crash.
Rose Yu
Subject: Fatalities; Traffic accidents & safety
Location: Beijing China
Company / organization: Name: China Central Television; NAICS: 515120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Sep 20, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest documentID: 1820992895
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1820992895?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Family Asks Court To Probe Tesla Crash
Author: Anonymous
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]21 Sep 2016: B.7.
ProQuest document link
Abstract: None available.
Full text: SHANGHAI -- A Chinese man whose son was killed while driving a Tesla Motors Inc. vehicle applied to a local Beijing court to investigate whether the car's Autopilot driving system was engaged.
In January, 23-year-old Gao Yaning died in a crash in the northeastern province of Hebei while driving a Tesla Model S. Six months later his father, Gao Jubin, filed a lawsuit accusing Tesla of exaggerating Autopilot's capabilities.
At a court hearing Tuesday, he asked for an independent investigation of the cause of the crash. "The family insists the investigation should be done by a third party, rather than Tesla," said Cui Qiuna, a lawyer for the Gao family.
The court will study the family's request.
The family believes the car was in Autopilot mode when it collided with a road sweeper, Ms. Cui said.
Tesla said the collision damage makes it impossible to determine, and that the family hasn't provided it with any additional information to allow it to investigate, despite repeated requests.
Tesla said in a statement after the hearing that even if Autopilot was engaged, it wasn't the cause of the collision. When the system is turned on it warns the driver to keep hands on the steering wheel, the car maker said, reinforced by repeated warnings to "be prepared to take over at any time."
In this case, it said, the driver took no action even though the road sweeper "was visible for nearly 20 seconds."
The court in Beijing's Chaoqyang District didn't give a verdict on Tuesday, said the lawyers.
-- Rose Yu
Subject: Fatalities; Accident investigations; Litigation; Autonomous vehicles; Traffic accidents & safety
Location: Beijing China
People: Gao Yaning
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.7
Publication year: 2016
Publication date: Sep 21, 2016
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1821647886
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1821647886?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further rep roduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Chelsea Handler's Favorite Gadgets; The host of Netflix's 'Chelsea' on her love for her Tesla, the difficulty of streaming movies in a hotel room and the best pill cutter
Author: Kornelis, Chris
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Sep 2016: n/a.
ProQuest document link
Abstract:
[...]I use a stainless steel Contigo Autospout Sheffield water bottle [an insulated model] throughout the day because the ice inside never melts.
Full text: I travel with every possible medication that you could ever need for any sort of emergency--even if I'm going to Missouri. It's not an international thing. It's a life thing. Somebody gave me an Apex Deluxe Pill Splitter recently. It's really handy. You put in a pill, and it slices it down the middle.
My dad was a used-car dealer, so I had several used cars. All disappointments. My 2013 Tesla Model S is the best car I've ever had. It has my calendar in it, and when I'm driving to work I press a button to see what meetings I have and who that day's guest is. The car does more work than I do in terms of driving. When you're trying to get somewhere, you can't screw up driving it.
When I'm at the gym I listen to podcasts like "The Axe Files with David Axelrod." I just love him. I'm into that voice. I'm into anything he has to say. I heard his episode with [political columnist] S.E. Cupp, who I'd never heard of, and I was like, "Oh, this girl's great. We've got to have her on the show."
I like binge-watching. I like to take a Sunday and just watch everything. That O.J. Simpson doc that's 10 hours--"O.J.: Made in America"--I watched it in one day. That's what Sundays are for.
For an interview, I recently had to watch "Madonna: Truth or Dare" in a hotel. It took three of us--me, my hair-and-makeup person and the hotel tech person--two and a half hours to figure out how to stream to my Amazon Fire Stick to the hotel TV. It was very dramatic, but we got it done.
I play a lot of tennis. When I'm in L.A., I play about once or twice a week, and when I'm at my house in Spain I play every day. I use a Head Graphene XT Extreme MP racket. When I find a racket that I like, I buy eight of them, because I know I'll lose them. I think I'm down to two. I know, I sound like Mariah Carey right now.
I don't like anything room-temperature or warm. I like it cold, cold, cold. So I use a stainless steel Contigo Autospout Sheffield water bottle [an insulated model] throughout the day because the ice inside never melts. Whoever invented this is a genius.
Edited from an interview by Chris Kornelis
Credit: By Chris Kornelis
Location: Missouri
People: Cupp, S E Simpson, O J Carey, Mariah
Product name: Amazon Fire
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Sep 21, 2016
column: My Tech Essentials
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1821810479
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1821810479?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Files Suit to Sell Cars Directly to Consumers in Michigan; Auto maker argues that state law violates its constitutional rights, protects in-state rivals
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Sep 2016: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. filed suit Thursday after Michigan denied it a license to open a store to sell directly to customers, saying a state law violates its constitutional rights and protects hometown rivals such as General Motors Co. The suit, filed in U.S. District Court for the Western District of Michigan, names three state officials:
Full text: Tesla Motors Inc. filed suit Thursday after Michigan denied it a license to open a store to sell directly to customers, saying a state law violates its constitutional rights and protects hometown rivals such as General Motors Co.
The suit, filed in U.S. District Court for the Western District of Michigan, names three state officials: Michigan Gov. Rick Snyder, Attorney General Bill Schuette and Secretary of State Ruth Johnson, the latter whose department rejected Tesla's application for a dealership license last week .
"We are currently reviewing the suit," a spokeswoman for the attorney general's office said in a statement.
Tesla has been fighting state franchise laws around the country, trying to set up its own retail locations while facing intense resistance from independent franchise dealers and auto makers. A hodgepodge of state laws were originally set up to protect independent dealers from being closed by manufacturers.
The Palo Alto, Calif., auto maker argued Michigan is distinguishing without legitimate justification between manufacturer-owned dealerships and franchised dealerships not owned by auto makers.
"These irrational classifications do not further any legitimate government interest and exist solely for the purpose of protecting two discrete Michigan-based interest groups--Michigan's franchised auto dealers and Michigan-based manufacturers--from economic competition," Tesla said in the suit.
Tesla lawyers hope a 2013 federal appeals court ruling in New Orleans could bolster their case against such state franchise laws. The case involved an abbey trying to sell coffins during a casket shortage, only to find state law restricted sales to those licensed by the Louisiana Board of Funeral Directors. The court ruled in the abbey's favor .
Such "economic liberty" arguments have found favor among some circuit courts, Northwestern University law professor John McGinnis said.
"The argument is that these regulations have no public-regarding reason, they're just there for protectionism," he said. "It's still not clear that Tesla is going to win; I'm saying that this case is better or more plausible than it would've been a decade ago."
Tesla is also arguing that the state is impeding the free flow of commerce among the states.
Separately, Tesla on Thursday began updating software in its vehicles in North America, including revisions to Autopilot that Chief Executive Elon Musk has said likely would have prevented a fatal car crash in May .
Write to Tim Higgins at tim.higgins@wsj.com
Related
* Tesla Motors Fends Off Indiana Effort to Hinder Direct-Sales Methods (Feb. 25)
* Tesla Cleared to Sell Vehicles from Company-Owned Dealerships in N.J. (March 18, 2015)
* Michigan Governor Signs Anti-Tesla Bill (Oct. 21, 2014)
Credit: By Tim Higgins
Subject: Automobile dealers; Federal court decisions
Location: Michigan
People: Musk, Elon Snyder, Rick
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: District Court-US; NAICS: 922110; Name: Tesla Motors Inc; NAICS: 336999; Name: Northwestern University; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Sep 22, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1822171425
Document URL: https://login.ezproxy. uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1822171425?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Tesla Sues Michigan on Dealer Law
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]23 Sep 2016: B.3.
ProQuest document link
Abstract:
Tesla Motors Inc. filed suit Thursday after Michigan denied it a license to open a store to sell directly to customers, saying a state law violates its constitutional rights and protects hometown rivals such as General Motors Co. The suit, filed in U.S. District Court for the Western District of Michigan, names three state officials:
Full text: Tesla Motors Inc. filed suit Thursday after Michigan denied it a license to open a store to sell directly to customers, saying a state law violates its constitutional rights and protects hometown rivals such as General Motors Co.
The suit, filed in U.S. District Court for the Western District of Michigan, names three state officials: Michigan Gov. Rick Snyder, Attorney General Bill Schuette and Secretary of State Ruth Johnson. The latter's department rejected Tesla's application for a dealership license last week.
"We are currently reviewing the suit," said a spokeswoman for the attorney general's office.
Tesla's bid to open its own dealerships has faced fierce resistance around the country from independent franchise dealers and traditional auto makers. In some states, Tesla has had to fight to open stores while in others it has defended against dealers and auto makers looking to shut Tesla stores down. Independent automotive dealers traditionally have held sway in states where they have successfully urged legislators to create laws protecting them from being closed by manufacturers.
In 2014, Mr. Snyder enacted legislation that shut down Tesla's direct-to-customer sales in the state -- a bill GM had urged the governor to sign.
Tesla's suit seeks a permanent injunction to keep Michigan from enforcing the law. The Palo Alto, Calif., auto maker argues the state doesn't have a legitimate reason to bar a nonfranchise auto maker from selling in the state.
"These irrational classifications do not further any legitimate government interest and exist solely for the purpose of protecting two discrete Michigan-based interest groups -- Michigan's franchised auto dealers and Michigan-based manufacturers -- from economic competition," Tesla said in the suit.
Tesla lawyers hope a 2013 federal appeals court ruling in New Orleans could bolster their case against such state franchise laws. That case involved an abbey trying to sell coffins during a casket shortage, only to find state law restricted sales to those licensed by the Louisiana Board of Funeral Directors.
The court ruled in the abbey's favor. Such "economic liberty" arguments have found favor among some circuit courts, Northwestern University law professor John McGinnis said.
Tesla is also arguing that Michigan is impeding the free flow of commerce among the states.
Credit: By Tim Higgins
Subject: Litigation; Licenses; Automobile dealers
Location: Michigan
People: Snyder, Rick
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Sep 23, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1822323014
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1822323014?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
More Than Money at Stake in Tesla's SolarCity Deal; Adding the solar-panel developer to the mix would make the car maker's capital expenditures worse
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Sep 2016: n/a.
ProQuest document link
Abstract:
Write to Charley Grant at charles.grant@wsj.com Get financial insights and commentary on global investing from The Wall Street Journal's Heard on the Street team.
Full text: The vote on Tesla Motors' proposed merger with SolarCity is drawing nearer. That means Tesla shareholders have quite a dilemma to sort out.
Though Elon Musk, Tesla and SolarCity's chairman and largest shareholder, has termed the proposal a "no-brainer," the reality, at least for Tesla shareholders, is far more complex.
From a strictly financial perspective, the deal is something Tesla shareholders can do without . Tesla, of course, has significant ongoing cash needs without the additional burden from SolarCity. Though Tesla showed $3.2 billion in cash on its balance sheet as of June 30, that money is expected to burn quickly as Tesla prepares to bring the Model 3 sedan into production. Capital expenditures alone are expected to total $1.75 billion for the second half of the year.
Adding the struggling solar-panel developer to the mix would make this problem worse . SolarCity spent $766 million on operating expenses last year, nearly twice as much as its total revenue. Through June of this year its expenses hit $265 million, 42% more than its revenue in the first two quarters. Worse still, SolarCity has more than $3 billion in long-term debt on its books. Tesla has said it would need to raise fresh capital before the year is out, despite raising nearly $2 billion in equity financing in May.
Avoiding that burden would give Tesla more financial flexibility to launch the Model 3 on time and on budget. A successful Model 3 launch is essential for Tesla to justify its valuation, and that task becomes more urgent as legacy auto makers roll out new competition for the Model 3.
These circumstances amount to a strong reason to vote down the deal. Given the reasons for caution, such a result might normally spark a sharp rally in an acquirer's stock.
But, in Tesla's specific case, rejecting the merger isn't without its dangers. It would call into question investor confidence in Mr. Musk, which has heretofore been unbending. The financial consequences of that, while difficult to measure, could be significant. Tesla trades at nearly 250 times forward earnings, according to FactSet, exceptionally high for an auto maker. Belief in Mr. Musk's business acumen is a big reason why.
And there is significant shareholder overlap between the companies. Six of the 10 largest independent Tesla investors also own SolarCity, according to FactSet. SolarCity stock is down nearly 60% in the year to date; the deal falling through could push the shares even lower, perhaps sending it searching for a new partner.
For his investors, confidence in Mr. Musk has always trumped financial performance worries, which suggests this deal will go through. But that scenario means Tesla shareholders could end up biting off more than they can chew.
Write to Charley Grant at charles.grant@wsj.com
Get financial insights and commentary on global investing from The Wall Street Journal's Heard on the Street team. Subscribe to the podcast.
Credit: By Charley Grant
Subject: Equity financing; Investments; Capital expenditures; Stockholders
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Sep 26, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1823096379
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1823096379?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Str eet Journal
Business News: Germans Take Fight to Tesla --- Daimler, VW outline plans to dethrone U.S. electric-car king with new models
Author: Boston, William
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]30 Sep 2016: B.8.
ProQuest document link
Abstract:
The other competitors are making great progress." [...]government incentives have driven the adoption of electric vehicles in many markets.
Full text: PARIS -- Elon Musk has long had the stage to himself as he championed zero-emission vehicles, and his upstart company, Tesla Motors Inc., became the touchstone for battery-powered cars.
When nearly half a million Tesla fans paid $1,000 each this spring to reserve the company's next-generation Model 3 ahead of its late-2017 launch, many auto executives scoffed.
"Let's see if they can build them," Thomas Weber, board member in charge of research and development at Daimler AG, said at the time.
Now, the enormous hype around Tesla's Model 3 preorders, slowly rising consumer demand and looming emissions regulation appears to have jolted conventional auto makers into action.
At the Paris Auto Show, which begins this week, major auto makers unveiled plans to accelerate development of electric vehicles over the next few years.
Volkswagen AG, still reeling from its emissions cheating scandal sought to show it had cleaned up its act. It presented a concept vehicle, a prototype of a battery-powered, fully self-driving Golf that the company said could go into mass production in 2020. The company plans to release 30 new electric models by 2025.
"This car is to fight Tesla and the others, not our conventional competitors," said Herbert Diess, head of the Volkswagen passenger-car brand. "We have to take them very seriously. It's not rocket science. The other competitors are making great progress."
Until now, government incentives have driven the adoption of electric vehicles in many markets. Norway and the Netherlands, two of the smallest auto markets, became the biggest markets for electric vehicles through subsidies and other incentives to promote electric cars, which are still more expensive than conventional gasoline and diesel vehicles.
But over the next decade stricter emissions targets in Europe, the U.S. and China will increase the costs of developing conventional combustion engines. Falling battery costs will also make electric vehicles more competitive. By 2030, AlixPartners, a consultancy, predicts that electric vehicles will largely replace diesel, especially in smaller cars.
"This will go down as one of those years where it all started to change," says Andrew Bergbaum, managing director at AlixPartners.
European Union sales of electric vehicles -- battery-powered, extended-range vehicles, fuel cell vehicles, and plug-in hybrids -- rose 17% to 70,127 vehicles in the first half of this year from the same period last year, according to the European Automobile Manufacturers' Association.
In Paris, Daimler's Mercedes-Benz unveiled a battery-powered sport-utility vehicle, a direct competitor to Tesla's Model X, which will have a range of 310 miles on a single charge and is slated to launch in 2020. The vehicle will be part of a new sub-brand of Mercedes called EQ.
Daimler CEO Dieter Zetsche acknowledged that manufacturers were still suffering from an oversupply of electric vehicles in a market where consumer demand remained weak because of the high cost of the vehicles and a lack of charging stations, but suggested the situation could change soon.
"When will the customer independent of regulation and independent of incentives consider electric vehicles fully competitive [with] combustion engines? We are convinced that within our planning period we will see the tipping point," he said.
Sports car maker Porsche, owned by Volkswagen, took the wraps off a plug-in hybrid version of its sporty Panamera sedan that will combine a 462-horsepower 2.9-liter V-6 twin turbo engine built by Audi with an electric motor that has 136 horsepower.
But Porsche's big leap into electric autos comes with its Mission-E, which was unveiled at last year's Frankfurt Auto Show and is expected to be built beginning in 2020.
Paris also will see the launch of a number of mass-market electric cars.
Volkswagen plans 30 new electric vehicle models over the next decade; by 2025, one of every four cars it sells will be pure electric or plug-in hybrid, the company has said.
Credit: By William Boston
Subject: Low emission vehicles; Automobile shows; Automobile industry; Electric vehicles
People: Musk, Elon Diess, Herbert
Company / organization: Name: European Union; NAICS: 926110, 928120; Name: Tesla Motors Inc; NAICS: 336999; Name: Volkswagen AG; NAICS: 336111, 336390; Name: Daimler AG; NAICS: 336111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.8
Publication year: 2016
Publication date: Sep 30, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1824469562
Document URL: https://login.ezproxy.uta.edu/login? url=https://search-proquest-com.ezproxy.uta.edu/docview/1824469562?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla's Third-Quarter Sales More Than Double From a Year Ago; Company posts best sales quarter ever while looking to raise more cash to begin producing Model 3
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Oct 2016: n/a.
ProQuest document link
Abstract:
The Palo Alto, California auto maker said it delivered 15,800 Model S sedans and 8,700 Model X sport-utility vehicles during the July through September period.
Full text: Tesla Motors Inc. posted its best sales quarter ever ahead of efforts to raise additional cash that it will need to begin production of the Model 3 sedan.
Chief Executive Office Elon Musk wanted a strong third quarter to help build his case for why Tesla should raise more money for the Model 3's production line and for the Gigafactory. Global deliveries of Tesla vehicles more than doubled from the same quarter a year earlier to 24,500, the company said in a statement on Sunday.
The Palo Alto, California auto maker said it delivered 15,800 Model S sedans and 8,700 Model X sport-utility vehicles during the July through September period. An additional 5,500 vehicles were in transit to customers and will be counted in fourth quarter results, the company said.
The results suggest the revelation on June 30 that a Model S was involved in an earlier fatal crash in Florida involving the car's Autopilot hasn't affected sales. Federal regulators are investigating the crash, which the company said was the first known fatality involving the company's semiautonomous feature that can take control of the car in certain driving conditions. Tesla has since begun rolling out software updates to Autopilot that Mr. Musk say would have prevented the crash.
Tesla production in the third quarter rose to 25,185, a 37% gain from the second quarter. Tesla had previously said it expected to produce 50,000 vehicles in the second half of 2016 after delivering fewer than 30,000 vehicles during the first six months of the year.
Tesla on Sunday reiterated that guidance and said sales and production during the fourth quarter should be at or slightly better than the third quarter.
Mr. Musk is under pressure as he handles the scrutiny of the fatal Tesla crash and tries to merge his company with SolarCity , where he's also the chairman. After the merger, Tesla has said it plans to tap the debt market or issue shares again before year's end to raise money for the needs of the combined companies and for bringing out Tesla's new Model 3 car.
The $35,000 sedan, slated for next year, is Mr. Musk's bet that he can bring a mass-market electric vehicle to customers, riding a wave of excitement that the more expensive Model S has generated since first going on sale in 2012. Earlier this year, after Tesla began taking reservations for the Model 3, strong demand led the company to say it would hit its sales target of 500,000 annually in 2018, two years earlier than expected.
Mr. Musk's success with building interest in fully electric vehicles has spurred traditional auto makers to push harder into the area as well. General Motors Co. is bringing out a fully electric Chevrolet Bolt later this year.
Ahead of raising cash in the fourth quarter, Musk urged employees to conserve spending and increase sales. "The third quarter will be our last chance to show investors that Tesla can be at least slightly positive cash flow and profitable before the Model 3 reaches full production," Mr. Musk wrote in the memo, which Bloomberg News reported on last month.
The pressure to produce sales apparently got to some within the organization. On Reddit, a social news site, a customer last week detailed aggressive sales techniques, including mentioning a discount sales price, that appeared to stand in contrast of Tesla policy.
Mr. Musk investigated and admonished his employees for offering sales discounts in "a small number of cases" on new vehicles in a memorandum posted Sept. 28 on Twitter. "It is absolutely vital that we adhere to the no negotiation and no discount policy that has been true since we first started taking orders 10 years ago," he wrote. "This is fundamental to our integrity and we maintained this policy even through the terrible depths of the great recession."
He noted that it is fine to discount floor models or those damaged before delivery, but "never--and I mean never" a new car in pristine condition, he wrote. "This is why I always pay full price when I buy a car and the same applies to my family, friends and celebrities, no matter how famous or influential."
Write to Tim Higgins at tim.higgins@wsj.com
Credit: By Tim Higgins
Subject: Automobile sales; Automobile industry; Electric vehicles; Fund raising
Location: California Palo Alto California
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Oct 2, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1825040370
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1825040370?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla's Third-Quarter Sales More Than Double From a Year Ago; Company posts best sales quarter ever while looking to raise more cash to begin producing Model 3
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Oct 2016: n/a.
ProQuest document link
Abstract:
Last week on the social news site Reddit, a customer detailed allegedly aggressive sales techniques by Tesla, including the mention of a discounted sales price, an apparent violation of company policy.
Full text: Tesla Motors Inc. posted its best sales quarter ever as the electric-vehicle maker prepares to raise the added cash it needs to begin production of its Model 3 sedan, which is aimed at the mass market.
Chief Executive Elon Musk wanted a strong third quarter to help build his fund-raising case for the Model 3's production line and for the company's Gigafactory, a massive battery-making facility in Nevada.
On Sunday, Tesla said third-quarter global deliveries of its vehicles more than doubled from a year earlier to 24,500. They included 15,800 Model S sedans and 8,700 Model X sport-utility vehicles. An additional 5,500 cars were in transit to customers and will be counted in fourth-quarter sales, said the company, which is based in Palo Alto, Calif.
The results suggest that Tesla's sales haven't been hurt by the June 30 disclosure of a fatal crash in Florida involving the driver of a Tesla Model S who was using the car's Autopilot feature.
Federal regulators are investigating the crash, which the company said was the first known fatality involving Autopilot, which can take control of a car in certain driving conditions. Tesla has since begun rolling out software updates to the feature, which is regarded as a major step toward a self-driving car. Mr. Musk says the updates to Autopilot would have prevented the crash.
The company said its third-quarter production rose 37% from the second quarter to 25,185 vehicles. It also reiterated its forecast that it would produce 50,000 vehicles in the second half of 2016, and said sales and production during the fourth quarter would be flat to slightly better than in the third quarter. Tesla delivered fewer than 30,000 vehicles during the first six months of the year.
Mr. Musk is under pressure as he handles the scrutiny of the fatal Tesla crash and tries to merge his company with SolarCity , where he is chairman. After the merger, Tesla said it planned to tap the debt market or issue shares before the end of the yearto raise money for the needs of the combined companies and for bringing out Tesla's new Model 3 car.
The $35,000 sedan, slated for next year, is Mr. Musk's bet that he can bring an electric vehicle to mass-market customers, riding the wave of excitement behind the pricier Model S since it went on sale in 2012.
After Tesla began taking reservations for the Model 3 this year, strong demand led it to say it would hit its sales target of 500,000 annually in 2018, two years earlier than expected.
Mr. Musk's success drumming up interest in electric vehicles has spurred traditional auto makers to push harder into that market. General Motors Co. plans to bring out a fully electric Chevrolet Bolt later this year.
Ahead of raising cash in the fourth quarter, Mr. Musk urged employees to limit spending and increase sales. "The third quarter will be our last chance to show investors that Tesla can be at least slightly positive cash flow and profitable before the Model 3 reaches full production," Mr. Musk wrote in a memo that Bloomberg News reported on last month.
The pressure to produce sales apparently got to some within the organization. Last week on the social news site Reddit, a customer detailed allegedly aggressive sales techniques by Tesla, including the mention of a discounted sales price, an apparent violation of company policy.
Mr. Musk investigated the matter and, in a memorandum posted on Twitter last Wednesday admonished his employees for offering discounts on "a small number of cases."
"It is absolutely vital that we adhere to the no-negotiation and no-discount policy that has been true since we first started taking orders 10 years ago," he wrote. "This is fundamental to our integrity and we maintained this policy even through the terrible depths of the great recession."
He said that it is fine to discount floor models or those damaged before delivery, but "never--and I mean never" a new car in pristine condition, he wrote. "This is why I always pay full price when I buy a car and the same applies to my family, friends and celebrities, no matter how famous or influential."
Credit: By Tim Higgins
Subject: Automobile sales; Automobile industry; Electric vehicles
Location: Nevada
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Oct 3, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1825144516
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1825144516?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Tesla's Sales Set Quarterly Record
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Oct 2016: B.3.
ProQuest document link
Abstract:
Last week on the social news site Reddit, a customer detailed allegedly aggressive sales techniques by Tesla, including the mention of a discounted sales price, an apparent violation of company policy.
Full text: Tesla Motors Inc. posted its best sales quarter ever as the electric-vehicle maker prepares to raise the added cash it needs to begin production of its Model 3 sedan, which is aimed at the mass market.
Chief Executive Elon Musk wanted a strong third quarter to help build his fund-raising case for the Model 3's production line and for the company's Gigafactory, a massive battery-making facility in Nevada.
On Sunday, Tesla said third-quarter global deliveries of its vehicles more than doubled from a year earlier to 24,500. They included 15,800 Model S sedans and 8,700 Model X sport-utility vehicles. An additional 5,500 cars were in transit to customers and will be counted in fourth-quarter sales, said the company, which is based in Palo Alto, Calif.
The results suggest that Tesla's sales haven't been hurt by the June 30 disclosure of a fatal crash in Florida involving the driver of a Tesla Model S who was using the car's Autopilot feature.
Federal regulators are investigating the crash, which the company said was the first known fatality involving Autopilot, which can take control of a car in certain driving conditions. Tesla has since begun rolling out software updates to the feature, which is regarded as a major step toward a self-driving car. Mr. Musk says the updates to Autopilot would have prevented the crash.
The company said its third-quarter production rose 37% from the second quarter to 25,185 vehicles. It also reiterated its forecast that it would produce 50,000 vehicles inthe second half of 2016, and said sales and production during the fourth quarter would be flat to slightly better than in the third quarter. Tesla delivered fewer than 30,000 vehicles during the first six months of the year.
Mr. Musk is under pressure as he handles the scrutiny of the fatal Tesla crash and tries to merge his company with SolarCity, where he is chairman. After the merger, Tesla said it planned to tap the debt market or issue shares before the end of the year to raise money for the needs of the combined companies and for bringing out Tesla's new Model 3 car.
The $35,000 sedan, slated for next year, is Mr. Musk's bet that he can bring an electric vehicle to mass-market customers, riding the wave of excitement behind the pricier Model S since it went on sale in 2012.
After Tesla began taking reservations for the Model 3 this year, strong demand led it to say it would hit its sales target of 500,000 annually in 2018, two years earlier than expected.
Mr. Musk's success drumming up interest in electric vehicles has spurred traditional auto makers to push harder into that market. General Motors Co. plans to bring out a fully electric Chevrolet Bolt later this year.
Ahead of raising cash in the fourth quarter, Mr. Musk urged employees to limit spending and increase sales. "The third quarter will be our last chance to show investors that Tesla can be at least slightly positive cash flow and profitable before the Model 3 reaches full production," Mr. Musk wrote in a memo that Bloomberg News reported on last month.
The pressure to produce sales apparently got to some within the organization. Last week on the social news site Reddit, a customer detailed allegedly aggressive sales techniques by Tesla, including the mention of a discounted sales price, an apparent violation of company policy.
Mr. Musk investigated the matter and, in a memorandum posted on Twitter last Wednesday, admonished his employees for offering discounts on "a small number of cases."
Credit: By Tim Higgins
Subject: Automobile sales; Electric vehicles
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Oct 3, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1825185528
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1825185528?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Seeks Permission to Double Size of California Car Plant; Zoning proposal in Fremont, Calif., comes as auto maker prepares for arrival of Tesla Model 3 next year
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Oct 2016: n/a.
ProQuest document link
Abstract:
Tesla's long-term product strategy includes an electric pickup truck, small sport-utility vehicle and large commercial vehicles.
Full text: Tesla Motors Inc.'s California factory could nearly double in size and the facility's production rise to 500,000 vehicles annually, according to a long-term zoning proposal released by the local government.
Tesla's proposal to allow expansion of the facility in Fremont, Calif., which dates to the 1960s, is a step in the company's effort to prepare for dramatic growth. Chief Executive Elon Musk aims to churn out a million cars a year by the end of 2020. He built about 50,000 vehicles last year at the Fremont plant.
The expected arrival of Tesla's Model 3 sedan next year could extend the Palo Alto, Calif., auto maker's reach beyond the market for high-end electric cars. The $35,000 car is part of Mr. Musk's strategy to attract the masses. Strong early demand for the Model 3 led the company to move its goal of making 500,000 vehicles a year to 2018 from 2020.
"Tesla is going to be hellbent on becoming the best manufacturer on earth," Mr. Musk said in May, when he announced the new target.
Tesla's long-term product strategy includes an electric pickup truck, small sport-utility vehicle and large commercial vehicles. The company has said it will need to raise additional cash to help bring production of the Model 3 online, even as it is trying to complete a merger with SolarCity Corp., a solar-energy company where Mr. Musk is also chairman and the largest shareholder.
"We are pleased to work with the City of Fremont on a plan that reaffirms our commitment to California and to eventually maximize the potential of our Fremont factory site," Tesla said in a statement. "California continues to be the epicenter of Tesla's manufacturing capabilities and we are proud to be the state's largest manufacturing employer."
Tesla itself hasn't announced a plan to expand the Fremont plant or a timeline for doing so. The proposal to the city, however, suggests that Tesla is moving to boost production capacity.
In May, Mr. Musk said production at the Fremont plant could increase to one million vehicles a year. "Whether that's actually wise is a separate question," he told analysts at the time. "For our future product lineup, we're going to need more than one plant in North America just to satisfy North America demand."
He has also said that building cars in Fremont alone wouldn't be efficient as the company expands globally, and he suggested he would consider opening factories in Europe and China.
The Fremont facility held a special place in automotive history before coming under Tesla's ownership. It was built by General Motors Co., its first vehicle rolling off the assembly line in the 1960s. By the 1980s, however, GM was struggling to compete with Asian imports and partnered with Toyota Motor Corp. to run the factory as a joint-venture called New United Motor Manufacturing Inc., or NUMMI. The goal was twofold: GM wanted to learn Toyota's way of production while Toyota wanted experience building in the U.S. The plant closed with GM's bankruptcy in 2009 and Toyota's decision to stop production there the following year. Tesla acquired it a few months later.
Under Tesla's zoning proposal, which would guide development of the property for the next decade or more, the complex's size could increase by about 4.6 million square feet, from 4.5 million square feet, the city said. The expansion could increase production to 500,000 vehicles a year from 50,580 last year and increase the number of employees to 9,315 from 6,210, according to city records.
Tesla has purchased an additional 25 acres next to the property, according to the company.
The Fremont Planning Commission is expected to review the plan on Thursday. The city's staff has recommended that the city council ultimately approve it. The San Francisco Chronicle reported the proposal's details on Friday.
Credit: By Tim Higgins
Subject: Manufacturing; Automobile industry; Factories; Production capacity; Vehicles
Location: California Palo Alto California
Company / organization: Name: New United Motor Manufacturing Inc; NAICS: 336111; Name: SolarCity Corp; NAICS: 238220, 333414, 221114; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Oct 8, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1826961650
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1826961650?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Musk Says Tesla Doesn't Need to Tap Equity, Debt Markets This Quarter; Broader effort under way to make case for merging auto maker, SolarCity ahead of shareholder votes
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Oct 2016: n/a.
ProQuest document link
Abstract:
Tesla's long-term product strategy includes an electric pickup truck, small sport-utility vehicle and large commercial vehicles. By the 1980s, however, GM was struggling to compete with Asian imports and partnered with Toyota Motor Corp. to run the factory as a joint venture called New United Motor Manufacturing Inc., or NUMMI.
Full text: Elon Musk posted a message on Sunday to Twitter saying Tesla Motors Inc. and SolarCity Corp., both of which he leads, had no need to tap the equity or debt markets.
Two days earlier, Tesla had said it would raise money before the end of the year.
Tesla is ramping up to manufacture its Model 3 sedan at substantial potential expense. The city of Fremont, Calif., where Tesla maintains a manufacturing plant, last week released a proposal to adjust zoning for the facility, allowing it to double in size and boost its production capacity by an order of magnitude.
At the same time, the car maker has initiated a merger with SolarCity, another move likely to consume substantial quantities of cash. SolarCity in August reported widening quarterly losses and sharply rising operating expenses.
Mr. Musk, who is chairman of both companies, said on Twitter he wanted "to correct expectations" about the companies' need to raise money. He said Tesla, where he is chief executive, would reveal a new product on Oct. 17 and reiterated a Tesla-SolarCity product would be shown on Oct. 28.
Both announcements fit into Mr. Musk's broader effort to make the case for merging Tesla and SolarCity ahead of shareholder votes on the proposal.
Tesla on Friday had updated its filings for the merger with the U.S. Securities and Exchange Commission, restating its plan to seek additional cash by the end of the year.
"While Tesla expects that its current sources of liquidity...will provide it with adequate liquidity based on its current plans through at least the end of the current fiscal year, Tesla is currently planning to raise additional funds by the end of this year, including through potential equity or debt offerings," the auto maker said in the filing.
Mr. Musk wrote in a tweet that he aimed "to correct expectations that Tesla/SolarCity will need to raise equity or corp debt in Q4. Won't be necessary for either." In another tweet, he added that the companies "probably" wouldn't need to do so in the first quarter of 2017 either.
Tesla declined a request for further comment.
The move to merge Tesla and SolarCity comes as Mr. Musk is preparing to transform Tesla for the mass market after establishing the company as a maker of high-end electric cars for wealthy customers. Tesla's long-term product strategy includes an electric pickup truck, small sport-utility vehicle and large commercial vehicles.
The expected arrival of Tesla's $35,000 Model 3 sedan next year could be a turning point. Strong early demand for the Model 3 led the company to move its goal of making 500,000 vehicles a year to 2018 from 2020.
Mr. Musk aims to churn out a million cars a year by the end of 2020. "Tesla is going to be hellbent on becoming the best manufacturer on earth," Mr. Musk said in May, when he announced the new target.
He built about 50,000 vehicles last year at Tesla's Fremont factory. That factory could nearly double in size and the facility's production rise to 500,000 vehicles annually, according to a long-term zoning proposal released by the local government last week.
"We are pleased to work with the City of Fremont on a plan that reaffirms our commitment to California and to eventually maximize the potential of our Fremont factory site," Tesla said in a statement. "California continues to be the epicenter of Tesla's manufacturing capabilities and we are proud to be the state's largest manufacturing employer."
Tesla hasn't announced a plan or timeline for expanding the Fremont plant. The proposal to the city, however, suggests Tesla is moving to boost production capacity.
In May, Mr. Musk said production at the Fremont plant could increase to one million vehicles a year. "Whether that's actually wise is a separate question," he told analysts at the time. "For our future product lineup, we're going to need more than one plant in North America just to satisfy North America demand."
He has also said building cars in Fremont alone wouldn't be efficient as the company expands globally, and suggested he would consider opening factories in Europe and China.
The Fremont facility held a special place in automotive history before coming under Tesla's ownership. It was built by then-General Motors Corp., its first vehicle rolling off the assembly line in the 1960s. By the 1980s, however, GM was struggling to compete with Asian imports and partnered with Toyota Motor Corp. to run the factory as a joint venture called New United Motor Manufacturing Inc., or NUMMI. The goal was twofold: GM wanted to learn Toyota's way of production while Toyota wanted experience building in the U.S. The plant closed with GM's bankruptcy in 2009 and Toyota's decision to stop production there the following year. Tesla acquired it a few months later.
Under Tesla's zoning proposal, which would guide development of the property for the next decade or more, the complex's size could increase by about 4.6 million square feet, from 4.5 million square feet, the city said. The expansion could increase production to 500,000 vehicles a year from 50,580 last year and increase the number of employees to 9,315 from 6,210, according to city records.
Tesla has purchased an additional 25 acres next to the property, according to the company.
The Fremont Planning Commission is expected to review the plan on Thursday. The city's staff has recommended that the city council ultimately approve it. The San Francisco Chronicle reported the proposal's details on Friday.
Write to Tim Higgins at tim.higgins@wsj.com
Related Coverage
* Tesla Seeks Permission to Double Size of California Car Plant (Oct. 8)
* Tesla's Best Quarterly Sales: By the Numbers (Oct. 3)
* Elon Musk Unveils Plans for New Tesla Vehicle Types (July 21)
Credit: By Tim Higgins
Subject: Manufacturing; Automobile industry; Factories; Production capacity; Vehicles; Social networks; Equity
Location: California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Oct 9, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1827177713
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1827177713?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Musk Says Tesla Won't Tap Equity
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 Oct 2016: B.3.
ProQuest document link
Abstract:
Tesla's long-term product strategy includes an electric pickup truck, small sport-utility vehicle and large commercial vehicles.
Full text: Elon Musk posted a message on Sunday to Twitter saying Tesla Motors Inc. and SolarCity Corp., both of which he leads, had no need to tap the equity or debt markets.
Two days earlier, Tesla had said it would raise money before the end of the year.
Tesla is ramping up to manufacture its Model 3 sedan at substantial potential expense. The city of Fremont, Calif., where Tesla maintains a manufacturing plant, last week released a proposal to adjust zoning for the facility, allowing it to double in size and boost its production capacity to 500,000 vehicles annually.
At the same time, the car maker has initiated a merger with SolarCity, another move likely to consume substantial quantities of cash. SolarCity in August reported widening quarterly losses and sharply rising operating expenses.
Mr. Musk, who is chairman of both companies, said on Twitter he wants "to correct expectations" about the companies' need to raise money. He said Tesla, where he is chief executive, would reveal a new product on Oct. 17 and reiterated a Tesla-SolarCity product would be shown on Oct. 28. Both announcements fit into Mr. Musk's broader effort to make the case for merging Tesla and SolarCity ahead of shareholder votes on the proposal.
Tesla on Friday had updated its filings for the merger with the U.S. Securities and Exchange Commission, restating its plan to seek additional cash by the end of the year.
"While Tesla expects that its current sources of liquidity. . .will provide it with adequate liquidity based on its current plans through at least the end of the current fiscal year, Tesla is currently planning to raise additional funds by the end of this year, including through potential equity or debt offerings," the auto maker said in the filing.
Mr. Musk wrote in a tweet that he aimed "to correct expectations that Tesla/SolarCity will need to raise equity or corp debt in Q4. Won't be necessary for either." In another tweet, he said the companies "probably" wouldn't need to do so in the first quarter of 2017 either. Tesla declined a request for further comment.
The move to merge Tesla and SolarCity comes as Mr. Musk is preparing to transform Tesla for the mass market after establishing the company as a maker of high-end electric cars for wealthy customers. Tesla's long-term product strategy includes an electric pickup truck, small sport-utility vehicle and large commercial vehicles.
The expected arrival of Tesla's $35,000 Model 3 sedan next year could be a turning point. Strong early demand for the it led the company to move its goal of making 500,000 vehicles a year to 2018 from 2020. Mr. Musk aims to churn out a million cars a year by the end of 2020.
Credit: By Tim Higgins
Subject: Equity financing; Automobile industry
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: SolarCity Corp; NAICS: 221114, 238220, 333414
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Oct 10, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1827227741
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1827227741?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Musk Says Tesla Doesn't Need to Tap Equity, Debt Markets This Quarter; Broader effort under way to make case for merging auto maker, SolarCity ahead of shareholder votes
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Oct 2016: n/a.
ProQuest document link
Abstract:
Tesla's long-term product strategy includes an electric pickup truck, small sport-utility vehicle and large commercial vehicles. By the 1980s, however, GM was struggling to compete with Asian imports and partnered with Toyota Motor Corp. to run the factory as a joint venture called New United Motor Manufacturing Inc., or NUMMI.
Full text: Elon Musk posted a message on Sunday to Twitter saying Tesla Motors Inc. and SolarCity Corp., both of which he leads, had no need to tap the equity or debt markets.
Two days earlier, Tesla had said it would raise money before the end of the year.
Tesla is ramping up to manufacture its Model 3 sedan at substantial potential expense. The city of Fremont, Calif., where Tesla maintains a manufacturing plant, last week released a proposal to adjust zoning for the facility, allowing it to double in size and boost its production capacity by an order of magnitude.
At the same time, the car maker has initiated a merger with SolarCity, another move likely to consume substantial quantities of cash. SolarCity in August reported widening quarterly losses and sharply rising operating expenses.
Mr. Musk, who is chairman of both companies, said on Twitter he wanted "to correct expectations" about the companies' need to raise money. He said Tesla, where he is chief executive, would reveal a new product on Oct. 17 and reiterated a Tesla-SolarCity product would be shown on Oct. 28.
Both announcements fit into Mr. Musk's broader effort to make the case for merging Tesla and SolarCity ahead of shareholder votes on the proposal.
Tesla on Friday had updated its filings for the merger with the U.S. Securities and Exchange Commission, restating its plan to seek additional cash by the end of the year.
"While Tesla expects that its current sources of liquidity...will provide it with adequate liquidity based on its current plans through at least the end of the current fiscal year, Tesla is currently planning to raise additional funds by the end of this year, including through potential equity or debt offerings," the auto maker said in the filing.
Mr. Musk wrote in a tweet that he aimed "to correct expectations that Tesla/SolarCity will need to raise equity or corp debt in Q4. Won't be necessary for either." In another tweet, he added that the companies "probably" wouldn't need to do so in the first quarter of 2017 either.
Tesla declined a request for further comment.
The move to merge Tesla and SolarCity comes as Mr. Musk is preparing to transform Tesla for the mass market after establishing the company as a maker of high-end electric cars for wealthy customers. Tesla's long-term product strategy includes an electric pickup truck, small sport-utility vehicle and large commercial vehicles.
The expected arrival of Tesla's $35,000 Model 3 sedan next year could be a turning point. Strong early demand for the Model 3 led the company to move its goal of making 500,000 vehicles a year to 2018 from 2020.
Mr. Musk aims to churn out a million cars a year by the end of 2020. "Tesla is going to be hellbent on becoming the best manufacturer on earth," Mr. Musk said in May, when he announced the new target.
He built about 50,000 vehicles last year at Tesla's Fremont factory. That factory could nearly double in size and the facility's production rise to 500,000 vehicles annually, according to a long-term zoning proposal released by the local government last week.
"We are pleased to work with the City of Fremont on a plan that reaffirms our commitment to California and to eventually maximize the potential of our Fremont factory site," Tesla said in a statement. "California continues to be the epicenter of Tesla's manufacturing capabilities and we are proud to be the state's largest manufacturing employer."
Tesla hasn't announced a plan or timeline for expanding the Fremont plant. The proposal to the city, however, suggests Tesla is moving to boost production capacity.
In May, Mr. Musk said production at the Fremont plant could increase to one million vehicles a year. "Whether that's actually wise is a separate question," he told analysts at the time. "For our future product lineup, we're going to need more than one plant in North America just to satisfy North America demand."
He has also said building cars in Fremont alone wouldn't be efficient as the company expands globally, and suggested he would consider opening factories in Europe and China.
The Fremont facility held a special place in automotive history before coming under Tesla's ownership. It was built by then-General Motors Corp., its first vehicle rolling off the assembly line in the 1960s. By the 1980s, however, GM was struggling to compete with Asian imports and partnered with Toyota Motor Corp. to run the factory as a joint venture called New United Motor Manufacturing Inc., or NUMMI. The goal was twofold: GM wanted to learn Toyota's way of production while Toyota wanted experience building in the U.S. The plant closed with GM's bankruptcy in 2009 and Toyota's decision to stop production there the following year. Tesla acquired it a few months later.
Under Tesla's zoning proposal, which would guide development of the property for the next decade or more, the complex's size could increase by about 4.6 million square feet, from 4.5 million square feet, the city said. The expansion could increase production to 500,000 vehicles a year from 50,580 last year and increase the number of employees to 9,315 from 6,210, according to city records.
Tesla has purchased an additional 25 acres next to the property, according to the company.
The Fremont Planning Commission is expected to review the plan on Thursday. The city's staff has recommended that the city council ultimately approve it. The San Francisco Chronicle reported the proposal's details on Friday.
Write to Tim Higgins at tim.higgins@wsj.com
Related Coverage
* Tesla Seeks Permission to Double Size of California Car Plant (Oct. 8)
* Tesla's Best Quarterly Sales: By the Numbers (Oct. 3)
* Elon Musk Unveils Plans for New Tesla Vehicle Types (July 21)
Credit: By Tim Higgins
Subject: Manufacturing; Automobile industry; Factories; Production capacity; Vehicles; Social networks; Equity
Location: California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Oct 10, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1827435191
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1827435191?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla to Partner with Panasonic to Make Solar Panels at Buffalo Factory; Facility originally intended to be a SolarCity manufacturing plant
Author: Sweet, Cassandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Oct 2016: n/a.
ProQuest document link
Abstract:
Tesla's management team said in a blog post Sunday night that the company has entered into a nonbinding agreement with Panasonic to "begin collaborating on the manufacturing and production of photovoltaic cells and modules in Buffalo, New York."
Full text: Tesla Motors Inc. plans to join with Panasonic Corp. to make solar panels at a factory in Buffalo, N.Y., that originally was to be a SolarCity Corp. manufacturing plant.
Tesla's management team said in a blog post Sunday night that the company has entered into a nonbinding agreement with Panasonic to "begin collaborating on the manufacturing and production of photovoltaic cells and modules in Buffalo, New York."
Tesla said it plans to sell electric batteries, along with Panasonic's panels, to residential, commercial and utility customers. SolarCity will sell, finance and install the panels.
The agreement is contingent on approval of Tesla's proposed acquisition of SolarCity in an all-stock deal currently worth about $2.2 billion. Shareholders of the companies, both chaired by entrepreneur Elon Musk, are scheduled to vote on the merger Nov. 17.
Panasonic is a partner at Tesla's Gigafactory battery plant near Reno, Nev. SolarCity has said it plans to make a new product--a roof that generates solar power--at the Buffalo factory. Mr. Musk earlier this month said that both Tesla and SolarCity are involved in the new product, which is set to be unveiled on Oct. 28.
"We are excited to expand our partnership with Panasonic as we move toward a combined Tesla and SolarCity," said Tesla Chief Technical Officer J.B. Straubel in the blog post. He declined further comment through a spokeswoman.
Shuuji Okayama, vice president, Eco Solutions Company of Panasonic, added, "We expect that the collaboration talks will lead to growth of the Tesla and Panasonic relationship."
Tesla shares slipped 1.3% to $193.96 while SolarCity lost 1.8% to $19.65, both in 4 p.m. trading on Monday.
Cash-strapped SolarCity faces a series of financial commitments as part of its deal with New York for the Buffalo factory, which is being partially financed by state taxpayers, who are set to cover $750 million in construction and equipment costs.
Among other requirements, SolarCity is supposed to spend $130 million the year after the factory is completed and the manufacturing equipment has been delivered, according to a 2014 agreement between the company and state representatives.
The company promised to create 500 factory jobs and 960 additional jobs in Buffalo, and 2,000 other jobs in the state within five years of the factory's opening.
In response to questions, SolarCity recently said it was committed to the factory project but declined to disclose how it planned to fund it.
The factory is part of a New York economic revitalization project known as the Buffalo Billion that is now the subject of a federal corruption case. SolarCity, a tenant in the factory building, hasn't been named in the probe.
Construction of the building is set to be completed next month, and the plant is expected to start churning out products by the end of June, according to Empire State Development, the state agency overseeing the project.
New York Gov. Andrew Cuomo praised Tesla's plans Monday, saying: "Tesla's partnership with Panasonic will bring world-class manufacturing expertise to the table, strengthen the company's competitiveness and position the entire region for future economic revitalization."
SolarCity has more than $3 billion in debt and hasn't turned a profit since it went public in 2012. The company spent $438 million this year through June, 42% more than its revenue of $308 million. It had $146 million of cash on June 30, from $421 million a year earlier.
Low on cash, the company has raised $405 million in the last few months to help shore up its finances, including selling $100 million in bonds to Mr. Musk , SolarCity Chief Executive Lyndon Rive, and his brother Peter Rive, the company's chief technology officer. Mr. Musk and the Rive brothers are cousins.
While SolarCity is the largest installer of home solar panels in the U.S., it doesn't currently make the panels it sells. Its move into manufacturing comes at a time when existing makers are struggling due to a global glut of solar panels.
Wholesale panel prices have fallen by about 15% this year, to about 61 cents a watt, on average, said Paula Mints, chief analyst at SPV Market Research in San Jose, Calif., adding that some panels made in China are going for as low as 40 cents a watt.
"As we go down this long road to unprofitability, entering this market is insane," Ms. Mints said.
Kady Cooper, a SolarCity spokeswoman, said the company "can produce high-efficiency panels with superior aesthetics at costs similar to commodity panels."
"Our products require customization that can only be scaled if we control the manufacturing," she added.
Colin Rusch, an analyst at Oppenheimer & Co., questioned the wisdom of Tesla's decision to expand further into the solar industry, but said that adding Panasonic seemed to make sense.
A partnership with Panasonic "could materially mitigate the capital needs for SolarCity," he said. He opposes Tesla's proposed SolarCity deal, saying that it isn't "the best and highest use of capital for Tesla shareholders."
SolarCity said Monday that it has created a $300 million fund with Credit Suisse Group to finance home solar-panel installations. The company announced a similar type of fund last month with Citigroup Inc. for $347 million.
Write to Cassandra Sweet at cassandra.sweet@wsj.com
Related
* Musk Says Tesla Doesn't Need to Tap Equity, Debt Markets This Quarter (Oct. 10)
* Tesla's Merger With SolarCity May Be Delayed by Lawsuits (Sept. 19)
* SolarCity Bond Offering Financed Primarily by Musk (Aug. 23)
* Tesla and SolarCity Agree to Billion Deal (Aug. 1)
Credit: By Cassandra Sweet
Subject: Photovoltaic cells; Manufacturing; Agreements
Location: New York
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Oct 17, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1829473007
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1829473007?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
WSJ.D Technology: Panasonic Joins Tesla For U.S. Solar Plant
Author: Sweet, Cassandra
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 Oct 2016: B.4.
ProQuest document link
Abstract:
Tesla's management team said in a blog post Sunday night that the company has entered into a nonbinding agreement with Panasonic to "begin collaborating on the manufacturing and production of photovoltaic cells and modules in Buffalo, New York."
Full text: Tesla Motors Inc. plans to join with Panasonic Corp. to make solar panels at a factory in Buffalo, N.Y., that originally was to be a SolarCity Corp. manufacturing plant.
Tesla's management team said in a blog post Sunday night that the company has entered into a nonbinding agreement with Panasonic to "begin collaborating on the manufacturing and production of photovoltaic cells and modules in Buffalo, New York."
Tesla said it plans to sell electric batteries, along with Panasonic's panels, to residential, commercial and utility customers. SolarCity will sell, finance and install the panels.
The agreement is contingent on approval of Tesla's proposed acquisition of SolarCity in an all-stock deal currently worth about $2.2 billion. Shareholders of the companies, both chaired by entrepreneur Elon Musk, are scheduled to vote on the merger Nov. 17.
"We are excited to expand our partnership with Panasonic as we move towards a combined Tesla and SolarCity," said Tesla Chief Technical Officer J.B. Straubel in the blog post.
Shuuji Okayama, vice president, Eco Solutions Company of Panasonic, added, "We expect that the collaboration talks will lead to growth of the Tesla and Panasonic relationship."
Tesla shares slipped 1.3% to $193.96 while SolarCity lost 1.8% to $19.65, both in 4 p.m. trading on Monday.
Cash-strapped SolarCity faces a series of financial commitments as part of its deal with New York for the Buffalo factory, which is being partially financed by state taxpayers, who are set to cover $750 million in construction and equipment costs.
In response to questions, SolarCity recently said it was committed to the factory project but declined to disclose how it planned to fund it.
On Monday, it said it created a $300 million fund with Credit Suisse Group to finance home solar-panel installations.
The company also has raised $405 million in the last few months to help shore up its finances, including selling $100 million in bonds to Mr. Musk, SolarCity Chief Executive Lyndon Rive, and his brother Peter Rive, the company's chief technology officer. Mr. Musk and the Rive brothers are cousins.
While SolarCity is the largest installer of home solar panels in the U.S., it doesn't currently make the panels it sells. Its move into manufacturing comes at a time when existing makers are struggling due to a global glut of solar panels.
Wholesale panel prices have fallen by about 15% this year, to about 61 cents a watt, on average, said Paula Mints, chief analyst at SPV Market Research in San Jose, Calif., adding that some panels made in China are going for as low as 40 cents a watt.
"As we go down this long road to unprofitability, entering this market is insane," Ms. Mints said.
Kady Cooper, a SolarCity spokeswoman, said the company "can produce high-efficiency panels with superior aesthetics at costs similar to commodity panels."
Credit: By Cassandra Sweet
Subject: Manufacturing; Joint ventures; Solar energy
Location: Buffalo New York
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: Panasonic Corp; NAICS: 333415, 335222, 335224
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2016
Publication date: Oct 18, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1829725950
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1829725950?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Extends Delivery Date of Model 3 for New Reservations; Car maker's updated schedule suggests strong interest in the sedan
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Oct 2016: n/a.
ProQuest document link
Abstract:
Early demand for the car led Chief Executive Officer Elon Musk in May to move up his goal of manufacturing 500,000 vehicles a year to 2018 from 2020.
Full text: The wait for Tesla Motors Inc.'s upcoming Model 3 sedan just got longer for some buyers. New reservations for the vehicle won't be filled until mid-2018 or later, according to the company's website.
Prospective customers who already had reserved a Model 3 could expect delivery in late 2017, as Tesla previously had promised, a company spokeswoman said Tuesday. Tesla has said that 373,000 Model 3s were reserved.
Tesla this week posted the later delivery schedule for new reservations on its website, which suggests continuing strong interest in the Model 3. Last week, the company's website said that delivery of the $35,000 sedan would begin in late 2017, according to a tesla.com, a nonprofit that archives webpages.
"Today's website update doesn't reflect any change in our plans," Tesla said in a statement. "We still plan to begin Model 3 deliveries in late 2017, and we adjusted the date on our marketing page to reflect more accurate timing for new/future reservation holders."
Early demand for the car led Chief Executive Officer Elon Musk in May to move up his goal of manufacturing 500,000 vehicles a year to 2018 from 2020.
Tesla's factory in Fremont, Calif., made about 50,000 vehicles last year. The company is working on plans to double the facility's space, allowing for increased production.
Write to Tim Higgins at tim.higgins@wsj.com
Credit: By Tim Higgins
Subject: Appointments & personnel changes; Executives; Vehicles; Web sites
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Oct 18, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1829857520
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1829857520?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Expects to Demonstrate Self-Driven Cross-Country Trip Next Year; Auto maker begins equipping all its vehicles with hardware to make them fully self-driving
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Oct 2016: n/a.
ProQuest document link
Abstract:
Germany's Transportation Ministry has asked Tesla not to use the term Autopilot in ads describing the system and the California Department of Motor Vehicles has issued draft rules that would prohibit the use of "auto pilot" in marketing materials for systems similar to Tesla's.
Full text: Corrections & Amplifications:
Tesla expects to demonstrate a vehicle traveling in fully autonomous mode across the country by the end of next year. The headline on an earlier version of this story incorrectly said it would be by year-end. (Oct. 19, 2016)
Tesla Motors Inc., preparing for a future of self-driving cars, has begun equipping all its new vehicles with the hardware required to make them entirely capable of driving themselves.
Chief Executive Officer Elon Musk announced the changes on Wednesday, saying his goal is to demonstrate a vehicle traveling in fully autonomous mode from Los Angeles to New York by the end of next year. Autonomous features will be introduced over time based on what he dubbed "Hardware 2," he said.
Tesla cars already come with a semi-autonomous system called Autopilot. But having a fully autonomous car on the road by 2018 would put the Palo Alto, Calif., auto maker ahead of major car companies racing to develop their own self-driving models. Companies from Ford Motor Co. to BMW AG have proposed fully autonomous vehicles in 2021. Alphabet Inc.'s Google has a fully autonomous test fleet on public roadways, but the company hasn't detailed its plan for the technology it has been working on for more than seven years.
The software that would make Tesla vehicles fully self-driving still needs to be validated, and the system hasn't been approved by regulators. The company expects to reach those milestones in time, ultimately leading to vehicles that Mr. Musk said would be significantly less dangerous than current cars.
"It will take us some time into the future to complete validation of the software and to get the required regulatory approval, but the important thing is that the foundation is laid for the cars to be fully autonomous at a safety level we believe to be at least twice that of a person, maybe better," Mr. Musk told reporters on Wednesday.
Tesla used a similar strategy to introduce the semi-autonomous Autopilot feature, rolling out the hardware before the software was complete. Vehicles built after October 2014 came equipped with the parts that Autopilot would eventually use, such as radar. Tesla turned on the feature in late 2015 using the company's ability to update its vehicles' software over the air.
High-end Model S and Model X vehicles equipped with hardware for full autonomy are already in production, and the Model 3, the company's mid-priced sedan slated for delivery late next year, will have it as well, Mr. Musk said. Previously built vehicles without the new hardware won't have the fully autonomous features.
The new hardware will initially lack some capabilities of Autopilot, including automatic emergency braking, collision warning, lane holding and active cruise control. Those and other features will be enabled as the company works to calibrate the new system, the company said.
That should take two or three months, Mr. Musk said. Thereafter, he said, the company plans to upgrade its autonomous capabilities every two or three months.
"It's extremely impressive where they've gone, but if the technology can't be used it seems like a moot point for most people," said Jessica Caldwell, an industry analyst with Edmunds.com, a website that tracks new cars. "It's hard to get excited about something you can't do, and you can't really utilize this."
Tesla's effort to introduce the next generation of autonomous driving capability comes as the auto maker faces increasing scrutiny over the semi-autonomous Autopilot system. The current version uses cameras, sensors and radar to control vehicle speed and steering under certain driving conditions. While not a fully self-driving system, it is regarded as a major step toward that end.
However, some observers worry that the technology lulls drivers into complacency behind the wheel. Germany's Transportation Ministry has asked Tesla not to use the term Autopilot in ads describing the system and the California Department of Motor Vehicles has issued draft rules that would prohibit the use of "auto pilot" in marketing materials for systems similar to Tesla's.
U.S. regulators are investigating a fatal crash that occurred in May in Florida, which Tesla has said was the first known fatality involving Autopilot. An update to Autopilot's software last month may have prevented that crash, Mr. Musk has said. The changes included making the system more reliant on radar to navigate.
Mr. Musk expressed his frustration with the large amount of attention received by Autopliot crashes relative to automobile crashes in general. "It does not reflect well upon the media," he said. He noted that a negative story dissuading people from using autonomous vehicles was effectively "killing people" since the technology made driving safer.
The new system has eight cameras, compared to one in previous Tesla vehicles, providing 360 degrees of visibility up to 250 meters in range, while the on-board computer has more than 40 times the computing power of the previous generation, according to Tesla. The software is being developed in-house, Mr. Musk said.
Customers will be offered two options when buying a Tesla vehicle, Mr. Musk said: Fully autonomous mode and an enhanced Autopilot mode that has improved cameras and computing power to perform more complex maneuvers, such as navigating freeway on- and off-ramps.
Credit: By Tim Higgins
Subject: Fatalities; Vehicles; Regulatory approval
Company / organization: Name: Google Inc; NAICS: 519130; Name: Alphabet Inc; NAICS: 551114; Name: Department of Motor Vehicles-California; NAICS: 926120; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Oct 20, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1830204589
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1830204589?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Tesla Adds Driverless Hardware To Cars
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Oct 2016: B.3.
ProQuest document link
Abstract:
Companies from Ford Motor Co. to BMW AG have proposed fully autonomous vehicles in 2021.
Full text: Tesla Motors Inc., preparing for a future of self-driving cars, has begun equipping all its new vehicles with the hardware required to make them entirely capable of driving themselves.
Chief Executive Officer Elon Musk announced the changes on Wednesday, saying his goal is to demonstrate a vehicle traveling in fully autonomous mode from Los Angeles to New York by the end of next year.
Autonomous features will be introduced over time based on what he dubbed "Hardware 2," he said.
Tesla cars already come with a semi-autonomous system called Autopilot. But having a fully autonomous car on the road by 2018 would put the Palo Alto, Calif., auto maker ahead of major car companies racing to develop their own self-driving models. Companies from Ford Motor Co. to BMW AG have proposed fully autonomous vehicles in 2021.
The software that would make Tesla vehicles fully self-driving still needs to be validated, and the system hasn't been approved by regulators. The company expects to reach those milestones in time, ultimately leading to vehicles that Mr. Musk said would be significantly less dangerous than current cars.
"It will take us some time into the future to complete validation of the software and to get the required regulatory approval, but the important thing is that the foundation is laid for the cars to be fully autonomous at a safety level we believe to be at least twice that of a person, maybe better," Mr. Musk told reporters on Wednesday.
Credit: By Tim Higgins
Subject: Autonomous vehicles
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Oct 20, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1830267968
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1830267968?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Sets Price for Self-Driving Feature, Lays Groundwork for Ride-Hailing Service; Tesla sets retail price of $8,000 for self-driving feature
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Oct 2016: n/a.
ProQuest document link
Abstract:
"Since most cars are only in use by their owner for 5% to 10% of the day, the fundamental economic utility of a true self-driving car is likely to be several times that of a car which is not," Mr. Musk wrote in July.
Full text: Tesla Motors Inc. set its retail price for the option that would allow a car to drive fully autonomously at $8,000, and hinted that those who paid it would be able to offset the cost through a ride-hailing network that would compete with Uber Technologies Inc. and Lyft Inc.
The price and mention of the ride-hailing Tesla Network appeared on the company's website on Wednesday shortly after an announcement that, effective immediately, all new Tesla vehicles will include the hardware necessary to drive themselves. The $8,000 price covers the software to enable that hardware, an option called Full Self-Driving Capability, which will cost $10,000 if purchased separately from the vehicle.
The autonomous-driving software needs to be validated, and regulators must approve it.
The price for autonomous driving for the first time sets a benchmark for car manufacturers that aim to market self-driving cars including Alphabet Inc.'s Google, BMW AG, and Ford Motor Co.
"This is the first time somebody has put a price--a consumer price--toward what that feature set might cost," Stephanie Brinley, an industry analyst with IHS Markit, said. "It sets a level of expectations....It draws a line in the sand."
The website's description of Full Self-Driving Capability included the first concrete sign that Tesla is considering a ride-sharing business. The description included a terse statement that "using a self-driving Tesla for car sharing or ride hailing for friends and family is fine, but doing so for revenue purposes will only be permissible on the Tesla Network, details of which will be released next year."
Mr. Musk in July laid out his vision of self-driving cars forming the basis of a ride-hailing network as part of the company's long-term plan in July. He envisioned a world in which Tesla owners could put their vehicles to work generating income.
"Since most cars are only in use by their owner for 5% to 10% of the day, the fundamental economic utility of a true self-driving car is likely to be several times that of a car which is not," Mr. Musk wrote in July.
Several companies are racing to develop fully self-driving cars including Alphabet Inc.'s Google, BMW AG, and Ford Motor Co. General Motors Co. and Uber, in particular, are betting that ride-hailing services will be the first commercial use of autonomous vehicles. Uber is testing self-driving taxis in Pittsburgh, Penn., and GM has partnered with Uber-competitor Lyft with plans to test self-driving Chevrolet Bolt electric cars.
Write to Tim Higgins at Tim.Higgins@wsj.com
Credit: By Tim Higgins
Subject: Automobile industry; Vehicles; Ride sharing services
Company / organization: Name: Alphabet Inc; NAICS: 551114; Name: Google Inc; NAICS: 519130; Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Lyft Inc; NAICS: 518210; Name: Uber Technologies Inc; NAICS: 511210, 518210; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Oct 20, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1830452866
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1830452866?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Sets Price for Self-Driving Feature, Lays Groundwork for Ride-Hailing Service; Tesla sets retail price of $8,000 for self-driving feature
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Oct 2016: n/a.
ProQuest document link
Abstract:
Tesla's price for autonomous driving activation sets a benchmark for car manufacturers that aim to market self-driving cars including BMW AG, Ford Motor Co. and General Motors Co. Alphabet Inc.'s Google and Uber are also testing self-driving cars on public roads.
Full text: Tesla Motors Inc. said it plans to charge buyers of its newest cars $8,000 to activate autonomous-driving technology, hinting those who do would be able to offset the cost through a ride-hailing network similar to Uber Technologies Inc. and Lyft Inc.
The $8,000 price covers the software to enable a new hardware option, called Full Self-Driving Capability, which will cost $10,000 if purchased separately from the vehicle.
The autonomous-driving software still needs to be validated, and regulators must approve it, the company said.
Several companies are racing to develop fully self-driving cars, and some are betting that ride-hailing services will be the first commercial use of autonomous vehicles. Tesla's price for autonomous driving activation sets a benchmark for car manufacturers that aim to market self-driving cars including BMW AG, Ford Motor Co. and General Motors Co. Alphabet Inc.'s Google and Uber are also testing self-driving cars on public roads.
"This is the first time somebody has put a price--a consumer price--toward what that feature set might cost," Stephanie Brinley, an industry analyst with IHS Markit, said. "It sets a level of expectations."
The description of Full Self-Driving Capability confirms Tesla is planning to launch a ride-sharing business. Its website noted that "using a self-driving Tesla for car sharing or ride hailing for friends and family is fine, but doing so for revenue purposes will only be permissible on the Tesla Network, details of which will be released next year."
Tesla didn't say how it plans to limit its self-driving vehicles to its own ride-hailing network. However, its statement to potential customers highlights a shift in the ride-share industry as Uber seeks to replace car ownership with on-demand transportation, and it underscores the potential benefit in a ride-hail company developing its own autonomous cars.
"Any smart car manufacturer sees that as a possibility and is also thinking about their own on-demand, autonomous transportation network," said Arun Sundararajan, a professor at New York University who has written about the sharing economy. "In the early stages, allowing your cars onto someone else's network reduces your ability to use your service."
Tesla buyers who use the network "could potentially pay back your lease or the cost of the car by doing so," said Tasha Keeney, an equity analyst with ARK Investment Management LLC.
Customers who don't want full self-driving capability could spend $5,000 for an enhanced version of the company's Autopilot semiautonomous system that will also use the new hardware.
Chief Executive Officer Elon Musk said on Wednesday he expects to deliver within two to three months software running on the new hardware that would be equivalent to Autopilot. After that, the software would be updated gradually to full autonomy. He aims to demonstrate a fully autonomous trip across the country by the end of 2017, he said.
The hardware that will enable Tesla cars to drive themselves includes front-facing radar, 12 sonar sensors, and eight cameras. The previous semiautonomous hardware included one camera. The additional cameras give the vehicle 360-degree visibility of objects up to 250 meters away.
Data collected by the cameras and other sensors is processed by onboard computer that has 40 times more power than the previous generation, according to Tesla. Chip maker Nvidia Corp. is providing its Titan graphics processing unit to help power the new system.
Mr. Musk in July laid out his vision of self-driving cars forming the basis of a ride-hailing network as part of the company's long-term plan in July.
"Since most cars are only in use by their owner for 5% to 10% of the day, the fundamental economic utility of a true self-driving car is likely to be several times that of a car which is not," Mr. Musk wrote in July.
Related Reading
* Tesla Extends Delivery Date of Model 3 for New Reservations
* Tesla Seeks Permission to Double size of California Car Plant
* Elon Musk Unveils Plans for New Tesla Vehicle Types
Credit: By Tim Higgins
Subject: Automobile industry; Software; Vehicles; Cameras; Ride sharing services
Company / organization: Name: Google Inc; NAICS: 519130; Name: Alphabet Inc; NAICS: 551114; Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: New York University; NAICS: 611310; Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Lyft Inc; NAICS: 518210; Name: Uber Technologies Inc; NAICS: 511210, 518210; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Oct 21, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1830520126
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1830520126?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Tesla Targets Car-Sharing --- Electric auto maker to charge $8,000 for software that allows for taxi-like auto rental
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]21 Oct 2016: B.6.
ProQuest document link
Abstract:
Tesla's price for autonomous driving activation sets a benchmark for car manufacturers that aim to market self-driving cars including BMW AG, Ford Motor Co. and General Motors Co. Alphabet Inc.'s Google and Uber are also testing self-driving cars on public roads.
Full text: Tesla Motors Inc. said it plans to charge buyers of its newest cars $8,000 to activate autonomous-driving technology, hinting those who do would be able to offset the cost through a ride-hailing network similar to Uber Technologies Inc. and Lyft Inc.
The $8,000 price covers the software to enable a new hardware option, called Full Self-Driving Capability, which will cost $10,000 if purchased separately from the vehicle.
The autonomous-driving software still needs to be validated, and regulators must approve it, the company said.
Several companies are racing to develop fully self-driving cars, and some are betting that ride-hailing services will be the first commercial use of autonomous vehicles. Tesla's price for autonomous driving activation sets a benchmark for car manufacturers that aim to market self-driving cars including BMW AG, Ford Motor Co. and General Motors Co. Alphabet Inc.'s Google and Uber are also testing self-driving cars on public roads.
"This is the first time somebody has put a price -- a consumer price -- toward what that feature set might cost," Stephanie Brinley, an industry analyst with IHS Markit, said. "It sets a level of expectations."
The description of Full Self-Driving Capability confirms Tesla is planning to launch a ride-sharing business. Its website noted that "using a self-driving Tesla for car sharing or ride hailing for friends and family is fine, but doing so for revenue purposes will only be permissible on the Tesla Network, details of which will be released next year."
Tesla didn't say how it plans to limit its self-driving vehicles to its own ride-hailing network. However, its statement to potential customers highlights a shift in the ride-share industry as Uber seeks to replace car ownership with on-demand transportation, and it underscores the potential benefit in a ride-hail company developing its own autonomous cars.
"Any smartcar manufacturer sees that as a possibility and is also thinking about their own on-demand, autonomous transportation network," said Arun Sundararajan, a professor at New York University who has written about the sharing economy. "In the early stages, allowing your cars onto someone else's network reduces your ability to use your service."
Tesla buyers who use the network "could potentially pay back your lease or the cost of the car by doing so," said Tasha Keeney, an equity analyst with ARK Investment Management LLC.
Customers who don't want full self-driving capability could spend $5,000 for an enhanced version of the company's Autopilot semiautonomous system that will also use the new hardware.
Credit: By Tim Higgins
Subject: Ride sharing services; Autonomous vehicles; Automobile industry; Software
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.6
Publication year: 2016
Publication date: Oct 21, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1830610153
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1830610153?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Earnings: The Moment of Truth; Tesla Motors has a low bar to hurdle in Wednesday's earnings report as analysts have slashed estimates
Author: Russolillo, Steven
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Oct 2016: n/a.
ProQuest document link
Abstract:
Using generally accepted accounting principles, Tesla is expected to log a loss of 59 cents a share. Since going public in 2010, Tesla only has reported one profitable quarter under this basis.
Full text: Tesla Motors Inc. Chief Executive Elon Musk raised the ante for third-quarter results. Analysts have been lowering it ever since.
In a staff memo sent in late August and earlier published by Bloomberg , Mr. Musk pleaded with employees to slash costs and deliver "every car we possibly can" to show positive cash flow. He called it Tesla's "last chance" to show investors it can be profitable before the Model 3 hits full production. "It would be awesome to throw a pie in the face of all the naysayers on Wall Street who keep insisting that Tesla will always be a money-loser," Mr. Musk wrote.
He might need to wait before he enters that pie-throwing competition. Wall Street analysts have cut their estimates sharply ahead of Wednesday's quarterly report. Those polled by FactSet estimate Tesla lost 4 cents a share on an adjusted basis. As recently as March, they had expected a quarterly profit of 52 cents a share. And in summer 2015, this estimate was as high as $1.09 a share.
Using generally accepted accounting principles, Tesla is expected to log a loss of 59 cents a share. Since going public in 2010, Tesla only has reported one profitable quarter under this basis. That came in 2013, when the stock surged from the mid-$30s to nearly $200. It has been volatile ever since, currently still trading around $200 with a silly valuation.
Whether or not the quarter is profitable, investors will want to hear about future production, which they are counting on to justify Tesla's share price . Earlier this month , Tesla reported third-quarter deliveries of its vehicles more than doubled from a year earlier to 24,500. It also reiterated its forecast earlier this month that it would produce 50,000 vehicles in the second half of 2016. And it maintains it will deliver 500,000 cars by 2018, thanks to the Model 3 mass-market sedan.
But Tesla has repeatedly overpromised and underdelivered. In the past five years, Tesla has failed to meet more than 20 of Mr. Musk's projections, according to an analysis by The Wall Street Journal .
There are other reasons for caution: the merger agreement with SolarCity Corp., the Securities and Exchange Commission investigation and a downbeat reliability ranking from Consumer Reports. Now, one-third of analysts have sell ratings on Tesla, more than double from the summer of 2015 and the most since it went public.
Time to hit the brakes on this stock.
Write to Steven Russolillo at steven.russolillo@wsj.com
Credit: By Steven Russolillo
Subject: Financial performance; Investments
Company / organization: Name: SolarCity Corp; NAICS: 238220, 333414, 221114; Name: Consumer Reports; NAICS: 511120; Name: Securities & Exchange Commission; NAICS: 926150; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Oct 25, 2016
column: Ahead of the Tape
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1831903250
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1831903250?accountid=7117
Copyright: (c) 20 16 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Earnings: What to Watch; Analysts expect narrower loss in latest period following record quarter of sales
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Oct 2016: n/a.
ProQuest document link
Abstract:
[...]quarter revenue is forecast to more than double to $2.34 billion from the same period a year ago.
Full text: Tesla Motors Inc.'s third-quarter financial results are expected to be released after the market closes on Wednesday. Here's what you need to know:
EARNINGS FORECAST: Tesla is expected to post a loss of 74 cents a share, according to the average estimates of six analysts surveyed by FactSet. That compares to a loss of $1.78 a share a year earlier. The narrower loss follows a record quarter of sales, helped by the new Model X sport-utility vehicle.
REVENUE FORECAST: Third-quarter revenue is forecast to more than double to $2.34 billion from the same period a year ago. Deliveries of Model S sedans and Model X rose to 24,500 during the quarter, more than double the number from the year-ago quarter. That included 8,700 Model Xs, which are new. The increased revenue should help Chairman and Chief Executive Elon Musk offset rising expenses associated with preparing for his next car, the Model 3. He pushed his employees to cut costs and boost sales during the third quarter.
WHAT TO WATCH:
SOLARCITY: Tesla announced plans for shareholders to vote on Nov. 17 to merge with SolarCity Corp., where Mr. Musk is also chairman and top shareholder. Analysts have been concerned that the merger may take Mr. Musk's attention away from rolling out the Model 3, a sedan aimed at helping boost the company's production to 500,000 in 2018 from about 50,000 last year. The Tesla plans to layout the financial case for the merger on Nov. 1.
CASH: Tesla finished the second-quarter with $3.25 billion in cash after having raised $1.7 billion in a May offering. The company had been saying it would likely raise additional cash before the end of the year, especially needed if the merger with SolarCity goes through, but those plans were apparently scraped in October when Musk posted a message on Twitter that the companies didn't, in fact, need to raise money in the fourth quarter. Tesla does have a $1.3 billion revolving credit lines, including $300 million to support its leasing business, that could help Mr. Musk. Analysts say Tesla will need more cash ultimately. The combined companies may ultimately need to raise $12.5 billion for spending through 2018, according to estimates by Oppenheimer.
GAAP: The company has said it would stop including non-GAAP revenue results, which includes the difference between how leases and vehicle buyback guarantees are treated. "For a growing company like Tesla, revenues under GAAP will be consistently lower than non-GAAP," Barclays' Brian Johnson wrote in a note to investors. "Ironically, while our revised 3Q estimate under the old accounting treatment would have been a quarterly profit (the first non-GAAP profit in two years), the new accounting treatment keeps our estimate at a loss." On an adjusted basis, Tesla was expected to post break-even earnings, according to the average estimate of 17 analysts surveyed by FactSet, compared with a loss of 58 cents a share in the year-ago period.
Write to Tim Higgins at Tim.Higgins@wsj.com
Credit: By Tim Higgins
Subject: Financial performance; Corporate profits; Lines of credit
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Oct 26, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1832224078
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1832224078?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Posts Second Profitable Quarter Ever; Shares rise after hours as revenue jumps sharply
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Oct 2016: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc. posted the second quarterly profit in its history as a public company, as the auto maker had its best sales period on record, helped by the new Model X sport-utility vehicle.
Full text: Tesla Motors Inc. posted the second quarterly profit in its history as a public company, as the auto maker had its best sales period on record, helped by the new Model X sport-utility vehicle.
The Palo Alto, Calif., company posted a profit of $21.9 million, or 14 cents a share, compared with a loss of $229.9 million, or $1.78 a share, in the year-earlier quarter. On an adjusted basis, the company posted per-share earnings of 71 cents. Revenue shot up to $2.3 billion from $936.8 million.
The company also said it expects to post a profit in the fourth quarter, excluding some stock-based compensation.
Tesla shares rose 5.5% to $213.44 in after-hours trading following the third-quarter report.
Deliveries of Model S sedans and Model Xs rose to 24,821 during the quarter, more than double the same quarter in 2015. That included 8,774 Model Xs, which are new. The company also said an additional 5,065 vehicles were in transit to customers at the end of the quarter, which would be recorded as deliveries for the fourth quarter.
The auto maker it is on track to make 50,000 vehicles in the second half of the year.
Increased sales helped the company churn a profit as Chief Executive Elon Musk pushes the company to create new models, including the Model 3 sedan slated for next year, and to finish building the world's largest battery factory .
The improved results could assist him in making the case that he can handle merging with SolarCity Corp . and help him raise additional cash down the road. The combined companies may ultimately need to raise $12.5 billion for spending through 2018, according to estimates by Oppenheimer, while others say Mr. Musk needs less. Tesla and SolarCity shareholders will decide on Nov. 17 whether to merge.
Tesla ended the third quarter with $3.1 billion of cash and cash equivalents, compared with $3.2 billion at the end of the second quarter.
Read More
* Tesla Earnings: The Moment of Truth
* Tesla Earnings: What to Watch
* Tesla Expects to Demonstrate Self-Driven Cross-Country Trip Next Year
Credit: By Tim Higgins
Subject: Financial performance; Automobile industry; Corporate profits; Vehicles
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Oct 26, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1832355699
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1832355699?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla: The Bill Is Still Coming Due; Tesla Motors' third-quarter results aren't as strong as they seem
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Oct 2016: n/a.
ProQuest document link
Abstract:
Tesla even reported positive free cash flow, defined as operating cash flow less capital spending, for the first time since 2013, to the tune of $176 million.
Full text: At first glance it is hard not to be impressed with results released Wednesday by Tesla Motors.
The company blew past boss Elon Musk's third-quarter profitability goal , reporting revenue of $2.3 billion and earnings per share of 14 cents. Both topped analyst expectations. Tesla also delivered a record number of cars in the third quarter and expects to meet its full-year target.
Tesla even reported positive free cash flow, defined as operating cash flow less capital spending, for the first time since 2013, to the tune of $176 million. Shares rose after hours, a sign that fortunes for beleaguered investors might be turning.
But a closer look suggests that Mr. Musk will have his hands full delivering on his vision. Tesla attributed its positive operating cash flow to higher sales and "careful expense management." Indeed, accounts payable and accrued liabilities rose by over $600 million from June 30 to $2.3 billion. An increase in payables flatters cash flow under generally accepted accounting principles.
Furthermore, the sale of regulatory credits to other auto makers generated $139 million of high-margin revenue, but Tesla expects "negligible" sales of them in the fourth quarter. Total net income was just $22 million.
In the longer term, the key question for the stock remains whether Tesla can deliver its Model 3 sedan on time and on budget. The stock's sky-high valuation leaves precious little room for a slipup.
Tesla still says it will begin volume production of the car in the second half of 2017, but there are reasons to be skeptical. The company slashed its 2016 capital expenditures budget by more than $400 million. And Tesla has a long track record of missing its self-imposed production deadlines .
Questions about the stock price's sustainability won't go away any time soon.
Write to Charley Grant at charles.grant@wsj.com
Get financial insights and commentary on global investing from The Wall Street Journal's Heard on the Street team. Subscribe to the podcast.
Credit: By Charley Grant
Subject: Earnings per share; Capital expenditures; Cash flow statements
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Oct 26, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1832359392
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1832359392?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Generates a Profit; Electric-car maker's deliveries more than double ahead of vote on SolarCity merger
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Oct 2016: n/a.
ProQuest document link
Abstract:
The quarter's profit--a record and only the second time ever--was driven higher by improved sales of the Model S sedan and Model X sport-utility vehicle, a reduction in spending and a boost from selling pollution tax credits to other auto makers.
Full text: Tesla Motors Inc. posted a surprise $22 million profit in its latest period, buoyed by record sales of its pricey electric cars and boosting Chief Executive Elon Musk's plan to sharply lift output ahead of its release of a sedan to compete against mass-market rivals.
The Palo Alto, Calif., company reported its first profit after 12 quarterly losses amid a push to generate cash for building its $35,000 Model 3. The company has pledged to lift annual production to 500,000 cars in 2018, from about 50,000 last year.
The quarter's profit--a record and only the second time ever--was driven higher by improved sales of the Model S sedan and Model X sport-utility vehicle, a reduction in spending and a boost from selling pollution tax credits to other auto makers. Gross profit from the credits soared to $139 million from $39 million a year ago--above UBS analyst Colin Langan's estimate for $30 million during the quarter.
"One of the criticisms I've seen out there is that perhaps Q3 was at the expense of Q4--this is not true," Mr. Musk told analysts on Wednesday. The company in the current quarter may be profitable on an adjusted basis and maybe without adjustments, he said. "We are headed to have a great fourth quarter."
Revenue shot up to $2.3 billion from $936.8 million a year earlier. Tesla delivered 24,821 of its Model S sedans and Model X sport-utility vehicles combined, more than double the year-ago figure.
Its shares were up 5% to $212.05 in after-hours trading on Wednesday.
Tesla said it generated free cash flow, repaid $600 million in debt and finished September with $3.1 billion in cash, a decline of $162 million from the end of June.
Tesla needs about $2.5 billion through the end of 2017 for the Model 3 rollout and the completion of a huge battery factory in Nevada, according to Brian Johnson, an automotive analyst at Barclays.
The improved results also could help Mr. Musk make the case that he can handle merging Tesla with SolarCity Corp ., which could require additional cash. The combined companies ultimately may need to raise $12.5 billion for spending through 2018, according to Oppenheimer & Co. Tesla and SolarCity shareholders are scheduled to vote on a merger Nov. 17.
Mr. Musk reiterated on Wednesday that Tesla doesn't need to raise money this year, adding that the plan to bring out the Model 3 doesn't include doing so. But he left the door open, noting that the modest war chest could get "a little scary in terms of how much capital we have in the bank relative to our sales volume."
"There could be unexpected negative things that occur; there could be some global, macroeconomic slowdown...Who knows what could happen?" Mr. Musk said.
Sales were likely helped by a new $66,000 version of the Model S, analysts said. The September quarter was the first full quarter in which Tesla offered that vehicle.
Tesla also lowered its forecast for capital spending this year to $1.8 billion from $2.25 billion. About $1 billion of that spending could occur in the fourth quarter, it said.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Heard on the Street: Tesla Results Still Leave Questions
* Tesla Expects to Demonstrate Self-Driven Cross-Country Trip Next Year
Credit: By Tim Higgins
Subject: Financial performance; Automobile industry; Automobile sales; Capital expenditures; Losses
Location: Palo Alto California
Company / organization: Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Oct 27, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1832371254
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1832371254?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Posts Surprise Profit of $22 Million
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 Oct 2016: B.1.
ProQuest document link
Abstract:
The quarter's profit -- a record and only the second ever -- was driven higher by improved sales of the Model S sedan and Model X sport-utility vehicle, a reduction in spending and a boost from selling pollution tax credits to other auto makers.
Full text: Tesla Motors Inc. posted a surprise $22 million profit in its latest period, buoyed by record sales of its pricey electric cars and boosting Chief Executive Elon Musk's plan to sharply lift output ahead of its release of a sedan to compete against mass-market rivals.
The Palo Alto, Calif., company reported its first profit after 12 quarterly losses amid a push to generate cash for building its $35,000 Model 3. The company has pledged to lift annual production to 500,000 cars in 2018, from about 50,000 last year.
The quarter's profit -- a record and only the second ever -- was driven higher by improved sales of the Model S sedan and Model X sport-utility vehicle, a reduction in spending and a boost from selling pollution tax credits to other auto makers. Gross profit from the credits soared to $139 million from $39 million a year ago -- above UBS analyst Colin Langan's estimate for $30 million during the quarter.
"One of the criticisms I've seen out there is that perhaps Q3 was at the expense of Q4 -- this is not true," Mr. Musk told analysts on Wednesday. The company in the current quarter may be profitable on an adjusted basis and maybe without adjustments, he said. "We are headed to have a great fourth quarter."
Revenue shot up to $2.3 billion from $936.8 million a year earlier. Tesla delivered 24,821 of its Model S sedans and Model X sport-utility vehicles combined, more than double the year-ago figure.
Its shares were up 5% to $212.05 in after-hours trading on Wednesday.
Tesla said it generated free cash flow, repaid $600 million in debt and finished September with $3.1 billion in cash, a decline of $162 million from the end of June.
Tesla needs about $2.5 billion through the end of 2017 for the Model 3 rollout and the completion of a huge battery factory in Nevada, according to Brian Johnson, an automotive analyst at Barclays.
The improved results also could help Mr. Musk make the case that he can handle merging Tesla with SolarCity Corp., which could require additional cash. Tesla and SolarCity shareholders are scheduled to vote on a merger Nov. 17.
Mr. Musk reiterated on Wednesday that Tesla doesn't need to raise money this year, adding that the plan to bring out the Model 3 doesn't include doing so.
Credit: By Tim Higgins
Subject: Financial performance; Automobile industry; Company reports
Location: Palo Alto California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Oct 27, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1832433841
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1832433841?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla CEO Elon Musk Aims to Make Solar Panels as Appealing as Electric Cars; Mr. Musk lays out vision of how his proposed merger of Tesla Motors, SolarCity would work
Author: Sweet, Cassandra; Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Oct 2016: n/a.
ProQuest document link
Abstract:
Unlike conventional solar panels, in which photovoltaic cells are assembled into a rectangular glass frame that is installed onto the roof of a building, Tesla and SolarCity have developed glass roofing tiles that are embedded with the devices that convert sunlight into electricity.
Full text: Elon Musk wants to make solar-roof panels as sexy as his electric luxury cars.
Mr. Musk, who is chairman of both Tesla Motors Inc. and SolarCity Corp., laid out in broad strokes his vision for how his proposed merger of the two companies would result in an integrated system of solar panels, wall-mounted batteries and electric cars.
"People always think of Tesla as an electric-car company, but really the whole point of Tesla was to accelerate the advent of sustainable energy," Mr. Musk said on a stage at Universal Studios in Los Angeles surrounded by houses outfitted with glass solar tiles roughly the size and shape of roofing shingles.
"The goal is...to make solar roofs that look better than a normal roof, generate electricity, last longer, have better insulation and an installed cost that is less than a normal roof plus the cost of electricity," he said.
The audience greeted his words with cheers of encouragement, including an attendee who yelled, "Save us, Elon!"
Consumers equipped with the products of the combined companies could generate enough clean energy to help reduce global greenhouse gases, he said, and score points with neighbors.
"The key is really to make solar something desirable where if you install a solar roof on your house, you're really proud, you want to put it on the most prominent part of the house, you want to call your neighbors over and say, 'Check out the sweet roof,'" Mr. Musk said.
The new product comes as Mr. Musk works to persuade shareholders to approve Tesla's proposed $2.2 billion acquisition of SolarCity.
He is expected to disclose his expectations for the combined company's financials on Tuesday.
Unlike conventional solar panels, in which photovoltaic cells are assembled into a rectangular glass frame that is installed onto the roof of a building, Tesla and SolarCity have developed glass roofing tiles that are embedded with the devices that convert sunlight into electricity.
SolarCity, which is the largest U.S. home-solar-panel installer, would likely target the products at homeowners. Mr. Musk didn't provide details as to how, exactly, each company would contribute to the venture.
Tesla plans to make four different glass roof tiles: an American-style textured glass tile; another that resembles a French slate roof; a third that has a smooth, contemporary look; and a Tuscan tile that resembles Italian terra-cotta roofing materials.
SolarCity has said it plans to start making solar products next summer at a factory in Buffalo, N.Y. Mr. Musk didn't say how much the solar tiles would cost.
Mr. Musk said Tesla's newest generation home battery, called the Powerwall 2, would cost $5,500, and could store and provide 14 kilowatt-hours of electricity, enough to power a four-bedroom home for a day. The earlier model had about half that capacity.
Tesla and SolarCity are unprofitable, and SolarCity is low on cash and in a different industry, which has led some analysts and investors to question the combination. Mr. Musk, however, has pitched the merger as part of a "master plan" to build a company that makes clean transportation and energy products aimed at helping the world transition to a low-carbon economy. Shareholders on both sides of the transaction are scheduled to vote on the merger on Nov. 17.
Tesla reported a surprise third-quarter profit on Wednesday, helped by record auto sales and efforts to make its operations more cost-effective. Mr. Musk said the company didn't need to raise cash this quarter and that he could bring to market the Model 3 midprice electric car next year without raising additional funds, though he suggested it might be prudent to do so. He is depending upon demand for the $35,000 sedan to help boost production to 500,000 vehicles in 2018 from about 50,000 last year, generating cash to help fuel his ambition to promote electricity over fossil fuels.
Mr. Musk has been building a case for the merger as part of his long-term vision for Tesla. He aims to transform the 13-year-old company from a niche maker of luxury cars into a vertically integrated transportation company that helps customers generate solar power, store it and use it to fuel vehicles that eventually will drive themselves--and pay for themselves through a proprietary car-sharing network .
SolarCity, for its part, sells solar panels primarily to homeowners, although it also markets to commercial property owners. In addition to the panels, the San Mateo, Calif., company sells and installs batteries, made by Tesla, that connect to the panels as a way to store excess power at homes and office buildings.
Tesla sells its stationary energy-storage batteries to other installers too, for an array of applications.
The companies plan to manufacture solar panels in a Buffalo, N.Y., factory that is financed partly by state taxpayers . New York state has spent about $480 million to construct the facility and another $120 million on manufacturing equipment, said a spokesman at Empire State Development, the state agency overseeing the project.
SolarCity, in return for government assistance, has promised to spend $5 billion in New York over 10 years and create 500 jobs in Buffalo, plus thousands of positions elsewhere in the state.
Tesla has agreed with Panasonic Corp. to make its own panels at the factory, which SolarCity would then install on the roofs of homes and possibly commercial buildings.
Some analysts are skeptical that Tesla and SolarCity can kick-start a new business for the solar-roofing product that would significantly boost revenue.
"It's hard enough to be a successful auto company without commingling the risks related to solar-panel adoption simultaneously," said Jamie Albertine, an analyst at Consumer Edge Research LLC.
The combined Tesla-SolarCity would face a slowing consumer market for solar panels, as well as falling prices.
U.S. residential solar panel installations are likely to grow 23% this year and 17% to 18% in 2017, according to forecasts by clean-energy research firm GTM Research. That compares to 66% growth in 2015 over the previous year. The growth rate is slowing as the market matures in California, where about half the nation's home panels are installed, and installers are finding it more expensive to reach the next wave of homeowners, said Shayle Kann, GTM's vice president of research.
"This is a market that has historically, through 2015, been growing at more than 50% a year, and it is not doing that this year and won't do that anymore," he said. "It's reverting back to more incremental, but hopefully sustainable, growth."
Wholesale prices for high-quality Chinese panels have fallen to an average of less than 40 cents a watt, from 55 cents a watt earlier this year, according to analysts at Deutsche Bank AG.
Cash-strapped SolarCity has said it is working to cut its costs and shore up its balance sheet. The company spent $751 million in 2015 on sales, administrative and research costs, 88% more than its annual revenue of $400 million and the $399 million it spent the previous year. This year through June, the company spent $438 million, 42% more than its revenue of $308 million. The company had $146 million in cash, as of June 30, compared with $421 million of cash it had a year earlier.
SolarCity raised $305 million in September through a cash equity transaction with Quantum Strategic Partners Ltd., the hedge fund of billionaire investor George Soros. It sold $100 million of bonds last August to Mr. Musk, SolarCity Chief Executive Lyndon Rive and SolarCity Chief Technology Officer Peter Rive.
Write to Cassandra Sweet at cassandra.sweet@wsj.com and Tim Higgins at Tim.Higgins@WSJ.com
Related
* Tesla Generates a Profit
* Tesla: The Bill Is Still Coming Due -- Heard on the Street
* Tesla to Partner with Panasonic to Make Solar Panels at Buffalo Factory
* Tesla Expects to Demonstrate Self-Driven Cross-Country Trip Next Year
Credit: By Cassandra Sweet and Tim Higgins
Subject: Photovoltaic cells; Roofing; Electric vehicles; Stockholders
Location: Los Angeles California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Oct 29, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1833195456
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1833195456?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla's Chief Offers Merger Vision --- Musk sets out goals for a SolarCity deal: less greenhouse gases and even 'sweet' roofs
Author: Sweet, Cassandra; Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]31 Oct 2016: B.4.
ProQuest document link
Abstract:
Unlike conventional solar panels, in which photovoltaic cells are assembled into a rectangular glass frame that is installed on the roof of a building, Tesla and SolarCity have developed glass roofing tiles that are embedded with the devices, which convert sunlight into electricity.
Full text: Elon Musk wants to make solar-roof panels as sexy as his electric luxury cars.
Mr. Musk, chairman of both Tesla Motors Inc. and SolarCity Corp., laid out his vision for how his proposed merger of the companies would result in an integrated system of solar panels, wall-mounted batteries and electric cars.
"People always think of Tesla as an electric-car company, but really the whole point of Tesla was to accelerate the advent of sustainable energy," Mr. Musk said on a stage at Universal Studios in Los Angeles surrounded by houses outfitted with glass solar tiles roughly the size and shape of roofing shingles.
"The goal is. . .to make solar roofs that look better than a normal roof, generate electricity, last longer, have better insulation and an installed cost that is less than a normal roof plus the cost of electricity," he said. The audience greeted his words with cheers, including an attendee who yelled, "Save us, Elon!"
Consumers equipped with the products of the combined companies could generate enough clean energy to help reduce global greenhouse gases, he said, and score points with neighbors.
"The key is really to make solar something desirable, where if you install a solar roof on your house, you're really proud; you want to put it on the most prominent part of the house, you want to call your neighbors over and say, 'Check out the sweet roof,'" Mr. Musk said.
The new product comes as Mr. Musk works to persuade shareholders to approve Tesla's proposed $2.2 billion acquisition of SolarCity.
He is expected to disclose his expectations for the combined company's financial results on Tuesday.
Unlike conventional solar panels, in which photovoltaic cells are assembled into a rectangular glass frame that is installed on the roof of a building, Tesla and SolarCity have developed glass roofing tiles that are embedded with the devices, which convert sunlight into electricity.
SolarCity, the largest U.S. home-solar-panel installer, likely would target the products at homeowners.
Tesla plans to make four different glass roof tiles: an American-style textured glass tile; another that resembles a French slate roof; a third that has a smooth, contemporary look; and a Tuscan tile that resembles Italian terra-cotta roofing materials. Mr. Musk didn't say how much the solar tiles would cost.
Mr. Musk said Tesla's newest-generation home battery, called the Powerwall 2, would cost $5,500, and could store and provide 14 kilowatt-hours of electricity, enough to power a four-bedroom home for a day. The earlier model had about half that capacity.
Tesla and SolarCity are unprofitable. Mr. Musk, however, has pitched the merger as part of a "master plan" to build a company that makes clean transportation and energy products aimed at helping the world switch to a low-carbon economy. Shareholders on both sides of the transaction are scheduled to vote on the merger on Nov. 17.
Tesla reported a surprise third-quarter profit on Wednesday, helped by record auto sales and efforts to make its operations more cost-effective.
Mr. Musk said the company didn't need to raise cash this quarter, and that he could bring its Model 3 midprice electric car to market next year without raising additional funds, though he suggested it might be prudent to do so. He is depending upon demand for the $35,000 sedan to help boost production to 500,000 vehicles in 2018 from about 50,000 last year, generating cash to help fuel his ambition to promote electricity over fossil fuels.
Some analysts are skeptical Tesla and SolarCity can kick-start a new business for the solar-roofing product that significantly would boost revenue. "It's hard enough to be a successful auto company without commingling the risks related to solar-panel adoption simultaneously," said Jamie Albertine, an analyst at Consumer Edge Research LLC.
The combined Tesla-SolarCity would face a slowing consumer market for solar panels, as well as falling prices.
U.S. residential solar-panel installations are likely to grow 23% this year and 17% to 18% in 2017, according to forecasts by clean-energy research firm GTM Research. That compares with 66% growth in 2015 from the previous year.
The growth rate is slowing as the market matures in California, where about half the nation's home panels are installed, and installers are finding it more expensive to reach the next wave of homeowners, said Shayle Kann, GTM's vice president of research.
Wholesale prices for high-quality Chinese panels have fallen to an average of less than 40 cents a watt, from 55 cents a watt earlier this year, according to analysts at Deutsche Bank AG.
Credit: By Cassandra Sweet and Tim Higgins
Subject: Photovoltaic cells; Acquisitions & mergers; Solar energy
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: SolarCity Corp; NAICS: 221114, 238220, 333414
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2016
Publication date: Oct 31, 2016
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1833890280
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1833890280?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Panasonic: A Safer Bet on Tesla Than Tesla Itself; A plunge in Panasonic's shares offers a safer entry point for exposure to electric cars
Author: Wong, Jacky
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Nov 2016: n/a.
ProQuest document link
Abstract: None available.
Full text: In Tesla's case, it may be better to own the battery than the electric car.
Japanese electronics giant Panasonic is the sole supplier of batteries to Tesla's Model S, Model X and Model 3. Its shares plunged nearly 7% Tuesday after it slashed its adjusted operating profit forecast for this fiscal year by 17%. But the reasons for the fall may just be entry points for the stock.
The main blame for cutting the operating profit forecast was a stronger yen , though it is hard to see how investors hadn't seen that one coming. The other reason: an earlier-than-expected investment in the so-called gigafactory supplying Tesla . Panasonic spent ¥15 billion ($143 million) on the factory, which sits on more than 3,000 acres in the Nevada desert, in the six months ended September. It expects to sink in more in the second half.
Though the cash outlay hurts Panasonic's earnings in the short term, it may not be all bad. While ultimately it depends on whether Tesla, which is notorious for missing its self-imposed production deadlines , is timely in delivering on its latest promises on its mainstream Model 3 sedan, the need to bring forward the investment schedule may mean returns could come earlier than expected, too. The company raised ¥400 billion yen through issuing bonds with a maximum coupon of a mere 0.47% in September, so funding is both secured and inexpensive.
Anyway, the ramping up of the investments has shaved only 3% off Panasonic's forecast for adjusted operating profit. The bulk of the reduction comes from the impact of the yen , which has appreciated 15% versus the dollar over the past year. Panasonic reports its results in yen, but a big part of its sales is in other currencies, so a rising yen hurts its earnings. Worse still, its earnings have become more sensitive to a strengthening yen as it relies more on exports.
Stripping away the currency effects, Panasonic's core appliance and automotive businesses are, in fact, pretty stable, and the stock offers a sustainable 2% dividend yield. Panasonic trades at 12 times next fiscal year's expected earnings after the selloff, according to S&P Global Market Intelligence. Analysts may follow the company to adjust down their forecasts, but that is still a safer and cheaper bet on an electric-car future than Tesla itself.
Credit: By Jacky Wong
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Nov 1, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1834293367
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1834293367?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Says SolarCity Deal Would Boost Balance Sheet; Merger would add more than $500 million during next three years, auto maker says
Author: Higgins, Tim; Sweet, Cassandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Nov 2016: n/a.
ProQuest document link
Abstract:
Mr. Musk, who is chairman of both companies, has been making the case since summer for accelerating his vision of an auto maker that sells a suite of products to enable sustainable car ownership, including solar panels that collect energy, wall-mounted battery packs that store it, and electric vehicles fueled by it.
Full text: SolarCity Corp. would add more than a $500 million in cash to Tesla Motors Inc.'s balance sheet during the next three years if the two companies were to merge , the auto maker said.
The solar business would contribute more than $1 billion in revenue next year, Tesla said in a statement posted on its website Tuesday as part of Chief Executive Elon Musk's continued effort to persuade shareholders to accept the proposed merger.
SolarCity has been spending more than $200 million a quarter, while taking in less than that in revenue.
Shareholders of both companies are scheduled to vote on the tie-up on Nov. 17.
"By combining SolarCity with Tesla, we expect to significantly expand our total addressable market to include a solar market that generates $12 billion in the U.S. alone, and that is expected to grow at a compounded annual growth rate of between 15-20% in the next 5 years," Tesla said in the statement.
"Additionally, with the new products that we have shown, we expect that solar's share of the nation's $400 billion in annual retail electricity sales will increase more than anyone currently expects," the statement continued, referring to solar roof tiles shown by Tesla last week.
SolarCity increased its cash in the third quarter from the second quarter this year, the statement said. That includes a $305 million cash equity transaction last September with Quantum Strategic Partners Ltd., the hedge fund of billionaire investor George Soros.
SolarCity leases many of the rooftop solar panels it installs on homes and receives monthly payments from those customers in return. Such contracts will generate $8 billion over the next 20 years, Tesla said.
"As SolarCity further shifts its product mix to cash sales and loans, it will further increase the upfront cash generation of new installations and expects to increase its cash balance even more in Q4 2016," Tesla said.
In addition, Tesla said the companies planned to accelerate SolarCity's cost-cutting as part of "strict cost discipline."
Mr. Musk, who is chairman of both companies, has been making the case since summer for accelerating his vision of an auto maker that sells a suite of products to enable sustainable car ownership, including solar panels that collect energy, wall-mounted battery packs that store it, and electric vehicles fueled by it. Mr. Musk also is laying the groundwork for cars that drive themselves and could be rented out to make money when not in use by the owner.
Mr. Musk on Friday demonstrated glass-tile solar panels that look like traditional roofing materials. The tiles would cost less than a conventional roof plus electricity, he said. He didn't announce when they would be available for sale.
The statement outlining the financial impact of a Tesla-SolarCity merger followed Tesla's announcement last week of its first quarterly profit in three years , buoyed by record sales and reduced manufacturing costs along with the sale of Zero Emission Vehicle credits to other auto makers. Mr. Musk said Tesla is on track for another profitable quarter on adjusted basis in the current quarter ending in December.
Tesla is preparing to ramp up assembly of the forthcoming Model 3 sedan, a vehicle Mr. Musk said he believes will take the company's production to 500,000 vehicles in 2018 from about 50,000 last year. He is on track to produce about 80,000 vehicles this year, Mr. Musk said last week.
Write to Tim Higgins at Tim.Higgins@WSJ.com and Cassandra Sweet at cassandra.sweet@wsj.com
Credit: By Tim Higgins and Cassandra Sweet
Subject: Automobile sales; Automobile industry; Vehicles; Stockholders
People: Soros, George
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Nov 1, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1834531819
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1834531819?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journa l
Tesla Says SolarCity Deal Would Boost Balance Sheet; Merger would add more than $500 million during next three years, auto maker says
Author: Higgins, Tim; Sweet, Cassandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Nov 2016: n/a.
ProQuest document link
Abstract:
"Would you go to an Apple store," he asked, "and expect to see six different cellphones [for sale]?" Mr. Musk last week showed how the companies would work together at a Los Angeles event where he unveiled a product suite that integrated rooftop solar generation , energy storage and electric cars.
Full text: SolarCity Corp. would add more than $500 million in cash to Tesla Motors Inc.'s balance sheet during the next three years if the two companies were to merge , the auto maker said.
The solar business would contribute more than $1 billion in revenue next year, Tesla said in a statement posted on its website Tuesday as part of Chief Executive Elon Musk's continued effort to persuade shareholders to accept the proposed merger on Nov. 17.
SolarCity had nearly $400 million in revenue in 2015 through leasing solar panels that it installs on homeowners' roofs, but the company plans to sell more panels for cash in the years ahead. Analysts polled by FactSet are expecting SolarCity to reach $694 million in sales this year.
During a call Tuesday that included SolarCity's senior leaders, Mr. Musk, who is chairman of both companies, told analysts that he anticipated shareholders would approve the deal.
"I'm pretty optimistic about where the vote is going," he said. "The early votes so far have been overwhelmingly in favor."
Mr. Musk said it would be difficult for Tesla and SolarCity as separate companies to play the leading role they envision in consumer and utility power, and that a single, unified brand would be more powerful. "Would you go to an Apple store," he asked, "and expect to see six different cellphones [for sale]?"
Mr. Musk last week showed how the companies would work together at a Los Angeles event where he unveiled a product suite that integrated rooftop solar generation , energy storage and electric cars.
SolarCity has been spending more than $200 million a quarter, while taking in less than that in revenue, a burn rate that has worried some investors.
The company, which is run by Mr. Musk's cousins, has built its business by leasing the panels, often for no money down, in return for monthly payments over several years. Such leases would generate $8 billion over the next 20 years, according to Tesla. SolarCity's plans to sell more panels also would boost its cash reserve.
"As SolarCity further shifts its product mix to cash sales and loans, it will further increase the upfront cash generation of new installations and expects to increase its cash balance even more in Q4 2016," Tesla said on its website.
SolarCity increased its cash in the third quarter from the second quarter this year, Tesla said. That included a $305 million cash equity transaction last September with Quantum Strategic Partners Ltd., the hedge fund of billionaire investor George Soros.
In addition, Tesla said the companies planned to accelerate SolarCity's cost-cutting as part of "strict cost discipline."
Mr. Musk has been making the case since summer for accelerating his vision of an auto maker that sells a suite of products to enable sustainable car ownership. Mr. Musk also is laying the groundwork for cars that drive themselves and could be rented out to make money when not in use by the owner.
Mr. Musk on Friday demonstrated glass-tile solar panels that look like traditional roofing materials. He didn't say when they would be available for sale.
"By combining SolarCity with Tesla, we expect to significantly expand our total addressable market to include a solar market that generates $12 billion in the U.S. alone, and that is expected to grow at a compounded annual growth rate of between 15-20% in the next five years," Tesla said in the statement.
"Additionally, with the new products that we have shown, we expect that solar's share of the nation's $400 billion in annual retail electricity sales will increase more than anyone currently expects," the statement said, referring to solar roof tiles shown by Tesla last week.
The statement outlining the financial impact of a Tesla-SolarCity merger followed Tesla's announcement last week of its first quarterly profit in three years , buoyed by record sales and reduced manufacturing costs along with the sale of Zero Emission Vehicle credits to other auto makers. Mr. Musk said Tesla is on track for another profitable quarter on adjusted basis in the current quarter ending in December.
Tesla is preparing to ramp up assembly of the forthcoming Model 3 sedan, a vehicle Mr. Musk said he believes will take the company's production to 500,000 vehicles in 2018 from about 50,000 last year. He is on track to produce about 80,000 vehicles this year, Mr. Musk said last week.
SolarCity is scheduled to report third-quarter financial results next week.
Write to Tim Higgins at Tim.Higgins@WSJ.com and Cassandra Sweet at cassandra.sweet@wsj.com
Credit: By Tim Higgins and Cassandra Sweet
Subject: Stockholders; Automobile industry
People: Soros, George
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Nov 2, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1834600421
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1834600421?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Says SolarCity Merger Would Boost Balance Sheet
Author: Higgins, Tim; Sweet, Cassandra
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Nov 2016: B.4.
ProQuest document link
Abstract:
SolarCity had nearly $400 million in revenue in 2015 through leasing solar panels that it installs on homeowners' roofs, but the company plans to sell more panels for cash in the years ahead.
Full text: SolarCity Corp. would add more than $500 million in cash to Tesla Motors Inc.'s balance sheet during the next three years if the two companies were to merge, the auto maker said.
The solar business would contribute more than $1 billion in revenue next year, Tesla said in a statement posted on its website Tuesday as part of Chief Executive Elon Musk's continued effort to persuade shareholders to accept the proposed merger on Nov. 17.
SolarCity had nearly $400 million in revenue in 2015 through leasing solar panels that it installs on homeowners' roofs, but the company plans to sell more panels for cash in the years ahead.
Analysts polled by FactSet are expecting SolarCity to reach $694 million in sales this year.
During a call Tuesday that included SolarCity's senior leaders, Mr. Musk, who is chairman of both companies, told analysts that he anticipated shareholders would approve the deal.
"I'm pretty optimistic about where the vote is going," he said. "The early votes so far have been overwhelmingly in favor."
Mr. Musk said it would be difficult for Tesla and SolarCity as separate companies to play the leading role they envision in consumer and utility power, and that a single, unified brand would be more powerful.
SolarCity is scheduled to report third-quarter financial results next week.
Credit: By Tim Higgins and Cassandra Sweet
Subject: Balance sheets; Acquisitions & mergers
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: SolarCity Corp; NAICS: 221114, 238220, 333414
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2016
Publication date: Nov 2, 2016
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1834747842
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1834747842?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Proxy Service ISS Endorses Proposed Tesla, SolarCity Deal; Says deal 'necessary step' toward Tesla being integrated sustainable energy company
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Nov 2016: n/a.
ProQuest document link
Abstract:
Institutional Shareholder Services Inc., advising large investors on corporate governance issues, said Friday "the transaction is a necessary step toward (Tesla's) goal of being an integrated sustainable energy company."
Full text: The proposed merger of Tesla Motors Inc. and SolarCity Corp. has received an endorsement from an influential shareholder proxy service, an important show of confidence for entrepreneur Elon Musk's controversial plan ahead of a Nov. 17 vote.
Institutional Shareholder Services Inc., advising large investors on corporate governance issues, said Friday "the transaction is a necessary step toward (Tesla's) goal of being an integrated sustainable energy company." The firm's report recommended Tesla shareholders approve the deal and said "it appears reasonable to assume that (Tesla) is paying a low to no premium to take over (SolarCity)."
SolarCity shares shot up 10% to $20.44 in morning trading, while Tesla traded up 2.8% at $192.62.
In a separate report, the firm recommended that SolarCity shareholders approve the merger as well, saying it provides the option of selling the more liquid Tesla stock or to participate in the possible gains of the merger.
Meanwhile, Glass, Lewis & Co., a rival shareholder proxy service, recommended Tesla shareholders vote against the deal. "We believe non-affiliated Tesla investors should be concerned the proposed tie-up of Tesla and SolarCity mostly amounts to [a] thinly veiled bail-out plan," the company said in a Friday report.
A Tesla spokeswoman declined to comment on the Glass Lewis report.
Mr. Musk, chairman of both companies, has proposed turning Tesla into a company that expands beyond car making to also offer customers fashionable home solar panels that can generate power that is stored at home in batteries to charge the electric vehicles. The proposal, however, has led to fear a larger mandate for Tesla that will distract management during the complicated and important introduction of the Model 3 next year.
Tesla expects the Model 3, a more affordable electric car than the luxury Model S sedan and Model X SUV, to fuel a production increase of 500,000 in 2018 from about 50,000 last year.
ISS tamped down concerns about Tesla's ability to access the capital markets after the SolarCity merger.
"It seems likely that (Tesla), a company with currently almost $30 billion in market cap, could bridge a financing gap, albeit at a high financing cost, if conditions are very adverse until capital markets open up," the firm said.
"We very much appreciate that Institutional Shareholder Services, following an in-depth examination of both companies, recommends in favor of Tesla's acquisition of SolarCity," Tesla said in a statement.
"The combined company will become the world's only integrated sustainable energy company, ranging from clean energy generation to storage to transportation, resulting in a better outcome for shareholders, customers and the environment."
Charley Grant contributed to this article.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Corporate governance; Investments; Electric vehicles; Capital markets; Stockholders; Production increases
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Nov 4, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1836036477
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1836036477?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Motors Plans to Charge for Its Quick-Charge Access; As Model 3 launch approaches, Tesla scales back how much new drivers can use its fast-charging stations without paying
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Nov 2016: n/a.
ProQuest document link
Abstract:
Most sellers of electric cars, including General Motors Co. and BMW AG, leave buyers to rely on home-charging stations, public charging stations or independent power providers for their charging needs.
Full text: Tesla Motors Inc. next year will stop providing unlimited free access to its fast-charging stations for new buyers of its electric vehicles, a move intended to help pay for the charging network and the launch of a cheaper and higher-volume electric sedan.
Tesla has gained notoriety for free access to proprietary stations that can recharge its $66,000 and up cars in far less time than a conventional charger. While the company's investment in the "Supercharger Network" has been steep, it considers the cost a replacement for the hefty sums most auto makers dish out for advertising or sales incentives.
The Silicon Valley auto maker introduced the perk four years ago and expanded it to Europe and Asia. But buyers of vehicles ordered after Jan. 1 will have to pay for charging after using 400 kilowatt-hours of charging annually, equal to about 1,000 miles of travel.
"Beyond that, there will be a small fee to Supercharge which will be charged incrementally and cost less than the price of filling up a comparable gas car," Tesla said in a posting on its website.
Most sellers of electric cars, including General Motors Co. and BMW AG, leave buyers to rely on home-charging stations, public charging stations or independent power providers for their charging needs.
The Tesla stations were intended to give drivers traveling long distance the ability to charge their vehicles quickly, but they have become increasingly crowded as the number of Tesla vehicles on the road grew. Supercharger pricing, which may fluctuate over time and by region based on electricity costs, will be released later this year.
The changes won't affect current owners or Tesla orders placed before Jan. 1 and delivered by April 1, Tesla said. The move comes ahead of next year's deliveries of the Model 3 sedan, which Chief Executive Officer Elon Musk says will help increase the company's production to 500,000 vehicles in 2018 from about 50,000 last year.
Tesla faces hefty demands on its finances, which likely will grow if Mr. Musk's plan to acquire SolarCity Corp., a solar-panel company where he is chairman, succeeds. Mr. Musk wants Tesla to offer a suite of products that enable sustainable vehicle ownership.
The Supercharger network has 734 locations world-wide, according to the company. Car sales growth has strained the network's capacity, and Tesla has worried about its ability to offer service.
Tesla has said it has 373,000 reservations for the Model 3.
"The increasing number of Model S and Model X vehicles, as well as the significant increase in our vehicle fleet size that we expect from Model 3, will require us to continue to increase the number our Supercharger stations significantly," the company said in a quarterly filing this month. "If we fail to do so, our customers could become dissatisfied, which could adversely affect sales of our vehicles."
Mr. Musk first hinted at the company's annual meeting in 2015 that the charging network could change, noting that some people were "abusing" the system by using it for daily charging rather than for quick fill-ups between cities. This was causing congestion at the stations.
"There are a few people who are quite aggressively using it for local supercharging," he said at the time. "We'll sort of send them just a reminder note that it's cool to do this occasionally, but it's meant to be a long-distance thing."
In June, Mr. Musk said buyers of the Model 3, which start at $35,000, would be charged to use the network . When the Model S first launched, owners of the less-expensive model initially had to pay up to $2,500 to enable the car to have access to the system. Free supercharging for all vehicles has been standard since April 2015.
Joshua Jamerson contributed to this article
Write to Tim Higgins at Tim.Higgins@WSJ.com
More on Tesla
* Tesla Generates a Profit (Oct. 26)
* Results Still Leave Questions (Oct. 26)
* For Tesla, It's All in the Delivery (Aug. 15)
* Tesla Owners Will Have to Pay for Supercharger Access (June 1)
Credit: By Tim Higgins
Subject: Automobile industry; Automobile sales; Electric vehicles
Company / organization: Name: SolarCity Corp; NAICS: 238220, 333414, 221114; Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Nov 7, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1836700961
Document URL: https://login.ezproxy.ut a.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1836700961?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
New Tesla Owners to Pay for Fast Charges
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 Nov 2016: B.1.
ProQuest document link
Abstract:
Most sellers of electric cars, including General Motors Co. and BMW AG, leave buyers to rely on home-charging stations, public charging stations or independent power providers for their charging needs.
Full text: Tesla Motors Inc. next year will stop providing unlimited free access to its fast-charging stations for new buyers of its electric vehicles, a move intended to help pay for the charging network and the launch of a cheaper and higher-volume electric sedan.
Tesla has gained notoriety for free access to proprietary stations that can recharge its $66,000 and up cars in far less time than a conventional charger. While the company's investment in the "Supercharger Network" has been steep, it considers the cost a replacement for the hefty amounts most auto makers dish out for advertising or sales incentives.
The Silicon Valley auto maker introduced the perk four years ago and expanded it to Europe and Asia. But buyers of vehicles ordered after Jan. 1 will have to pay for charging after using 400 kilowatt-hours of charging annually, equal to about 1,000 miles of travel.
"Beyond that, there will be a small fee to Supercharge which will be charged incrementally and cost less than the price of filling up a comparable gas car," Tesla said in a posting on its website.
Most sellers of electric cars, including General Motors Co. and BMW AG, leave buyers to rely on home-charging stations, public charging stations or independent power providers for their charging needs.
The Tesla stations were intended to give drivers traveling long distance the ability to charge their vehicles quickly, but they have become increasingly crowded as the number of Tesla vehicles on the road has grown. The Supercharger network has 734 locations world-wide, according to the company.
Supercharger pricing, which may fluctuate over time and by region based on electricity costs, will be released later this year.
The changes won't affect current owners or Tesla orders placed before Jan. 1 and delivered by April 1, Tesla said. The move comes ahead of next year's deliveries of the Model 3 sedan, which Chief Executive Elon Musk says will help increase the company's production to 500,000 vehicles in 2018 from about 50,000 last year.
Tesla has said it has 373,000 reservations for the Model 3.
The company faces hefty demands on its finances, which likely will grow if Mr. Musk's plan to acquire
SolarCity Corp., a solar-panel company where he is chairman, succeeds.
"The increasing number of Model S and Model X vehicles, as well as the significant increase in our vehicle fleet size that we expect from Model 3," will require more stations, Tesla said earlier this month. "If we fail to do so, our customers could become dissatisfied, which could adversely affect sales of our vehicles."
Mr. Musk first hinted in 2015 that the charging network could change, noting that some people were "abusing" the system by using it for daily charging rather than for quick fill-ups between cities. It was causing congestion at the stations. In June, Mr. Musk said buyers of the $35,000 and up Model 3 would be charged to use the network.
When the Model S first launched, owners of the less-expensive model initially had to pay up to $2,500 to enable the car to have access to the system. Free supercharging for all vehicles has been standard since April 2015.
---
Joshua Jamerson contributed to this article.
Credit: By Tim Higgins
Subject: Automobile industry; Service stations; Electric power; Electric vehicles; Fees & charges
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Nov 8, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1836887480
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1836887480?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Acquires German Engineering Firm in Move to Boost Production; Purchase of Grohmann Engineering seen aiding auto maker's goal of building 500,000 cars annually
Author: Minaya, Ezequiel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Nov 2016: n/a.
ProQuest document link
Abstract:
The quarter's profit--a record and only the second time ever--was driven higher by improved sales of the Model S sedan and Model X sport-utility vehicle, a reduction in spending and a boost from selling pollution tax credits to other auto makers.
Full text: Tesla Motors Inc. said Tuesday it had reached a deal to acquire German firm Grohmann Engineering as part of efforts to boost production to 500,000 cars a year by 2018 and expand its footprint in Germany.
Details of the deal weren't given.
After the transaction is closed the engineering company from Prum, Germany, will be renamed Tesla Grohmann Automation and serve as the initial foundation for Tesla Advanced Automation Germany. The deal, pending regulatory approvals, is expected to close in early 2017.
In a prepared statement, Tesla touted the firm as a leader in "highly automated methods of manufacturing" and said the acquisition brings "a world-class team and unique expertise in-house." The move is also a step in the ambitions of Tesla founder Elon Musk to eventually compete with mass-market rivals.
Grohmann will serve as the headquarters for Tesla Advanced Automation Germany--with other locations to follow--as Tesla plans to add over 1,000 engineering and technician jobs in the European country over the next two years, the car company said.
Last month, Tesla reported a surprise $22 million profit in its latest period, buoyed by record sales of its pricey electric cars and boosting Mr. Musk's plan to sharply lift output ahead of its release of a sedan to compete against bigger car makers.
The Palo Alto, Calif., company reported its first profit after 12 quarterly losses amid a push to generate cash for building its $35,000 Model 3. The company produced about 50,000 cars last year.
The quarter's profit--a record and only the second time ever--was driven higher by improved sales of the Model S sedan and Model X sport-utility vehicle, a reduction in spending and a boost from selling pollution tax credits to other auto makers.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
Credit: By Ezequiel Minaya
Subject: Automation; Automobile industry
Location: Germany
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Nov 8, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1837005852
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1837005852?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Tesla Buys Automated Production Specialist
Author: Minaya, Ezequiel
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 Nov 2016: B.2.
ProQuest document link
Abstract:
Electric-car maker Tesla Motors Inc. said Tuesday that it reached a deal to acquire Grohmann Engineering of Germany as part of its effort to boost production to 500,000 cars a year by 2018 and expand its German footprint.
Full text: Electric-car maker Tesla Motors Inc. said Tuesday that it reached a deal to acquire Grohmann Engineering of Germany as part of its effort to boost production to 500,000 cars a year by 2018 and expand its German footprint.
Terms weren't disclosed.
After the deal closes, the engineering company, which is based in Prum, will be renamed Tesla Grohmann Automation and will be the foundation for Tesla Advanced Automation Germany.
The deal is expected to close in early 2017, pending regulatory approval. Tesla described Grohmann as a leader in "highly automated methods of manufacturing," and said the acquisition brings "a world-class team and unique expertise in-house."
The move is also a step toward Tesla founder Elon Musk's ambition to eventually compete with mass-market rivals. Grohmann will serve as the headquarters for Tesla Advanced Automation Germany -- with other locations to follow -- as Tesla plans to add more than 1,000 German engineering and technician jobs over the next two years, the auto maker said.
Credit: By Ezequiel Minaya
Subject: Automobile industry; Acquisitions & mergers
Location: Germany
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2016
Publication date: Nov 9, 2 016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1837156822
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1837156822?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
SolarCity Reports a Loss; Results beat expectations ahead of vote on planned merger with Tesla
Author: Sweet, Cassandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Nov 2016: n/a.
ProQuest document link
Abstract:
SolarCity Corp. reported a third-quarter loss of $225.3 million on sales of just $201 million, eight days before shareholders vote on its planned merger with Tesla Motors Inc. The San Mateo, Calif.-based solar panel-installer narrowly beat analyst expectations, and the financial results were slightly better than the same period of last year when the company posted a loss of $234.3 million on $114 million in revenue.
Full text: SolarCity Corp. reported a third-quarter loss of $225.3 million on sales of just $201 million, eight days before shareholders vote on its planned merger with Tesla Motors Inc.
The San Mateo, Calif.-based solar panel-installer narrowly beat analyst expectations, and the financial results were slightly better than the same period of last year when the company posted a loss of $234.3 million on $114 million in revenue.
Shares of SolarCity traded 0.6% higher after hours around $20.12, after closing down 4% on Wednesday. Many solar energy stocks tumbled after news broke that Republican nominee Donald Trump was elected president. Mr. Trump has repeatedly said he wants to repeal federal tax subsidies for renewable energy.
SolarCity installed 187 megawatts of solar panels during the third quarter, down from 256 megawatts installed in the same quarter of 2015. At the same time, operating expenses rose 19% to $258 million.
Elon Musk, who is chairman of both SolarCity and Tesla, said earlier this month that SolarCity would add more than $500 million of cash to Tesla's balance sheet, and that the solar panel installer would contribute more than $1 billion in revenue next year.
Analysts surveyed by FactSet expect SolarCity to report 2016 sales of $694 million, rising to $939 million in 2017.
The company plans to start building a new type of solar roofing product next year in conjunction with Tesla at a factory in Buffalo, N.Y., but didn't offer any new details about how it would finance the operation. The product is part of Mr. Musk's vision for how the two companies' combination would result in an integrated system of solar panels, wall-mounted batteries and electric cars.
SolarCity has an agreement with state officials to spend $5 billion over 10 years at the factory, and the state is spending $750 million on construction and equipment for the project.
SolarCity said it wouldn't hold a conference call with investors and analysts to discuss results this week, pending the outcome of the shareholder vote set for Nov. 17.
Write to Cassandra Sweet at cassandra.sweet@wsj.com
Credit: By Cassandra Sweet
Subject: Financial performance; Alternative energy sources; Losses; Shareholder voting; Photovoltaic cells
People: Musk, Elon Trump, Donald J
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Nov 9, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1837441018
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1837441018?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
SolarCity Could Give Tesla Too Much Sun; SolarCity's third-quarter results highlight a major risk for Tesla Motors shareholders
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Nov 2016: n/a.
ProQuest document link
Abstract:
SolarCity's latest loss came despite a decision to extend the assumed useful life of installed solar panels to 35 years from 30 starting July 1.
Full text: Election season isn't over quite yet.
The outcome of Tesla Motors' proposed acquisition of SolarCity will be known next week. SolarCity's third-quarter results , and the way the company flattered the numbers, shouldn't reassure Tesla stockholders that the deal is a wise one.
The solar-roofing company reported a net loss of $225 million on sales of $200 million. SolarCity has reported a loss on an adjusted basis in every quarter since 2013, according to FactSet. SolarCity's cost per installed watt increased from a year ago, while the value per watt accruing to the company has dropped. Meanwhile, SolarCity cut its guidance for total panel installations for the third time this year.
SolarCity's latest loss came despite a decision to extend the assumed useful life of installed solar panels to 35 years from 30 starting July 1. The new assumption helps flatter profitability by reducing depreciation expense. SolarCity changed the useful life after commissioning a new engineering study which concluded panels will last longer than previously expected. But since these panels are a relatively new product, actual experience is scant.
Even positives in the report come with big caveats: SolarCity reported a cash balance of $259 million, a $113 million increase from the second quarter. But that increase came in part from new debt, rather than traditional cash-flow generation. Debt issuance of more than $200 million, net of repayments, took place in the quarter.
Worse, a good chunk of that debt was bought by SolarCity executives and board members, rather than the general public. Chairman Elon Musk, CEO Lyndon Rive and technology chief Peter Rive bought a combined $100 million of a $124 million solar-bond issue during the quarter.
SolarCity will be paying a steep price for that funding--those bonds carry an annual 6.5% interest rate and mature in 18 months.
SolarCity's results are the last major piece of information before the results of the shareholder vote become known on Nov. 17. If shareholders approve, Tesla will acquire each SolarCity share outstanding in exchange for 0.11 share of Tesla.
The deal has attracted controversy : One independent shareholder advisory service, Institutional Shareholder Services, recommended the deal be approved, citing the transaction as a "necessary step toward [Tesla's] goal of being an integrated sustainable energy company." But rival firm Glass Lewis said the deal "mostly amounts to a thinly veiled bailout plan." Mr. Musk is the chairman and largest shareholder of both companies.
Regardless of motivation, Tesla will have to scramble to meet the promises it has made to its shareholders. Meeting its production goal of 500,000 cars by 2018, up from about 80,000 this year, is still the key to Tesla justifying its sky high stock valuation. Completing that task will require significant capital to get the Model 3 mass market sedan into production on time.
Bringing an unprofitable and heavily indebted SolarCity into the fold will only increase the odds that Tesla investors eventually get scorched.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Net losses; Useful life; Stockholders
People: Rive, Peter Rive, Lyndon Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Nov 13, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1838596075
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1838596075?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permis sion.
Last updated: 2017-11-23
Database: The Wall Street Journal
LeEco Funding Scare Casts Doubt on Grand Vision; Billionaire Jia Yueting's pursuit of a conglomerate to challenge Apple, Netflix, Amazon.com and Tesla may be hitting a wall
Author: Li, Yuan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Nov 2016: n/a.
ProQuest document link
Abstract:
The founder of LeEco Holdings appeared to defy gravity as he built a second-tier video site into a conglomerate spanning smartphones, TVs , electric cars , cloud computing and a film studio, capped off in August by a $2 billion deal to buy U.S. TV maker Vizio Inc. But a week ago, on Nov. 6, Mr. Jia, 43, told employees that his grand plans--a multibillion-dollar spending spree largely funded by debt and venture money--may have to come down to Earth.
Full text: HONG KONG--For six years, Chinese billionaire Jia Yueting shrugged off skeptics as he pursued his vision of a business that could challenge Apple Inc., Netflix Inc., Amazon.com and Tesla Motors Inc. all at once.
The founder of LeEco Holdings appeared to defy gravity as he built a second-tier video site into a conglomerate spanning smartphones, TVs , electric cars , cloud computing and a film studio, capped off in August by a
$2 billion deal to buy U.S. TV maker Vizio Inc.
But a week ago, on Nov. 6, Mr. Jia, 43, told employees that his grand plans--a multibillion-dollar spending spree largely funded by debt and venture money--may have to come down to Earth. In a 5,500-word letter, he said the company expanded too quickly and faces a cash crunch.
"As we sped ahead blindfolded, and expanded our business by burning cash, we got overstretched in our global strategy," he wrote.
Only one of LeEco's business units--the Shenzhen-listed Leshi Internet Information & Technology Corp., which runs its video site--is profitable, according to the company.
Any further financial strain for LeEco would have broad implications in China and beyond. With its ability to raise new funds in doubt, investors will be watching closely whether it can close the Vizio deal.
Mr. Jia said in an interview the deal won't be affected and he expects future acquisitions in the U.S. The letter, he said, wasn't meant to spook investors but rather to demonstrate his determination to carry on with his vision despite difficulties.
Visio said the deal is still in progress but declined to comment.
As China's economy slowed in the past few years, LeEco was one of many mobile-internet companies that drew investors seeking assets that could fight the tide. But cooling sentiment toward tech startups this year has made attracting money more difficult.
"The market capitalization and valuation of LeEco's various businesses don't make sense under the current market conditions," said Zhang Yifan, managing director at Shenzhen Commando Capital Asset Management Co., who doesn't own shares in the company.
Mr. Jia has employed unorthodox methods to fund his dream .
At the end of 2015, he pledged 85% of his Leshi shares--nearly a one-third stake--as collateral for personal credit lines, according to the company's annual report. He lent the proceeds to new ventures such as the smartphone and car makers, the company says.
LeEco declined to disclose how much Mr. Jia has raised this way. Over the years, it said, Mr. Jia has had an average of about 70% of his holdings in Leshi pledged as collateral for loans.
Also last year, Mr. Jia sold over two billion yuan ($293 million) in Leshi shares and lent the proceeds back to the video site interest-free.
Leshi shares slid nearly 5% on Nov. 7, after Mr. Jia's letter confirmed the previous week's rumors that the company was facing a cash crunch. But the shares steadied for the remainder of the week to close at 38.38 yuan, or 1.4% higher than the Nov. 7 closing price, but still 35% lower than the start of the year.
A big enough slide could trigger a margin call, forcing Mr. Jia either to sell the shares or back the loan with more collateral. LeEco declined to comment, having said in May that the financial arrangement of the pledged shares is very safe and that it has contingency plans.
Also on Nov. 7, shares of Hong Kong-listed smartphone maker Coolpad Group Ltd., of which Mr. Jia is chairman, fell as much as 25% to their lowest level since February 2013 after Mr. Jia's letter caused concerns about LeEco's solvency. Coolpad prices were down a further 5% on Friday. Coolpad declined to comment.
Mr. Jia and other top executives held a Leshi shareholders' meeting on Wednesday to make the case that the resource-draining risk of LeEco's global expansion plan is one worth taking.
Founded in 2004 in Beijing, LeEco was little-known until a share-price rally early last year made Leshi one of the most valuable tech stocks listed in China.
Mr. Jia's dream of building a hardware-content ecosystem--his premise is that by offering hardware at a low price, or even free, he can get consumers to pay to subscribe to content--started to get attention.
LeEco has raised at least $3.15 billion for new businesses in the past couple of years, according to company announcements, while Mr. Jia has spent or pledged to spend more than $5 billion on deals.
With 5,000 new employees added just this year, the company's high-rise headquarters on Beijing's east side is bulging, with some staff members even having to share desks.
Mr. Jia makes no secret of the perpetual capital shortage. A former executive who left in the summer said he had gone on deal negotiations in the U.S. without knowing whether there would be funding.
Mr. Jia's letter to employees included a rhetorical question: Would the company be devoured by the "giant waves" of the cash shortage or would it "boil the ocean" with the fire of his strategy. His answer: "We'll be progressing in disruption and pain."
Write to Li Yuan at li.yuan@wsj.com
Credit: By Li Yuan
Subject: Smartphones; Expansion; Executives; Capital assets; Lines of credit
Location: United States--US China
Company / organization: Name: Vizio; NAICS: 423460, 334310; Name: Netflix Inc; NAICS: 532230, 512120, 518210; Name: Apple Inc; NAICS: 511210, 334111, 334220
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Nov 13, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1838615033
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1838615033?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Jaguar Shows Its Concept for a Luxury Electric SUV; British sports-car maker plans to take aim at the Tesla Model X in two years hence
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Nov 2016: n/a.
ProQuest document link
Abstract:
Luxury car maker Jaguar Land Rover plans to deliver an electric sport-utility vehicle in 2018, taking a shot at Tesla Motors Inc.'s Model X and other automotive rivals.
Full text: Luxury car maker Jaguar Land Rover plans to deliver an electric sport-utility vehicle in 2018, taking a shot at Tesla Motors Inc.'s Model X and other automotive rivals.
Jaguar Land Rover on Monday unveiled its Jaguar I-Pace SUV concept ahead of the Los Angeles Auto Show that begins this week. Its electric SUV will be first of several such vehicles planned by the British brand owned by India's Tata Motors Ltd.
Other luxury car makers are close behind. Audi AG plans to market an electric SUV in 2018, it has said. Daimler AG's Mercedes-Benz is gearing up to show an electric, midsize SUV in 2019, and BMW AG aims to offer a battery-powered X3 SUV in 2020. They are moving in part in response to tougher emissions standards in the U.S. and Europe.
Jaguar Land Rover is on the trail of Tesla's Model X, which went on sale last year and is part of Chief Executive Elon Musk's plan to boost the Palo Alto, Calif., company's electric-vehicle production to 500,000 vehicles in 2018, from about 50,000 in 2015.
The number of all-electric models available in the U.S. is expected to triple to 19 by 2020, according to credit-rating firm Moody's Investors Service. Sales of small electric sedans, such as Nissan Motor Co.'s Leaf and BMW's i3, have been disappointing so far.
Overall sales of high-end SUVs have been bright spot in the U.S. auto industry, garnering a 52% share of the overall U.S. luxury car market through October this year, up from 40% of sales in 2013, according to data provider LMC Automotive. Auto makers are eager to sell SUVs because they command higher prices than smaller cars, and they're increasingly popular with luxury car buyers. Jaguar didn't disclose a price for the I-Pace.
"We don't see the trend toward SUVs going away anytime soon," said Jeff Schuster, an analyst at LMC Automotive, in an interview.
Visitors to the Los Angeles Auto Show, which opens to the public on Friday, will find several new electric offerings. General Motors Co. is soon to bring its all-electric Chevrolet Bolt to buyers in coming weeks, and Fiat Chrysler Automobiles NV is rolling out a plug-in hybrid version of its Pacifica minivan.
"Historically, the notion has been that you need to show people that you're driving an electric car," said Joe Eberhardt, Jaguar Land Rover's U.S. chief. "That doesn't mean it has to be small and it has to be quirky looking. What I think we're trying to prove here is that you can have a great-looking...SUV that's all-electric."
The I-Pace reflects the emphasis on size and style in an all-electric model. It will have an 90-kilowatt-hour battery designed to give the vehicle a range of 220 miles on a charge, the company said.
Jaguar Land Rover's bet on an electric SUV marks a remarkable turn following Tata's $2.5 billion acquisition in 2008 of the brands from Ford Motor Co., which was shedding assets to avoid bankruptcy. That year, the British division delivered almost 45,000 vehicles in the U.S., down from a record of 102,000 in 2002, according to market researcher Autodata Corp.Jaguar Land Rover under Tata Motors has focused on its core products, including the Land Rover Discovery Spot SUV and the Jaguar XF sedan. Its U.S. sales are up 23% this year through October, to 83,391 vehicles. The market as a whole, meanwhile, has remained flat.
Jaguar's sales growth likely will slow in 2017, Mr. Eberhardt acknowledged. But he is optimistic demand will continue to expand in the U.S. helped by the XE sedan and F-Pace SUV, which were introduced midyear, and updates next year of Range Rover and Range Rover Sport. "We are in the middle of a dramatic turnaround," he said.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related Reading
* Tata Motors Posts Lower Than Expected Profit
* Land Rover Unveils New Discovery for the Digital Age
* Jaguar Land Rover Pulls Down Profit at India's Tata Motors
Credit: By Tim Higgins
Subject: Automobile industry; Automobile sales; Luxury automobiles; Vehicles; Rating services; Sport utility vehicles
Location: India United States--US
People: Musk, Elon
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Tata Motors Ltd; NAICS: 336111; Name: Fiat Chrysler Automobiles NV; NAICS: 336111; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: LMC Automotive; NAICS: 541910; Name: Nissan Motor Co Ltd; NAICS: 336111; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Audi AG; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999; Name: Daimler AG; NAICS: 336111
Product name: Jaguar XF, Land Rover Discovery
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Nov 15, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1838912326
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1838912326?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Donald Trump and Subsidies: New Wrinkle for Elon Musk's Tesla-SolarCity Plans; As shareholders vote on merger, outlook is clouded by potential changes to tax credits and rebates for green power
Author: Sweet, Cassandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Nov 2016: n/a.
ProQuest document link
Abstract:
California and nine other states offer the credits to makers of electric cars. Since first proposing to combine Tesla and SolarCity in June, Mr. Musk has faced questions over whether the amalgamation in effect amounted to a bailout of the struggling home solar equipment installer and whether melding two money-losing entities made sense.
Full text: Shareholders set to vote on Thursday over the merger of Tesla Motors Inc. and SolarCity Corp. have a new dilemma to consider: How Donald Trump's election will affect subsidies for green power.
The electric-car and rooftop-solar companies controlled by Elon Musk rely on federal clean-energy tax credits and rebates to drive down the costs of what they sell.
Buyers of Tesla cars can obtain a $7,500 federal tax credit for purchasing an all-electric vehicle, for example, while SolarCity customers are eligible for federal tax credits equal to 30% of the price of their solar energy system.
Mr. Trump's election, combined with Republican control of Congress, is likely to lead to federal policies that favor conventional energy over renewables, some analysts predict.
And current electric-car and solar subsidies are scheduled to decline over time and are unlikely to be renewed or extended under the Trump administration, said Jeffrey Osborne, an analyst at Cowen & Co. "Now, with the potential for the tax credits to go away, [SolarCity has] to accelerate their work on cost reductions and [reaching] grid parity," Mr. Osborne said.
Mr. Trump has vowed to repeal the Clean Power Plan, the Obama administration's main climate-change initiative that calls for a 32% reduction in power-plant carbon emissions from 2005 levels by 2030. The plan, which is on hold pending a federal court challenge by some coal companies and states, was widely expected to boost solar and wind power development nationwide.
Under the current federal electric-vehicle subsidy, the $7,500 federal tax credit for buying an electric vehicle is set to drop by half to $3,750 once an auto maker, such as Tesla, sells its 200,000th electric car in the U.S.
Tesla doesn't release data for its U.S. car sales. But it has delivered 160,000 vehicles world-wide to date, including more than 54,000 this year. Tesla said last May it planned to deliver between 80,000 and 90,000 cars this year.
The reduction of the tax credit is unlikely to damp consumer demand for Tesla's vehicles, according to the company.
Federal solar investment-tax credits that buyers of solar panels receive are scheduled to drop to 26% of the sales price in 2020 from 30% now. In 2022, they are set to fall to 10% for commercial customers and zero for residential customers. SolarCity said the solar industry is focused on reducing costs to offset the scheduled decline in incentives.
In addition to federal subsidies, Tesla and SolarCity also benefit from state-level programs to boost clean energy sources that are not directly affected by changes in Washington . Tesla for example recently reported that it eked out a third quarter profit of $22 million, thanks in part to receiving $139 million from zero-emission vehicle credits it obtained and sold to other auto manufacturers. California and nine other states offer the credits to makers of electric cars.
Since first proposing to combine Tesla and SolarCity in June, Mr. Musk has faced questions over whether the amalgamation in effect amounted to a bailout of the struggling home solar equipment installer and whether melding two money-losing entities made sense.
Tesla lost $889 million in 2015 and $294 million the previous year. The company's $22 million third-quarter profit compared with a loss of $230 million a year earlier. Still, analysts polled by FactSet are expecting the company to post another loss for all of this year.
SolarCity lost $769 million in 2015, after losing $375 million the year before. Analysts expect the company to post another net loss for this year. The company posted a third-quarter net loss of $225 million, 4% less from a year earlier and less than analysts had expected. However, it also cut its forecast for the volume of panels it expects to install this year to the equivalent of 900 megawatts from 1,250 megawatts earlier this year.
Shareholders will decide the merger's outcome in a meeting at 1 p.m. Pacific Time or 4 p.m. Eastern on Thursday in Fremont, Calif.
Cowen & Co.'s Mr. Osborne expects Tesla and SolarCity shareholders to approve the deal.
Two shareholder proxy services have differing opinions about the proposed merger. Institutional Shareholder Services Inc. endorsed it earlier this month, saying it was needed to create an integrated sustainable energy company. But rival firm Glass Lewis & Co., urged shareholders to vote no, calling it a "thinly veiled bailout" for SolarCity. Mr. Musk is the chairman and largest shareholder of both companies.
Shares of Tesla closed Wednesday at $183.93, off 23% this year. SolarCity shares closed at $19.83, down 61% this year.
Write to Cassandra Sweet at cassandra.sweet@wsj.com
Related Reading
* Car Makers Gear Up for Electric Push (Nov. 13)
* SolarCity Reports a Loss (Nov. 9)
* Tesla Acquires German Engineering Firm in Move to Boost Production (Nov. 8)
* Proxy Service ISS Endorses Proposed Tesla, SolarCity Deal (Nov. 4)
* Tesla Sales Need a Recharge (Nov. 1)
* Tesla Generates a Profit (Oct. 26)
Seeing Green
Current federal clean-energy tax credits on Tesla and SolarCity products
Tesla:
* Tax Credit: Plug-In Electric Drive Vehicle Credit
* Value: $7,500 per car
* Scheduled Phase Out: Drops to $3,750 two quarters after 200,000 cars are sold in the U.S., then $1,875 two quarters later, and zero two quarters after that.
SolarCity:
* Tax Credit: Solar Investment Tax Credit
* Value: 30% of the value of each solar system
* Scheduled Phase Out: Drops to 26% in 2020, 22% in 2021, then 10% in 2022 for commercial projects and zero for residential projects.
Credit: By Cassandra Sweet
Subject: Tax credits; Net losses; Electric vehicles; Corporate profits; Subsidies; Alternative energy sources; Stockholders
Location: California
Company / organization: Name: Congress; NAICS: 921120; Name: Cowen & Co LLC; NAICS: 523110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Nov 17, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1840663658
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1840663658?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla, SolarCity Merger Gets Shareholder Approval; Elon Musk aims to combine the two firms to create an integrated clean-energy company
Author: Higgins, Tim; Sweet, Cassandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Nov 2016: n/a.
ProQuest document link
Abstract:
Shares of Tesla rose 1.5% to $191.50 after hours, while SolarCity shares rose 2.5% to $20.90. Since June, when Mr. Musk first proposed the merger, he has campaigned with typical showmanship to persuade shareholders in both companies to support the plan.
Full text: Shareholders of Tesla Motors Inc. and SolarCity Corp. approved Tesla's $2.1 billion all-stock offer to merge and create one company headed by Elon Musk that would sell emissions-free cars and solar panels that help power them.
In combining Tesla and SolarCity , Mr. Musk, who is chief executive officer of Tesla as well as chairman and largest shareholder of both companies, aims to combine them to create an integrated clean-energy company. Some critics have characterized the merger proposal as a bailout by Tesla of SolarCity, which has struggled financially. But proponents view the combination as a logical next step in expanding Tesla's clean-energy offerings.
The combined companies would target homeowners in a bid to sell Tesla's all-electric vehicles, solar panels and batteries, enabling customers to power their cars and homes with clean energy.
Shares of Tesla rose 1.5% to $191.50 after hours, while SolarCity shares rose 2.5% to $20.90.
Since June, when Mr. Musk first proposed the merger, he has campaigned with typical showmanship to persuade shareholders in both companies to support the plan. Last month, he unveiled roof solar tiles that the combined company would sell. The shingle-sized solar panels, which aren't yet available, are designed to look like traditional roofing materials in a variety of styles--an effort to infuse drab solar equipment with the high design and visual appeal that has led to brisk sales of his high-end luxury electric cars.
He has argued that SolarCity wouldn't weigh on Tesla's bottom line after it repositions itself to sell more of its panels for cash, rather than owning them and leasing them to homeowners as the company mostly has done so far. He predicted earlier this month that SolarCity, which has been run by his cousins Lyndon and Peter Rive, would generate $1 billion in revenue in 2017 compared with about $400 million in 2015.
Analysts surveyed by FactSet estimate that SolarCity is on track to report $711 million in revenue in 2016.
Tesla posted a surprise third-quarter profit of $22 million in October following net losses of $889 million in 2015 and $294 million the previous year.
SolarCity posted a third-quarter net loss of $225.3 million following full-year losses of $769 million in 2015 and $375 million the year before.
The merger vote comes as Tesla prepares to roll out a new sedan next year , the $35,000 Model 3, which Mr. Musk believes will help spur sales at an ambitious clip. He aims to boost production to 500,000 in 2018 from about 50,000 last year.
The plan to bring out the Model 3 doesn't involve fundraising, Mr. Musk told analysts in late October amid confusion over whether Tesla would tap capital or debt markets this year. The company had said it would seek further funding in filings with the Securities and Exchange Commission. But in early October, Mr. Musk posted a message on Twitter reversing that position and saying the company wouldn't raise more money this year.
Mr. Musk left open the possibility that the combined companies might raise cash next year.
The vote wasn't a foregone conclusion. Institutional Shareholder Services Inc., a shareholder proxy service, endorsed the merger , urging approval and telling Tesla shareholders that the company was "paying a low-to-no premium" for SolarCity. However, Glass, Lewis & Co., a rival proxy service, recommended that Tesla shareholders vote against the deal, calling it a "thinly veiled bailout plan."
Write to Tim Higgins at Tim.Higgins@WSJ.com and Cassandra Sweet at cassandra.sweet@wsj.com
Credit: By Tim Higgins and Cassandra Sweet
Subject: Acquisitions & mergers; Bailouts; Net losses; Clean technology; Electric vehicles; Stockholders
People: Rive, Peter
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Nov 17, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1840829373
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1840829373?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla, SolarCity Merger Gets Shareholder Approval; Elon Musk aims to combine the two firms to create an integrated clean-energy company
Author: Higgins, Tim; Sweet, Cassandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Nov 2016: n/a.
ProQuest document link
Abstract:
Shares of both companies rose fractionally in after-hours trading. Since June, when Mr. Musk first proposed the merger, he has campaigned with typical showmanship to persuade shareholders in both companies to support the plan. Tesla customers, for instance, can obtain a $7,500 federal tax credit for purchasing an all-electric vehicle, while SolarCity customers are eligible for federal tax credits equal to 30% of the price of their solar energy system.
Full text: Corrections & Amplifications:
An earlier version of the chart accompanying this article misstated the stock prices.
Shareholders of Tesla Motors Inc. and SolarCity Corp. approved Tesla's $2.1 billion all-stock offer to merge and create one company headed by Elon Musk that would sell emissions-free cars and rooftop solar panels that power them.
"Your faith will be rewarded," Mr. Musk told Tesla investors on Thursday after the company announced shareholders overwhelmingly approved the deal.
Tesla announced that the merger was approved by 85% of Tesla shareholders, excluding Mr. Musk and other affiliated shareholders. SolarCity didn't disclose the percentage of its shareholders voting.
The transaction will be completed "in the coming days," Tesla said in a statement.
In combining Tesla and SolarCity , Mr. Musk, who is chief executive officer of Tesla as well as chairman and the largest shareholder of both companies, aims to combine them to create an integrated clean-energy company.
The combined companies will target homeowners in a bid to sell Tesla's all-electric vehicles, solar panels and batteries, enabling customers to power their cars and homes with clean energy.
Shares of both companies rose fractionally in after-hours trading.
Since June, when Mr. Musk first proposed the merger, he has campaigned with typical showmanship to persuade shareholders in both companies to support the plan.
Last month, he unveiled roof solar tiles that the combined company would sell. The shingle-size solar panels, which aren't yet available, are designed to look like traditional roofing materials in a variety of styles--an effort to infuse drab solar equipment with the high design and visual appeal that has led to brisk sales of his high-end luxury electric cars.
After meeting with SolarCity engineers, Mr. Musk on Thursday said he believes the cost of a roof covered with the forthcoming tiles may be less than that of a traditional roof.
"The basic proposition will be: Would you like a roof that looks better than a normal roof, lasts twice as long, costs less and, by the way, generates electricity?" he said. "That's looking really promising, and I think there's even room for improvement beyond there."
Some critics have characterized the merger as a bailout by Tesla of SolarCity, which has struggled financially. But Mr. Musk has argued that SolarCity wouldn't weigh on Tesla's bottom line after it repositions itself to sell more of its panels for cash, rather than owning them and leasing them to homeowners as the company mostly has done so far.
He predicted earlier this month that SolarCity, which has been run by his cousins Lyndon and Peter Rive, would generate $1 billion in revenue in 2017 compared with about $400 million in 2015. Analysts surveyed by FactSet estimate that SolarCity is on track to report $711 million in revenue in 2016.
Tesla posted a surprise third-quarter profit of $22 million in October following net losses of $889 million in 2015 and $294 million the previous year. SolarCity posted a third-quarter net loss of $225.3 million following full-year losses of $769 million in 2015 and $375 million the year before.
The merger vote comes as Tesla prepares to roll out a new sedan next year , the $35,000 Model 3, which Mr. Musk believes will help spur sales at an ambitious clip. He aims to boost production to 500,000 in 2018 from about 50,000 last year.
The plan to bring out the Model 3 doesn't involve fundraising, Mr. Musk told analysts in late October amid confusion about whether Tesla would tap capital or debt markets this year.
The company had said it would seek further funding in filings with the Securities and Exchange Commission. But in early October, Mr. Musk posted a message on Twitter reversing that position and saying the company wouldn't raise more money this year.
Mr. Musk left open the possibility that the combined companies might raise cash next year.
A further challenge may arise with the election of U.S. president-elect Donald Trump and a Republican-controlled Congress, forces likely to favor conventional energy over renewables, some analysts predict. Both companies benefit from federal incentives.
Tesla customers, for instance, can obtain a $7,500 federal tax credit for purchasing an all-electric vehicle, while SolarCity customers are eligible for federal tax credits equal to 30% of the price of their solar energy system. Both incentives in their current form are designed to wane over time. (Tesla and SolarCity also benefit from state-level programs to boost clean energy sources that aren't directly affected by changes in Washington.)
Mr. Musk argued that renewables aren't the only subsidized energy sources; fossil fuels also benefit from government largesse.
"The great irony is, if all the incentives went to zero, Tesla's competitiveness would improve dramatically," he said.
Institutional Shareholder Services Inc., a shareholder proxy service, endorsed the merger , urging approval and telling Tesla shareholders that the company was "paying a low-to-no premium" for SolarCity.
However, Glass, Lewis & Co., a rival proxy service, recommended that Tesla shareholders vote against the deal, calling it a "thinly veiled bailout plan."
Write to Tim Higgins at Tim.Higgins@WSJ.com and Cassandra Sweet at cassandra.sweet@wsj.com
Credit: By Tim Higgins and Cassandra Sweet
Subject: Shareholder voting; Net losses; Electric vehicles; Stockholders; Financial performance
People: Rive, Peter
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Nov 18, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1840886477
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1840886477?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla, SolarCity Merger Approved
Author: Higgins, Tim; Sweet, Cassandra
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 Nov 2016: B.1.
ProQuest document link
Abstract:
The combined companies will target homeowners in a bid to sell Tesla's all-electric vehicles, solar panels and batteries, enabling customers to power their cars and homes with clean energy. Since June, when Mr. Musk first proposed the merger, he has campaigned with typical showmanship to persuade shareholders in both companies to support the plan.
Full text: Shareholders of Tesla Motors Inc. and SolarCity Corp. approved Tesla's $2.1 billion all-stock offer to merge and create one company headed by Elon Musk that would sell emissions-free cars and rooftop solar panels that power them.
"Your faith will be rewarded," Mr. Musk told Tesla investors on Thursday after the company announced shareholders overwhelmingly approved the deal.
Tesla announced that the merger was approved by 85% of Tesla shareholders, excluding Mr. Musk and other affiliated shareholders. SolarCity didn't disclose the percentage of its shareholders voting.
The transaction will be completed "in the coming days," Tesla said in a statement.
In combining Tesla and SolarCity, Mr. Musk, who is chief executive officer of Tesla as well as chairman and the largest shareholder of both companies, aims to combine them to create an integrated clean-energy company.
The combined companies will target homeowners in a bid to sell Tesla's all-electric vehicles, solar panels and batteries, enabling customers to power their cars and homes with clean energy.
Since June, when Mr. Musk first proposed the merger, he has campaigned with typical showmanship to persuade shareholders in both companies to support the plan.
Last month, he unveiled roof solar tiles that the combined company would sell. The shingle-size solar panels, which aren't yet available, are designed to look like traditional roofing materials in a variety of styles.
After meeting with SolarCity engineers, Mr. Musk on Thursday said he believes the cost of a roof covered with the forthcoming tiles may be less than that of a traditional roof.
"The basic proposition will be: Would you like a roof that looks better than a normal roof, lasts twice as long, costs less and, by the way, generates electricity?" he said. "That's looking really promising, and I think there's even room for improvement beyond there."
Some critics have characterized the merger as a bailout by Tesla of SolarCity, which has struggled financially. But Mr. Musk has argued that SolarCity wouldn't weigh on Tesla's bottom line after it repositions itself to sell more of its panels for cash, rather than owning them and leasing them to homeowners as the company mostly has done so far.
He predicted earlier this month that SolarCity, which has been run by his cousins Lyndon and Peter Rive, would generate $1 billion in revenue in 2017 compared with about $400 million in 2015. Analysts surveyed by FactSet estimate that SolarCity is on track to report $711 million in revenue in 2016.
Tesla posted a surprise third-quarter profit of $22 million in October. SolarCity posted a third-quarter net loss of $225.3 million.
The merger vote comes as Tesla prepares to roll out a new sedan next year, the $35,000 Model 3, which Mr. Musk believes will help spur sales at an ambitious clip. He aims to boost production to 500,000 in 2018 from about 50,000 last year.
Credit: By Tim Higgins and Cassandra Sweet
Subject: Acquisitions & mergers; Shareholder approval; Financial performance
People: Rive, Peter Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: SolarCity Corp; NAICS: 221114, 238220, 333414
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Nov 18, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1840949257
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1840949257?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Investors Still Need to Watch Their Wallets; To make CEO Musk's ambitions a reality, more capital will soon be needed
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Nov 2016: n/a.
ProQuest document link
Abstract:
[...]Tesla will be issuing about 11 million shares to complete the transaction.
Full text: Tesla Motors has no immediate need to raise equity in the wake of the merger with SolarCity, according to Chief Executive Elon Musk. Investors should still be on watch for dilution.
As expected, Tesla and SolarCity shareholders both voted to approve their planned merger on Thursday. As a result, Tesla will be issuing about 11 million shares to complete the transaction.
That should be the end of dilution for a while, according to Mr. Musk. The Tesla CEO said in October that an equity raise for the combined company won't be necessary before the year is out.
That statement is reasonable, as far as it goes. The two companies combined had about $3.5 billion in cash on the books as of Sept. 30. Tesla generated a surprise $176 million in free cash in the third quarter.
But if Mr. Musk wants to make his ambitions a reality, more capital will soon be needed.
Tesla forecast that it will spend more than $1 billion on capital expenditures in the fourth quarter. That likely isn't the full extent of the funding need . Expanding vehicle deliveries to 500,000 by 2018 from about 80,000 cars this year will require significant further investment.
There may be other demands on cash too. Mr. Musk said Thursday that the new solar roof product, set to be available next year, will probably cost less than a traditional roof, even before electricity savings. That certainly sounds appealing, but achieving that lofty goal and bringing the product to market will likely require still more expenditures.
Meanwhile, Tesla's free cash flow generation isn't likely to continue in the fourth quarter. Tesla achieved positive operating cash flow of $424 million in the third quarter, but accounts payable and accrued liabilities increased by more than $600 million. Increasing payables by that extent is a direct source of cash, but an unsustainable one.
Adding the consistently unprofitable SolarCity to the mix won't help. An inability to consistently generate cash from its current business means outside funding will be needed.
Meanwhile, the current cash balance looks a lot smaller when viewed in the context of liabilities. The combined company had total debt of about $6 billion on its balance sheet as of Sept. 30.
Tesla could always change its plans. None of these projects necessarily have to happen, and Tesla has changed its outlook on capital spending and funding needs on multiple occasions this year.
But shareholders enjoy its lofty valuation based on what Tesla could become, rather than what the business does today. That would likely change if Tesla became less ambitious.
The company's serial equity issuance and stock option granting has pushed diluted shares outstanding above 157 million, up from 92 million in 2010, according to FactSet. Look for that number to increase further in the new year.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Acquisitions & mergers; Equity; Stockholders; Funding
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Nov 18, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1841195311
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1841195311?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Motors Closes SolarCity Acquisition; CEO Elon Musk to begin integrating the solar-panel business into the auto maker
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Nov 2016: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Motors Inc. on Monday said it closed the acquisition of SolarCity Corp., paving the way for Chief Executive Elon Musk to begin integrating the solar-panel business into the auto maker to create an integrated clean-energy company.
Shareholders of both companies approved the merger last week.
Mr. Musk, who was chairman of SolarCity and the largest shareholder of both companies, wants to target customers with solar panels and batteries to let them power their homes and electric cars with clean energy.
The challenge of combining the companies comes as Tesla next year begins selling the new Model 3 sedan, a vehicle that could help the auto maker boost production to 500,000 in 2018 from about 50,000 last year.
Write to Tim Higgins at Tim.Higgins@wsj.com
Credit: By Tim Higgins
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Nov 21, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1841806066
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1841806066?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
You Know What Kids Need Today? Their Own Teslas; Toy makers offer a fleet of junior-size, battery-operated luxury car replicas
Author: Byron, Ellen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Nov 2016: n/a.
ProQuest document link
Abstract:
Sales of battery-powered ride-on cars overall in the U.S. reached $430 million last year and so far this year are up 7.1%, said Juli Lennett, U.S. toy industry analyst for market researcher NPD Group.
Full text: Randy Rullamas, a real-estate agent in Fremont, Calif., bought himself a Tesla last year, and then another for his wife. He thought he might as well get a matching one for his sons, 8 and 3, too.
Theirs is pint-size, but it has almost as many bells and whistles as his Model S , with the same sleek lines, identical paint job and matching horn beep.
His version has all-black detailing, so Mr. Rullamas spent about a week covering the chrome trim and emblems on his sons' toy car with black vinyl to match. "It's called a 'chrome delete,' or a 'blackout,' " he said.
Sports cars, Jeeps, trucks and carriages for youngsters are expected to be among the top-selling holiday gifts this year. Lately these battery-powered vehicles more closely replicate adult versions--especially luxury models--with working head and taillights, stereos, rubber tires and leather seats.
"If you can't buy your own Maserati, you can buy one for your kid," said Nancy Horvath, a buyer for the children's division of Neiman Marcus Group, which this year included a 4-foot-long white Maserati GranCabrio among its holiday gifts. The $395 Italian sports car includes three forward speeds and a reverse gear, an MP-3 jack and a low-battery indicator "so you're not at the wrong end of the block when it gives out," said Ms. Horvath.
The mini Tesla starts at $499. Mr. Rullamas bought a dark gray mini Model S for his sons, Ryder and Rockwell, the same color and model as his own. The toy car is usually parked in the living room next to the couch--Ryder likes to drive around the house with Rockwell on his lap. "Within a short period of time Ryder was able to do a three-point turn, parallel park and drive in reverse," said Mr. Rullamas. "He has scuffed the walls a couple of times, I'll be honest, but we touch it up."
He said he hops on his bike to keep up with the children outdoors. A locked speed switch lets parents choose whether the car reaches 3 miles an hour or 6.
Radio Flyer Inc., which produces the car under a license agreement with Tesla, worked with Tesla's designers to replicate the real car. "A lot of battery-operated cars on the market tend to look like a cartoon version of the big car, and that was something we absolutely didn't want to happen," said Robert Pasin, Radio Flyer's chief wagon officer.
Parents are sold on that cool factor--especially the $50 mini Tesla car cover. "It's really the thing that puts you over the top," said Mr. Pasin.
For Christmas, Mr. Rullamas is considering buying his 3-year-old a battery-powered John Deere tractor to ride. "He gravitates toward construction toys, but it will be a lot slower than his Model S."
Sales at Big Toys Green Country are up about 70% in October and November over the year before, thanks in part to one of the company's best sellers, the Chevrolet Colorado Style. The $489 four-wheel drive truck is "perfect for ages 1-5" and includes working doors and tail gate, power steering and rear-spring suspension, said the company, which sells more than 150 vehicle models.
The truck's rechargeable battery lasts 90 minutes. The junior drivers "don't have an attention span long enough to ride in a vehicle for an hour and a half at a time," said Ron Thomas, chief operating officer of the online retailer based in Muskogee, Okla. "The car usually outlasts them."
Toys "R" Us Inc. published a four-page spread of 23 battery-powered vehicles in its holiday gift guide this year, including a Porsche 911, Cadillac Escalade, Ferrari California T and Mercedes ML63.
"A kid driving a replica Porsche is imagining they're on a racetrack, they're not really imagining they're going 5 miles an hour in their garden," said Richard Barry, chief merchandising officer for Toys "R" Us. Parental imagination is tapped, too . "Those cars are out of the reach of many customers, but they can put their kids in the dream car maybe they can't afford," he said.
Sales of battery-powered ride-on cars overall in the U.S. reached $430 million last year and so far this year are up 7.1%, said Juli Lennett, U.S. toy industry analyst for market researcher NPD Group.
Wal-Mart Stores Inc. worked with a manufacturer and Disney for about a year to design a Disney Princess Carriage. The pink $398 vehicle is shaped like Cinderella's pumpkin coach, seats two and includes a heart-shaped steering wheel, four lighted lanterns, purple tread tires and a tiara. "It has little curtains," said Anne Marie Kehoe, vice president of toys for Wal-Mart U.S.
Some stores display a carriage in high-traffic aisles, so children can climb in and parents can photograph them. No one has driven away. "The batteries are generally not charged," Ms. Kehoe said.
Brett Chandler of Wade, N.C., couldn't wait until Christmas to give his 4-year-old daughter, Brooke, her Disney princess carriage. "I was so excited myself that we went ahead and opened it up," he said of his September purchase.
At first, Mr. Chandler, a police officer, restricted his daughter's speed to its slowest setting. "But she's a good driver and experienced now so I let her go on the high speed" he said. "I have to run to make sure she doesn't crash into a mailbox."
Mr. Chandler has posted videos online of his daughter and a friend, dressed in princess gowns, driving through their quiet neighborhood, waving at passersby. He said a battery charge lasts for about 45 minutes. "They would drive it all day if they could," he said.
For Christmas, Mr. Chandler is now contemplating buying his daughter a "Trolls" movie-themed car. His family has space to park it in the garage, next to Brooke's 3-year-old Jeep and her new carriage. "We park our own cars in the driveway," he said.
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Credit: By Ellen Byron
Subject: Automobile industry; Vehicles; Batteries; Toys
Company / organization: Name: Maserati; NAICS: 336111
Product name: Cadillac Escalade, Chevrolet Colorado, Porsche 911
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Nov 27, 2016
Section: Page One
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1843624586
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1843624586?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Rejoice, Kids! Pretty Soon You Will Have Your Own Teslas --- Toy makers offer a fleet of junior-size, battery-operated luxury car replicas
Author: Byron, Ellen
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 Nov 2016: A.1.
ProQuest document link
Abstract:
Lately these battery-powered vehicles more closely replicate adult versions -- especially luxury models -- with working head and taillights, stereos, rubber tires and leather seats. Sales of battery-powered ride-on cars overall in the U.S. reached $430 million last year and so far this year are up 7.1%, said Juli Lennett, U.S. toy industry analyst for market researcher NPD Group.
Full text: Randy Rullamas, a real-estate agent in Fremont, Calif., bought himself a Tesla last year, and then another for his wife. He thought he might as well get a matching one for his sons, 8 and 3, too.
Theirs is pint-size, but it has almost as many bells and whistles as his Model S, with the same sleek lines, identical paint job and matching horn beep.
His version has all-black detailing, so Mr. Rullamas spent about a week covering the chrome trim and emblems on his sons' toy car with black vinyl to match. "It's called a 'chrome delete,' or a 'blackout,' " he said.
Sports cars, Jeeps, trucks and carriages for youngsters are expected to be among the top-selling holiday gifts this year. Lately these battery-powered vehicles more closely replicate adult versions -- especially luxury models -- with working head and taillights, stereos, rubber tires and leather seats.
"If you can't buy your own Maserati, you can buy one for your kid," said Nancy Horvath, a buyer for the children's division of Neiman Marcus Group, which this year included a 4-foot-long white Maserati GranCabrio among its holiday gifts. The $395 Italian sports car includes three forward speeds and a reverse gear, an MP-3 jack and a low-battery indicator "so you're not at the wrong end of the block when it gives out," said Ms. Horvath.
The mini Tesla starts at $499. Mr. Rullamas bought a dark gray mini Model S for his sons, Ryder and Rockwell, the same color and model as his own. The toy car is usually parked in the living room next to the couch -- Ryder likes to drive around the house with Rockwell on his lap. "Within a short period of time Ryder was able to do a three-point turn, parallel park and drive in reverse," said Mr. Rullamas. "He has scuffed the walls a couple of times, I'll be honest, but we touch it up."
He said he hops on his bike to keep up with the children outdoors. A locked speed switch lets parents choose whether the car reaches 3 miles an hour or 6.
Radio Flyer Inc., which produces the car under a license agreement with Tesla, worked with Tesla's designers to replicate the real car. "A lot of battery-operated cars on the market tend to look like a cartoon version of the big car, and that was something we absolutely didn't want to happen," said Robert Pasin, Radio Flyer's chief wagon officer.
Parents are sold on that cool factor -- especially the $50 mini Tesla car cover. "It's really the thing that puts you over the top," said Mr. Pasin.
For Christmas, Mr. Rullamas is considering buying his 3-year-old a battery-powered John Deere tractor to ride. "He gravitates toward construction toys, but it will be a lot slower than his Model S."
Sales at Big Toys Green Country are up about 70% in October and November over the year before, thanks in part to one of the company's best sellers, the Chevrolet Colorado Style. The $489 four-wheel drive truck is "perfect for ages 1-5" and includes working doors and tail gate, power steering and rear-spring suspension, said the company, which sells more than 150 vehicle models.
The truck's rechargeable battery lasts 90 minutes. The junior drivers "don't have an attention span long enough to ride in a vehicle for an hour and a half at a time," said Ron Thomas, chief operating officer of the online retailer based in Muskogee, Okla. "The car usually outlasts them."
Toys "R" Us Inc. published a four-page spread of 23 battery-powered vehicles in its holiday gift guide this year, including a Porsche 911, Cadillac Escalade, Ferrari California T and Mercedes ML63.
"A kid driving a replica Porsche is imagining they're on a racetrack, they're not really imagining they're going 5 miles an hour in their garden," said Richard Barry, chief merchandising officer for Toys "R" Us. Parental imagination is tapped, too. "Those cars are out of the reach of many customers, but they can put their kids in the dream car maybe they can't afford," he said.
Sales of battery-powered ride-on cars overall in the U.S. reached $430 million last year and so far this year are up 7.1%, said Juli Lennett, U.S. toy industry analyst for market researcher NPD Group.
Wal-Mart Stores Inc. worked with a manufacturer and Disney for about a year to design a Disney Princess Carriage. The pink $398 vehicle is shaped like Cinderella's pumpkin coach, seats two and includes a heart-shaped steering wheel, four lighted lanterns, purple tread tires and a tiara. "It has little curtains," said Anne Marie Kehoe, vice president of toys for Wal-Mart U.S.
Some stores display a carriage in high-traffic aisles, so children can climb in and parents can photograph them. No one has driven away. "The batteries are generally not charged," Ms. Kehoe said.
Brett Chandler of Wade, N.C., couldn't wait until Christmas to give his 4-year-old daughter, Brooke, her Disney princess carriage. "I was so excited myself that we went ahead and opened it up," he said of his September purchase.
At first, Mr. Chandler, a police officer, restricted his daughter's speed to its slowest setting. "But she's a good driver and experienced now so I let her go on the high speed" he said. "I have to run to make sure she doesn't crash into a mailbox."
Mr. Chandler has posted videos online of his daughter and a friend, dressed in princess gowns, driving through their quiet neighborhood, waving at passersby. He said a battery charge lasts for about 45 minutes. "They would drive it all day if they could," he said.
For Christmas, Mr. Chandler is now contemplating buying his daughter a "Trolls" movie-themed car. His family has space to park it in the garage, next to Brooke's 3-year-old Jeep and her new carriage. "We park our own cars in the driveway," he said.
Credit: By Ellen Byron
Subject: Automobile sales; Toys; Electric vehicles
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: Nov 28, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: Feature
ProQuest document ID: 1843760469
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1843760469?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
SEC Criticizes Tesla Over 'Tailored' Accounting; Electric car maker has dropped non-GAAP metrics flagged by the regulator
Author: Shumsky, Tatyana
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Nov 2016: n/a.
ProQuest document link
Abstract:
Tesla provided the regulator with proposed disclosures and included the new language in its third-quarter earnings release, articulating that non-GAAP information provides investors with "greater transparency" about its operations and management decision-making.
Full text: Corrections & Amplifications:
The headline on an earlier version of this article misspelled Tesla as Telsa. (Nov. 29, 2016)
Tesla Motors Inc. has come under fire from the Securities and Exchange Commission for using prohibited accounting metrics and sharing that information with investors, according to regulatory correspondence.
The SEC said Tesla in its August earnings release used "individually tailored" measurements when the electric-vehicle maker added back certain costs to revenue calculated under generally accepted accounting principles. While the SEC allows the use of some non-GAAP metrics, certain figures that adjust revenue are prohibited as detailed in the regulator's guidelines from May 17 .
The exchange between the SEC and Tesla includes four letters uploaded by the regulator from mid-September to mid-October. The documents were made public last week, roughly 40 days after the conversation was concluded. The correspondence is typically made public 20 days after the matter is resolved.
The SEC has judged the matter resolved without further action, according to an Oct. 12 letter the regulator sent to the company.
Tesla on Oct. 2 said in a press release it would drop non-GAAP revenue and other custom metrics flagged by the SEC from future earnings filings. The move came after the company in August said it was reviewing the SEC's new accounting guidelines and taking steps to modify its non-GAAP information.
The SEC declined to comment.
The SEC used the word "tailored" to describe revenue adjustments that are specifically prohibited in its May update on regulatory guidelines.
"Whenever the SEC uses that specific term it's a clear indication that this specific adjustment should not be used, it's very strong language," said Olga Usvyatsky, vice president of research and CPA at Audit Analytics.
Tesla was also chastised for its slow response to new guidance on the use of non-GAAP figures.
The regulator criticized Tesla for failing to make a "substantive" case for providing non-GAAP figures to investors. In a letter dated Sept. 23, the SEC picked apart Tesla's prior response that its management uses non-GAAP information internally. The regulator pointed out rules that require "a statement disclosing the reason why you believe that the presentation of a non-GAAP financial measure provides useful information to investors...not how your management uses the information."
The SEC in this case is uncharacteristically specific about wanting to see Tesla's revised disclosures in advance, Ms. Usvyatsky said. "The language is strong, it's not 'please, in future filings,'" Ms. Usvyatsky said.
Tesla provided the regulator with proposed disclosures and included the new language in its third-quarter earnings release, articulating that non-GAAP information provides investors with "greater transparency" about its operations and management decision-making.
The SEC stepped up its policing of non-GAAP accounting this year. The issue was raised in 28% of SEC company correspondence through Sept. 30, up from 14% for the same period in 2015, according to preliminary data from Audit Analytics.
The regulator also issued new guidelines on custom accounting in May, prompting more than a quarter of the companies in the S&P 500 index to put GAAP results at the top of their earnings releases.
Still, it is unclear whether such prescriptive oversight will prevail under the administration of President-elect Donald Trump. Mr. Trump appointed former Republican SEC Commissioner Paul Atkins, a staunch critic of heavy regulation, to lead his financial regulation transition team.
Write to Tatyana Shumsky at tatyana.shumsky@wsj.com
Credit: By Tatyana Shumsky
Subject: Regulation of financial institutions; Earnings; Pro forma financial statements; Accounting
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Nov 29, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1844303311
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1844303311?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Wins Right to Operate Dealerships in Richmond, Va. Virginia decision allows auto maker to expand sales locations ahead of Tesla Model 3 launch
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Nov 2016: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc., facing opposition from the owners of car dealerships, is now eligible to operate its own stores in Richmond, Va., the Virginia Department of Motor Vehicles commissioner ruled on Wednesday.
Full text: Tesla Motors Inc., facing opposition from the owners of car dealerships, is now eligible to operate its own stores in Richmond, Va., the Virginia Department of Motor Vehicles commissioner ruled on Wednesday.
The decision is an important win for Tesla as it tries to expand sales locations ahead of the introduction next year of a lower-priced Model 3 sedan. Chief Executive Officer Elon Musk has said the $35,000 car will take Tesla's production to 500,000 in 2018 from about 50,000 last year.
States have dealer-franchise laws protecting independent retailers from competition from manufacturer-run stores. Tesla has managed to win approval to sell direct in many states, including its largest market in California, but key states including Michigan are blocking the Silicon Valley auto maker's attempt.
Virginia law prohibits auto makers from operating dealerships in the state, but the DMV commissioner can rule that because there is no independent dealer in the area, Tesla is allowed to run its own store.
Opponents could appeal in court and Tesla must still get a license from the Motor Vehicle Dealer Board.
Tesla praised the decision, saying it will begin construction of a new store.
"This decision will allow Richmond-area consumers to learn about and purchase their Tesla vehicles in closer proximity to their homes," Diarmuid O'Connell, vice president of business development at Tesla, said in a statement.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile dealers; Vehicles; Acquisitions & mergers
Location: Virginia Michigan California
People: O Connell, Diarmuid Musk, Elon
Company / organization: Name: Department of Motor Vehicles-Virginia; NAICS: 926120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Nov 30, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1844744719
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1844744719?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Recalls Some Charging Adapters After Overheating; No one injured and no property damaged in November incidents
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Dec 2016: n/a.
ProQuest document link
Abstract:
Tesla Motors Inc., the electric car company, is recalling certain charging adapters after two customers experienced units that overheated.
Full text: Tesla Motors Inc., the electric car company, is recalling certain charging adapters after two customers experienced units that overheated.
No one was injured and no property was damaged in incidents that occurred in November involving the NEMA 14-30 charging adapter, the Silicon Valley auto maker said in an email to customers on Tuesday.
The recall involves NEMA 14-30, 10-30 and 6-50 adapters, which were sold separately.
"Although there have been no incidents with NEMA 10-30 or 6-50 adapters, they have some common elements with the NEMA 14-30, so we will be replacing those as well," the company said.
Owners of the 14-30 adapter, which was manufactured between August 2012 and January 2014, will receive a replacement from the company within the next couple of weeks. The company sold about 2,000 of those adapters.
Tesla advised against continuing to use the 14-30 until a replacement arrives. "Instead charge your car in a different way, such as with a Tesla Wall Connector or NEMA 14-50 adapter (if you have one), or by Supercharging," Tesla said.
Owners of 10-30 and 6-50 units can continue to use them until replacements are developed. Tesla said. The company said that will take about three months.
The recall doesn't involve the Tesla Wall Connector, Universal Mobile Connector or NEMA 14-50 or 5-15 adapters that come standard with the company's vehicles, Tesla said.
In early 2014, Tesla announced that it upgraded its charging software and 14-50 adapter to prevent overheating during charging.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Product recalls
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Dec 6, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1846119268
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1846119268?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Elon Musk to Join Donald Trump's Tech Meeting; CEO of Tesla and SpaceX joins growing list of names for Wednesday's meeting with the president-elect
Author: Winkler, Rolfe
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2016: n/a.
ProQuest document link
Abstract:
The electric car maker recently acquired SolarCity Corp., a company founded by Mr. Musk's cousins that installs solar panels, a portion of the cost of which can be offset by federal tax credits.
Full text: Billionaire entrepreneur Elon Musk plans to be in attendance at President-elect Donald Trump's meeting of tech-industry executives this Wednesday in New York, according to people familiar with the matter.
Mr. Musk is the chief executive of electric-car maker Tesla Motors Inc. and rocket company Space Exploration Technologies Corp., and is a close associate of Peter Thiel, the tech investor and entrepreneur that backed Mr. Trump during the campaign. Mr. Thiel sits on the transition team and is helping to organize this Wednesday's meeting. He and Mr. Musk were both founders of payments company PayPal, and Mr. Thiel's venture-capital firm Founders Fund backs SpaceX.
As reported Saturday , other tech executives expected to attend Wednesday's meeting include Apple Inc. Chief Executive Tim Cook, Facebook Inc. Chief Operating Officer Sheryl Sandberg, Microsoft Corp. CEO Satya Nadella, and both the CEO and chairman of Google parent Alphabet Inc., Larry Page and Eric Schmidt, people familiar with the plans said. The CEOs of Intel Corp., International Business Machines Corp., Oracle Corp. and Cisco Systems Inc. are also expected to attend, the people said.
Mr. Musk's various businesses are more dependent on the U.S. government for revenue than most tech companies.
SpaceX's single largest customer is the National Aeronautics and Space Administration, which over the past eight years has awarded contracts valued at more than $6.5 billion to deliver cargo and eventually, U.S. astronauts, to the international space station. The company also seeks to win hundreds of millions of dollars of additional contracts from the U.S. Air Force over the next few years.
Tesla benefits from government tax credits that reduce the effective price of its vehicles. The electric car maker recently acquired SolarCity Corp., a company founded by Mr. Musk's cousins that installs solar panels, a portion of the cost of which can be offset by federal tax credits.
In the week leading up to the presidential election, Mr. Musk said in an interview on CNBC that he didn't believe Mr. Trump was "the right guy" to be president and that the real-estate magnate "doesn't seem to have the sort of character that reflects well on the United States."
The agenda for this Wednesday's meeting is unclear, though Mr. Trump has emphasized the importance of boosting American jobs and targeted companies including Apple and IBM for purportedly sending jobs overseas.
Tim Higgins and Andy Pasztor contributed to this article.
Write to Rolfe Winkler at rolfe.winkler@wsj.com
Credit: By Rolfe Winkler
Subject: Multinational space ventures; Automobile industry; Product development; Political campaigns
Location: United States--US New York
People: Nadella, Satya Sandberg, Sheryl
Company / organization: Name: SolarCity Corp; NAICS: 238220, 333414, 221114; Name: Alphabet Inc; NAICS: 551114; Name: Microsoft Corp; NAICS: 511210, 334614; Name: Space Exploration Technologies Corp; NAICS: 336414; Name: PayPal Inc; NAICS: 522320; Name: Google Inc; NAICS: 519130; Name: Air Force-US; NAICS: 928110; Name: Cisco Systems Inc; NAICS: 511210, 334118; Name: Oracle Corp; NAICS: 511210; Name: Intel Corp; NAICS: 334419, 511210, 334210, 334413, 334614; Name: Facebook Inc; NAICS: 519130, 518210; Name: Apple Inc; NAICS: 511210, 334111, 334220; Name: Founders Fund; NAICS: 525910; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Dec 11, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1847728965
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1847728965?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Chinese-Backed Startup Takes Aim at Tesla With Unveiling of Its Electric Car; Lucid Motors is latest auto maker backed by Chinese money to take a crack at the U.S. market
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Dec 2016: n/a.
ProQuest document link
Abstract:
Chinese auto makers about a decade ago announced plans to sell relatively low-cost vehicles in the U.S. But those ambitions ran into challenges in 2009, when U.S. car sales fell to their lowest level in about 30 years and General Motors and Chrysler underwent government-backed restructuring.
Full text: Silicon Valley startup Lucid Motors expects on Wednesday to reveal a production version of its electric sedan, a competitor of the Tesla Model S, and to begin accepting reservations for the car, slated to begin assembly in late 2018.
Lucid represents the latest attempt by auto makers backed by Chinese money, including U.S. startups Faraday Future and Karma Automotive as well as NextEV, to crack the U.S. auto market.
Chinese auto makers about a decade ago announced plans to sell relatively low-cost vehicles in the U.S. But those ambitions ran into challenges in 2009, when U.S. car sales fell to their lowest level in about 30 years and General Motors and Chrysler underwent government-backed restructuring. Car deliveries in China soared past those in the U.S. during that time.
Lucid and its peers aim to sell not budget cars but luxury electric vehicles. That segment isn't yet dominated by traditional auto makers and has been spurred by incentives in China, though it has struggled amid low U.S. gas prices.
"These guys are coming in at the highest levels and saying we want to be Tesla or better," said Michael Dunne, a longtime auto industry consultant who spent years in Asia. "These guys seem to be more interested in technology first [that can appeal to customers in China], and if they can sell in the United States, that's good too."
A Tesla spokeswoman didn't immediately respond to a request for comment.
Lucid, based in Menlo Park, Calif., said it had raised more than $200 million from investors including Chinese technology and entertainment company LeEco, Tsing Capital of China, Mitsui & Co., Ltd. of Japan and Venrock of the U.S.
Lucid plans to offer its sedan first in the U.S., followed by China and Europe.
"Most of these companies are hoping to become relevant to Chinese consumers in their home market, which has already become the largest EV market in the world," Bill Russo, an automotive consultant in Shanghai, said by email. "Convincing a Chinese consumer to buy a Chinese-branded car is not easy, and having a 'bragging right' of having been sold in a mature market is felt to be a good way to establish the brand."
Lucid last month showed an exterior design for the vehicle that would have a 100-kilowatt-hour battery and 300-mile range, and offered a virtual-reality demonstration of the interior: a roomy space with a large screen in the middle of the dashboard.
The company expects initially to sell vehicles online and open stores next year, said Zak Edson, Lucid's director of marketing and a former Tesla executive. He declined to reveal the price of a reservation for the vehicle. Lucid executives in a November interview said the vehicle would be priced similarly to other luxury cars. A Mercedes S-Class starts at $96,600, while a Tesla Model S begins at about $70,000.
"There is a growing customer group out there that's more enamored with technology and a technology experience and is willing to pay for that," said Derek Jenkins, Lucid vice president of design and former design director for Mazda North America. "I see a real hunger for that--and we've seen that obviously with Tesla."
Lucid aims to sell 8,000 to 10,000 vehicles in the first full year of production, ramping up to about 50,000 annually within three years, said Peter Rawlinson, Lucid's chief technology officer and a former Tesla vice president of vehicle engineering and chief engineer of the Model S.
In late November, Lucid announced it would build a $700 million factory in Casa Grande, Ariz., and expected to create more than 2,000 jobs by the end of 2022. Last week, it unveiled a deal with Samsung SDI to supply batteries.
The Samsung partnership struck Dave Sullivan, an analyst with AutoPacific, as a smart move, allowing the auto maker to avoid the cost of developing its own battery technology.
Nonetheless, the Chinese-backed car companies faces hurdles to establishing major manufacturing, distribution, and marketing operations. "The people who are doing it...aren't necessarily aware of how much capital this requires," Mr. Sullivan said. "It's not like building a phone or a TV with short-life cycles...It's going to take years of commitment."
Faraday, based in a former Nissan Motor Co. office in Los Angeles, has run into early challenges. The fledgling company with significant Chinese financing, including funding from LeEco founder Jia Yueting, unveiled in January a concept electric car after having announced plans to build a $1 billion factory in Las Vegas. Construction, however, halted last fall after reports that a contractor wasn't paid.
Faraday spokesman Ezekiel Wheeler said the company is in contact with the contractor and aims to introduce a production concept vehicle ahead of January's annual Consumer Electronics Show in Las Vegas.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Automotive engineering; Electric vehicles
Location: China United States--US
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Dec 13, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1848171022
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1848171022?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited w ithout permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Chinese-Backed Startup Takes Aim at Tesla With Unveiling of Its Electric Car; Lucid Motors is latest auto maker backed by Chinese money to take a crack at the U.S. market
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Dec 2016: n/a.
ProQuest document link
Abstract:
Chinese auto makers about a decade ago announced plans to sell relatively low-cost vehicles in the U.S. But those ambitions ran into challenges in 2009, when U.S. car sales fell to their lowest level in about 30 years and General Motors and Chrysler underwent government-backed restructuring.
Full text: Silicon Valley startup Lucid Motors expects on Wednesday to reveal a production version of its electric sedan, a competitor of the Tesla Model S, and to begin accepting reservations for the car, slated to begin assembly in late 2018.
Lucid represents the latest attempt by auto makers backed by Chinese money, including U.S. startups Faraday Future and Karma Automotive as well as NextEV, to crack the U.S. auto market.
Chinese auto makers about a decade ago announced plans to sell relatively low-cost vehicles in the U.S. But those ambitions ran into challenges in 2009, when U.S. car sales fell to their lowest level in about 30 years and General Motors and Chrysler underwent government-backed restructuring. Car deliveries in China soared past those in the U.S. during that time.
Lucid and its peers aim to sell not budget cars but luxury electric vehicles. That segment isn't yet dominated by traditional auto makers and has been spurred by incentives in China, though it has struggled amid low U.S. gas prices.
"These guys are coming in at the highest levels and saying we want to be Tesla or better," said Michael Dunne, a longtime auto industry consultant who spent years in Asia. "These guys seem to be more interested in technology first [that can appeal to customers in China], and if they can sell in the United States, that's good too."
A Tesla spokeswoman didn't immediately respond to a request for comment.
Lucid, based in Menlo Park, Calif., said it had raised more than $200 million from investors including Chinese technology and entertainment company LeEco, Tsing Capital of China, Mitsui & Co., Ltd. of Japan and Venrock of the U.S.
Lucid plans to offer its sedan first in the U.S., followed by China and Europe.
"Most of these companies are hoping to become relevant to Chinese consumers in their home market, which has already become the largest EV market in the world," Bill Russo, an automotive consultant in Shanghai, said by email. "Convincing a Chinese consumer to buy a Chinese-branded car is not easy, and having a 'bragging right' of having been sold in a mature market is felt to be a good way to establish the brand."
Lucid last month showed an exterior design for the vehicle that would have a 100-kilowatt-hour battery and 300-mile range, and offered a virtual-reality demonstration of the interior: a roomy space with a large screen in the middle of the dashboard.
The company expects initially to sell vehicles online and open stores next year, said Zak Edson, Lucid's director of marketing and a former Tesla executive. He declined to reveal the price of a reservation for the vehicle. Lucid executives in a November interview said the vehicle would be priced similarly to other luxury cars. A Mercedes S-Class starts at $96,600, while a Tesla Model S begins at about $70,000.
"There is a growing customer group out there that's more enamored with technology and a technology experience and is willing to pay for that," said Derek Jenkins, Lucid vice president of design and former design director for Mazda North America. "I see a real hunger for that--and we've seen that obviously with Tesla."
Lucid aims to sell 8,000 to 10,000 vehicles in the first full year of production, ramping up to about 50,000 annually within three years, said Peter Rawlinson, Lucid's chief technology officer and a former Tesla vice president of vehicle engineering and chief engineer of the Model S.
In late November, Lucid announced it would build a $700 million factory in Casa Grande, Ariz., and expected to create more than 2,000 jobs by the end of 2022. Last week, it unveiled a deal with Samsung SDI to supply batteries.
The Samsung partnership struck Dave Sullivan, an analyst with AutoPacific, as a smart move, allowing the auto maker to avoid the cost of developing its own battery technology.
Nonetheless, the Chinese-backed car companies faces hurdles to establishing major manufacturing, distribution, and marketing operations. "The people who are doing it...aren't necessarily aware of how much capital this requires," Mr. Sullivan said. "It's not like building a phone or a TV with short-life cycles...It's going to take years of commitment."
Faraday, based in a former Nissan Motor Co. office in Los Angeles, has run into early challenges. The fledgling company with significant Chinese financing, including funding from LeEco founder Jia Yueting, unveiled in January a concept electric car after having announced plans to build a $1 billion factory in Las Vegas. Construction, however, halted last fall after reports that a contractor wasn't paid.
Faraday spokesman Ezekiel Wheeler said the company is in contact with the contractor and aims to introduce a production concept vehicle ahead of January's annual Consumer Electronics Show in Las Vegas.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Automotive engineering; Electric vehicles
Location: China United States--US
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Dec 14, 2016
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1848301132
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1848301132?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited w ithout permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Chinese-Backed Startup Takes Aim at Tesla
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 Dec 2016: B.7.
ProQuest document link
Abstract:
Chinese car makers about a decade ago announced plans to sell relatively low-cost vehicles in the U.S. But those ambitions ran into challenges in 2009, when U.S. car sales fell to their lowest level in about 30 years and General Motors and Chrysler underwent government-backed restructuring.
Full text: Silicon Valley startup Lucid Motors expects on Wednesday to reveal a production version of its electric sedan, a competitor of the Tesla Model S, and to begin accepting reservations for the car, slated to begin assembly in late 2018.
Lucid represents the latest attempt by auto makers backed by Chinese money, including U.S. startups Faraday Future and Karma Automotive to crack the U.S. auto market.
Chinese car makers about a decade ago announced plans to sell relatively low-cost vehicles in the U.S. But those ambitions ran into challenges in 2009, when U.S. car sales fell to their lowest level in about 30 years and General Motors and Chrysler underwent government-backed restructuring. Car deliveries in China soared past those in the U.S. during that time.
Lucid and its peers aim to sell luxury electric vehicles, not budget cars. That segment isn't yet dominated by traditional auto makers and has been spurred by incentives in China, though it has struggled amid low U.S. gas prices.
"These guys seem to be more interested in technology first [that can appeal to customers in China], and if they can sell in the United States, that's good too," said Michael Dunne, a longtime auto industry consultant who spent years in Asia.
A Tesla spokeswoman didn't immediately respond to a request for comment.
Lucid, based in Menlo Park, Calif., said it had raised more than $200 million from investors. The company plans to offer its sedan first in the U.S., followed by China and Europe.
"Convincing a Chinese consumer to buy a Chinese-branded car is not easy, and having a 'bragging right' of having been sold in a mature market is felt to be a good way to establish the brand," said Bill Russo, an automotive consultant in Shanghai.
Lucid recently showed an exterior design for the vehicle that would have a 300-mile range.
The company expects initially to sell vehicles online and open stores next year, said Zak Edson, Lucid's director of marketing. He declined to reveal the price of a vehicle reservation. Lucid executives have said the vehicle would be priced similarly to other luxury cars. A Mercedes S-Class starts at $96,600; a Tesla Model S begins at about $70,000.
Lucid aims to sell 8,000 to 10,000 vehicles in the first full year of production, ramping up to about 50,000 annually within three years, said Peter Rawlinson, Lucid's chief technology officer.
Credit: By Tim Higgins
Subject: Automobile industry; Electric vehicles
Location: China United States--US
Company / organization: Name: Lucid Motors; NAICS: 336111; Name: Karma Automotive LLC; NAICS: 336111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.7
Publication year: 2016
Publication date: Dec 14, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1848393972
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1848393972?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Could Lose Lead in Electric Cars to Big Automakers; One thing that won't change as the car industry electrifies is the importance of product
Author: Wilmot, Stephen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Dec 2016: n/a.
ProQuest document link
Abstract:
In a series of articles this month, Heard on the Street takes a look at how investors should approach the biggest technological disruption the car industry has faced in decades. [...]the race to produce the world's first affordable electric car was arguably won six years ago when Nissan launched its Leaf.
Full text: The car of the future will be electric, connected and, eventually, self-driving. But where does that leave the car industry of the future? In a series of articles this month, Heard on the Street takes a look at how investors should approach the biggest technological disruption the car industry has faced in decades.
It is always tempting to frame competition in the car industry as a race. But making a killer product matters more than crossing the finishing line first.
Tesla's Model 3, due to be released late next year, has been hyped as the Model T of the electric age. The Model T--considered the world's first affordable car--gave Ford a three-fifths share of the U.S. car market in the early 1920s.
Certainly Mr. Musk has done an impressive job popularizing electric cars. Despite their expense, the existing Tesla Models S and X bagged a dominant 31% share of the roughly 130,000 electric vehicles sold in the U.S. for the year through November. The company also persuaded some 400,000 people to put down a refundable $1,000 deposit to reserve a Model 3.
But the comparison with Ford cuts the other way, too. By the end of the 1920s the first-mover had been overtaken by fast-follower General Motors, which remains the larger company even today.
This month GM is releasing its all-electric Chevrolet Bolt at a price point similar to the Model 3. By 2020, after electric-product launches from most other global car brands, the choice facing car buyers will be bewildering. In a booming market place, Tesla could lose its early magic just as Ford did.
Another popular comparison sees Tesla as the Apple of electric cars: The automobile is, after all, the ultimate mobile device. But again the parallel is double-edged.
Famously, Apple's iPhone wasn't the first smartphone, but the company has absorbed more than 90% of the industry's profits, estimates UBS. It came up with a killer product and, thanks to its retailing footprint and existing reputation for computers and iPods, exploited it.
Similarly, the race to produce the world's first affordable electric car was arguably won six years ago when Nissan launched its Leaf. It remains the best-selling electric car model over its history, but sales have undershot initial expectations, probably because the car's limited battery life gave consumers so-called "range anxiety."
Could the Model 3 be the product that finally shifts the gear? Possibly. Mr. Musk enjoys an Apple-like marketing halo that will give the Model 3 an advantage over rival products from Detroit and beyond. Consumers also seem to love Tesla's design, which rejects the modest environmentalism of the Leaf in favor of sleek futurism.
But there are crucial differences between cars and phones. People replace cars less frequently than they buy new phones, giving competitors more time to react to innovation. And car crashes matter more than phone crashes, so practicality can win out over style. Above all, phones are far cheaper to make. Apple could pitch its iPhone as a luxury product, with luxurious margins, that was nonetheless affordable. Tesla can't make an underlying profit selling cars for upwards of $70,000. The Model 3 is evidence it knows it needs to halve the price to stay in the game.
One thing that won't change as the auto industry electrifies is the importance of product. As before, the car manufacturers that succeed will be those that can profitably make a range of desirable cars.
BMW has heeded this lesson. Another early pioneer of electric cars, the Munich-based manufacturer probably spent more than [euro]5 billion developing its boxy all-electric i3 model, estimates Morgan Stanley's Harald Hendrikse, only to face slow sales following the 2013 launch. In November, the company laid out plans to electrify its conventional product range , but unlike German peers Volkswagen and Daimler didn't set itself a punchy sales target. Instead it has stressed the importance of profitable production and maintaining its brand.
Tesla's early lead in the luxury market is impressive. But experienced manufacturers from the auto industry's existing hubs are mastering the new technology. They seem more likely to carry the electric torch into a more affordable era.
Write to Stephen Wilmot at stephen.wilmot@wsj.com
In the same series
* Investors Get Ready for the Coming Electric Car Revolution
Credit: By Stephen Wilmot
Subject: Electric vehicles; Automobile industry; Smartphones
Location: United States--US
Company / organization: Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Dec 15, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1848864698
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1848864698?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Auto Companies: Better With Batteries Not Included; Tesla and others should leave battery making to the experts
Author: Wilmot, Stephen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Dec 2016: n/a.
ProQuest document link
Abstract:
The Japanese car maker bet big on battery production for its all-electric Leaf model, only to contend with excess capacity when sales underwhelmed.
Full text: For car makers looking to board the electric bandwagon , building battery plants may be a sign of weakness, not strength.
Batteries are by far the most expensive component in electric cars, costing roughly $7,500 a piece, estimates stockbroker Liberum. Battery technology also determines crucial performance features such as power and range that have held back sales.
Even so, it may be a mistake for car makers to assume battery production is a core competence. Changing consumer tastes and the emergence of self-driving technology suggest driving experience will eventually take a back seat to digital experience--presumably in the form of software that helps drivers or entertains passengers.
Car companies that invest in battery plants risk plowing billions into ventures that struggle to match the technology or cost advantage of established battery giants Panasonic, LG Chem and Samsung.
Nissan's experience is salutary. The Japanese car maker bet big on battery production for its all-electric Leaf model, only to contend with excess capacity when sales underwhelmed.
Some car makers have pressed the button. The furthest along is Tesla , which sometimes refers to itself as a battery company, not a car company. It currently makes battery packs using cells imported from Panasonic. But together with its Japanese supplier it is now building a $5 billion "gigafactory " in Nevada that will make both cells and packs for next year's Model 3.
Mercedes-maker Daimler also makes its own packs, and this year pledged [euro]1 billion toward expanding production. Volkswagen, trying to recover from last year's diesel scandal, will bring battery production in-house. But labor negotiations explain the move as much as industrial strategy: The investment was revealed alongside 30,000 job cuts .
Other manufacturers, including electric-vehicle pioneers General Motors, BMW and Nissan's sister company Renault, have preferred to work with suppliers. This looks the more financially rational path.
The question remains: How will car companies differentiate themselves in the electric age? German manufacturers, in particular, make much of their engine technology (too much, it turned out, in Volkswagen's case). Their brands and in most cases superior margins depend on the assumption that they offer a superior driving experience. Can this assumption be maintained if they buy the same East Asian batteries as everyone else? Daimler and VW evidently think not.
But the perceived heart of the electric vehicle may be the electronic operating system, not the powertrain. Consumers don't seem to care that Apple outsources production of the iPhone, right through to assembly. GM has taken that path, loading the Bolt with technology including Apple CarPlay. That could win it fans who normally wouldn't be caught dead in a Chevy.
Investors should treat car makers with grandiose investment plans with suspicion: Securing access to cutting-edge battery manufacture is what matters. In the electric era, an obsession with powertrain technology may not come with the same bragging rights.
Credit: By Stephen Wilmot
Subject: Automobile industry; Electric vehicles; Manufacturers
Company / organization: Name: Volkswagen AG; NAICS: 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Dec 19, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1850002575
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1850002575?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
The Highly Charged Way to Play Electric Cars; Utilities receive little attention in the electric-vehicle revolution compared with manufacturers like Tesla
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Dec 2016: n/a.
ProQuest document link
Abstract:
[...]Georgia Power, a unit of Southern Co., has piloted a special household rate that offers a significant discount for electric vehicle users between 11 p.m. and 7 a.m. while peak prices would apply between 2 p.m. and 7 p.m. from June through September.
Full text: The next automotive revolution will be electric, or so they say.
The financial spotlight is on the car companies that will produce them, and especially on pioneer Tesla Motors, but are investors getting things wrong? Isn't there equal or perhaps far greater value in enabling electric vehicles?
Today internal combustion or diesel engines still power almost everything that moves on the road. Making that possible are 150,000 gas stations in the U.S. alone that dispensed more than $300 billion of motor fuels last year. The nation's largest oil company, Exxon Mobil--just one of many and a midget in global terms--is worth seven times as much as its biggest car company, General Motors. By contrast, even with its vehicles comprising well under half of 1% of light vehicle sales this year, Tesla is worth as much as major utility Exelon with 10 million customers.
By that reasoning, if electric cars are a huge opportunity then powering them is a ginormous one. Hold your horsepower, though--the reality is far tamer, though still interesting. For one, there already is a lot of electricity consumed and distributed. If every single car in America were electric then it would be awful for petroleum companies, disastrous for refiners and fatal for fuel retailers, but merely a challenge for electric utilities.
It would boost electric consumption by 25%. But, because so much electricity is produced to keep the system reliable, the actual increase in generation capacity would likely be far more modest. A U.S. government study in 2007 calculated that the system was at peak usage just 5% of the time, usually on summer afternoons when air-conditioning demand is high. People coming home in August and immediately plugging in their drained vehicles could overload the system quickly but doing the same at work or after midnight might have no impact at all. In a theoretical exercise, a maximum of 73% of miles driven nationally could be supported using available resources--something for almost nothing.
The reality would likely be somewhere in-between. The answer depends on how utilities respond to the growing market and in turn how consumers respond to their incentives. For example, Georgia Power, a unit of Southern Co., has piloted a special household rate that offers a significant discount for electric vehicle users between 11 p.m. and 7 a.m. while peak prices would apply between 2 p.m. and 7 p.m. from June through September.
Realistically, it will be a long time before electric cars make up all or even half of the fleet. California, home to the largest number of electric vehicles and a state targeting 1.5 million, would face two different scenarios, according to a study by the Rocky Mountain Institute. If utilities build chargers and optimize incentives then it might mean a 1.9% increase in peak power demand. If they don't then it would mean a 2.6% increase.
In either case this is far from a bonanza for utilities. And, because of how their business models work, most regulated utilities would prefer a smaller increase in peak demand. They would be selling just as much electricity in that case, but more of it would be power that was wasted. And this assumes that they would have a proper financial incentive to install rapid chargers in nonresidential locations. Those incentives are necessary since a rapid "level 3" charger can cost 20 to 100 times as much as the cheapest 120-volt home charger.
This sounds promising, but governments have been far readier to subsidize rich environmentalists buying electric sports cars than utilities that will have to make their widespread adoption possible. Even with rapid adoption, they won't be a bonanza for electricity providers, but regulation and consumer behavior will determine whether they are a financial burden or an opportunity.
Write to Spencer Jakab at spencer.jakab@wsj.com
Credit: By Spencer Jakab
Subject: Electric vehicles; Electric utilities; Automobile industry; Electricity; Incentives
Location: United States--US California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Georgia Power Co; NAICS: 221122; Name: General Motors Corp; NAICS: 336111, 333415, 336390; Name: Rocky Mo untain Institute; NAICS: 541711; Name: Southern Co; NAICS: 221112, 221122
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Dec 20, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1850409353
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1850409353?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Panasonic to Put $260 Million Into Plant Supplying Solar Cells to Tesla; Buffalo, N.Y. factory will make photovoltaic cells and modules
Author: Landers, Peter
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Dec 2016: n/a.
ProQuest document link
Abstract: None available.
Full text: TOKYO--Panasonic Corp. expects to invest more than ¥30 billion ($260 million) in a Buffalo, N.Y., plant that will make photovoltaic cells and modules for Tesla Motors Inc., Panasonic said Tuesday.
Tesla said in October that it would work with Panasonic in completing the Buffalo plant, which originally was to be a SolarCity Corp. manufacturing plant. Tesla completed its acquisition of SolarCity in November.
Tesla said Tuesday that it is reaffirming its commitment to create more than 1,400 jobs in Buffalo, including more than 500 manufacturing jobs. Tesla's agreement with Panasonic calls for the Japanese company to cover capital costs in Buffalo, while Tesla will make a long-term purchase commitment from Panasonic.
In presentation materials, Panasonic said it expects its total investment in the Buffalo plant to exceed ¥30 billion. It said it expected the plant to open in the summer of 2017 and ramp up to 1 gigawatt of module production by 2019.
Write to Peter Landers at peter.landers@wsj.com
Related Coverage
* Tesla to Partner with Panasonic to Make Solar Panels at Buffalo Factory (Oct. 17)
* Tesla Motors Closes SolarCity Acquisition (Nov. 21)
Credit: By Peter Landers
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Dec 27, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1852960618
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1852960618?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Panasonic, Tesla Affirm Plan for U.S.
Author: Landers, Peter
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 Dec 2016: B.4.
ProQuest document link
Abstract: None available.
Full text: TOKYO -- Panasonic Corp. said Tuesday that it expects to invest more than 30 billion yen ($260 million) in a Buffalo, N.Y., plant that will make photovoltaic cells and modules for Tesla Motors Inc.
Tesla said in October it would work with Panasonic in completing the Buffalo facility, which originally was to be a SolarCity Corp. manufacturing plant. Tesla completed its acquisition of SolarCity in November.
Tesla on Tuesday affirmed its commitment to create more than 1,400 jobs in Buffalo. Tesla's agreement with Panasonic calls for the Japanese company to cover capital costs in Buffalo, while Tesla will commit to purchases from Panasonic.
Credit: By Peter Landers
Subject: Investments
Company / organization: Name: Panasonic Corp; NAICS: 333415, 335222, 335224; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2016
Publication date: Dec 28, 2016
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1853264178
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1853264178?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Narrowly Misses 80,000-Vehicle Sales Goal in 2016; CEO Musk was aiming for a strong finish to the year to help keep investor confidence
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Jan 2017: n/a.
ProQuest document link
Abstract:
The new Autopilot hardware is aimed at making the system more advanced, eventually allowing the cars to become fully self-driving once the software is ready. Because of the hardware delays, Tesla said production was weighted more heavily toward the end of the quarter, affecting deadlines to ship cars to Europe and Asia.
Full text: Tesla Motors Inc.'s fourth-quarter sales rose 27%--but not enough for the Silicon Valley auto maker to reach its goal of delivering at least 80,000 vehicles in 2016.
The Palo Alto, Calif., company sold 22,200 vehicles during the October-through-December period, compared with 17,478 a year earlier, Tesla said Tuesday. The company sold a total of 76,230 cars and sport-utility vehicles last year.
Chief Executive Officer Elon Musk was aiming for a strong finish to 2016 to help keep investor confidence ahead of the introduction this year of the new Model 3, a $35,000 sedan intended to broaden Tesla's business beyond luxury cars and SUVs.
Shares of Tesla fell more than 2% to $212.18 in after-hours trading Tuesday.
Mr. Musk, who is also the chairman and largest shareholder of Tesla, has a habit of setting ambitious goals and timelines and missing them . He has said Tesla would make 500,000 cars a year by the end of 2018 and 1 million vehicles in 2020. The company is a long way off from that mark. Last year, Tesla produced nearly 84,000 vehicles.
Tesla began 2016 with ambitions of delivering 80,000 to 90,000 vehicles. The first half started off slow with complications around the new Model X sport-utility vehicle.
Orders ran at an all-time high during the fourth quarter, the auto maker said. But Tesla couldn't make the vehicles fast enough to head off delays that arrived after introducing new hardware to vehicles beginning in late October for Autopilot, the semiautonomous driving feature.
Autopilot has proven to be a thorny issue for Tesla after the driver of a Model S died last year when the car crashed into the side of a truck while using the semiautonomous driving system. U.S. regulators are investigating the matter, and Tesla has since made improvements to the software that it says likely would have prevented the crash.
The new Autopilot hardware is aimed at making the system more advanced, eventually allowing the cars to become fully self-driving once the software is ready.
Because of the hardware delays, Tesla said production was weighted more heavily toward the end of the quarter, affecting deadlines to ship cars to Europe and Asia.
About 2,750 vehicles weren't counted as sold in the quarter because of last-minute delays transporting them or the customer couldn't physically take delivery, Tesla said. "Although we tried to recover these deliveries and expedite others by the end of the quarter, time ran out before we could deliver all customer cars," the company said.
Tesla doesn't count a car sold until it is delivered to a customer, even if it was already paid for in advance.
Adam Jonas, an analyst for Morgan Stanley, doesn't think Tesla will be ready with the Model 3 this year, saying in a note to investors last month that late 2018 is more likely.
"We have taken this conservative approach to allow for the probability that Tesla will choose to prioritize the quality, cost, performance and lifesaving technology of the vehicle," Mr. Jonas wrote.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related Coverage
* Electric Cars: Still Unpopular With Buyers and Unprofitable for Sellers (Dec. 28, 2016)
* The Highly Charged Way to Play Electric Cars (Dec. 20, 2016)
* Tesla Could Lose Lead in Electric Cars to Big Auto Makers (Dec. 15, 2016)
* Investors Get Ready for the Coming Electric Car Revolution (Dec. 13, 2016)
Credit: By Tim Higgins
Subject: Electric vehicles; Sport utility vehicles; Automobile industry
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jan 3, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1854858653
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1854858653?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Tesla Falls Short of 2016 Target --- Auto maker narrowly misses goal to deliver 80,000 vehicles; quarterly sales rise 27%
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Jan 2017: B.3.
ProQuest document link
Abstract:
Tesla Motors Inc.'s fourth-quarter sales rose 27% -- but not enough for the Silicon Valley auto maker to reach its goal of delivering at least 80,000 vehicles in 2016.
Full text: Tesla Motors Inc.'s fourth-quarter sales rose 27% -- but not enough for the Silicon Valley auto maker to reach its goal of delivering at least 80,000 vehicles in 2016.
The Palo Alto, Calif., company sold 22,200 vehicles during the October-through-December period, compared with 17,478 a year earlier, Tesla said Tuesday. The company sold a total of 76,230 cars and sport-utility vehicles last year.
Chief Executive Officer Elon Musk was aiming for a strong finish to 2016 to help keep investor confidence ahead of the introduction this year of the new Model 3, a $35,000 sedan intended to broaden Tesla's business beyond luxury cars and SUVs.
Shares of Tesla fell more than 2% to $212.18 in after-hours trading Tuesday.
Mr. Musk, who is also the chairman and largest shareholder of Tesla, has said Tesla would make 500,000 cars a year by the end of 2018 and one million vehicles in 2020. The company is a long way off from that mark. Last year, Tesla produced nearly 84,000 vehicles.
Tesla began 2016 with ambitions of delivering 80,000 to 90,000 vehicles. The first half started off slow with complications around the new Model X sport-utility vehicle.
Orders ran at a high during the fourth quarter, the auto maker said. But Tesla couldn't make the vehicles fast enough to head off delays that arrived after introducing new hardware to vehicles beginning in late October for Autopilot, the semiautonomous driving feature.
Autopilot has proved to be a thorny issue for Tesla after the driver of a Model S died last year when the car crashed into the side of a truck while using the semiautonomous driving system. U.S. regulators are investigating the matter, and Tesla has since made improvements to the software that it says likely would have prevented the crash.
The new Autopilot hardware is aimed at making the system more advanced, eventually allowing the cars to become fully self-driving once the software is ready.
Credit: By Tim Higgins
Subject: Automobile sales; Electric vehicles
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Jan 4, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1854982307
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1854982307?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Ignore Tesla's Latest Slip at Your Peril; Tesla adds another missed forecast to its tally
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Jan 2017: n/a.
ProQuest document link
Abstract:
Investors buy Tesla shares on the expectation that the company will become a leading auto manufacturer in the years to come rather than for what the business is capable of today.
Full text: Tesla Motors regularly has a hard time meeting its forecasts. It is a mistake for investors to ignore the implications.
Consider the company's vehicle deliveries : Tesla announced Tuesday it delivered 22,200 cars in the fourth quarter and slightly more than 76,000 in 2016. While that was the strongest fourth quarter on record, the results came in well below Tesla's latest guidance of 80,000 deliveries.
Tesla attributed the shortfall to "short-term production challenges" related to installing new autopilot hardware that started at the end of October. But those must have started days after Tesla reaffirmed its full-year delivery forecast on Oct. 26.
If all this sounds familiar , it should: Tesla missed its quarterly forecast three times last year. In those other two instances, Tesla cited parts shortages , shipping delays and an "extreme production ramp" as reasons. At the start of last year, Tesla had forecast it would deliver 80,000 to 90,000 cars.
News Tesla has begun battery production at its Gigafactory for its energy storage products helped push the stock sharply higher Wednesday, and ignoring the delivery miss somehow makes sense. Investors buy Tesla shares on the expectation that the company will become a leading auto manufacturer in the years to come rather than for what the business is capable of today.
Yet the distant future will eventually become the present. Tesla has promised to build 500,000 units by 2018 and 1 million by 2020. That will require hitting its highly ambitious timeline to roll out the new Model 3 mass-market sedan. Putting it mildly, Tesla hasn't displayed the precise inventory management skills of its mass-market competitors.
For now, investors have assigned a valuation to the stock which implies it can beat them at their game. Tesla certainly can talk the talk, but it looks less and less like it can walk the walk.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Investments
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jan 4, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1855088441
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1855088441?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Car Industry Has Unlikely Patriots; Tesla, BMW and Daimler can better afford U.S. manufacturing than the Detroit Three
Author: Wilmot, Stephen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Jan 2017: n/a.
ProQuest document link
Abstract:
While Tesla makes a fraction of the vehicles of the big auto makers, it could be hurt if the Trump administration rolls back the environmental rules and subsidies that underpin the electric car industry.
Full text: Which are the most patriotic U.S. car makers? By Donald Trump's apparent measure, Tesla, BMW and, yes, Ford are the improbable medalists.
The President Elect's tweets damning auto makers that build factories in Mexico have sent a chill through Detroit. Having focused his ire mainly on Ford last year--and taken credit for a reversal of its plan to build a new plant south of the border--Mr. Trump has this year broadened his attack to include General Motors and Toyota.
His target seems clear enough : companies that relocate manufacturing, and thus jobs, away from the U.S. But the American companies he has picked actually make most of their U.S.-sold cars in the U.S.
Ford makes the equivalent of 95% of the cars it sells in the U.S. locally, according to WardsAuto data for the first 11 months of 2016. For General Motors the figure is 83%. The company Mr. Trump should really be picking on, according to this measure, is Fiat Chrysler: The number of cars it makes in the U.S. works out at just 69% of its U.S. sales.
Meanwhile, the company with the most extensive U.S. manufacturing base relative to sales is electric-vehicle specialist Tesla, which makes all its cars in the U.S. and exports almost half of them. While Tesla makes a fraction of the vehicles of the big auto makers, it could be hurt if the Trump administration rolls back the environmental rules and subsidies that underpin the electric car industry.
German luxury manufacturers also figure highly in a ranking of U.S. manufacturers. BMW is a net exporter, thanks to its huge base in South Carolina, while the number of cars Mercedes-owner Daimler makes in the U.S. amounts to 86% of its U.S. sales. They may be foreign-owned, but like Tesla they face less pressure to shift production to cheaper countries because they charge premium prices and make fatter margins.
Ford is the odd one out: a mass-market brand with predominantly local production. Little wonder it wanted to build that factory in Mexico.
Write to Stephen Wilmot at stephen.wilmot@wsj.com
Credit: By Stephen Wilmot
Subject: Automobile industry; Manufacturing; Factories; Automobile sales
Location: United States--US Detroit Michigan Mexico
Company / organization: Name: General Motors Corp; NAICS: 336111, 333415, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jan 10, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1856823493
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1856823493?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Regulators to Close Tesla Autopilot Probe; Investigators unable to uncover defects in the technology in use during a fatal crash last year
Author: Spector, Mike; Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Jan 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: U.S. highway safety regulators are near closing a probe of Tesla's Autopilot system without seeking a recall or other action against the Silicon Valley auto maker, said people familiar with the matter, after a six-month investigation failed to uncover a defect in the semi-automated technology in use during a fatal crash last year .
The National Highway Traffic Safety Administration is expected on Thursday to disclose the investigation is closed, the people said.
Regulators opened an investigation of Autopilot after Joshua Brown, a 40-year-old former Navy SEAL, was killed driving on a Florida highway in May while using the semiautonomous technology. Mr. Brown's Model S electric car collided with an 18-wheel tractor trailer that had cut in front of him. The probe, opened at the end of June, scrutinized the automatic emergency braking and forward-collision warning aspects of the Autopilot system.
Tesla said Autopilot failed to detect the truck's white trailer against a brightly-lit sky before the collision. Tesla has since updated Autopilot with additional use of radar that Chief Executive Elon Musk said "very likely" would have prevented the crash, though he added he couldn't be certain.
Reuters earlier reported on the Tesla Autopilot probe's expected closure.
Write to Mike Spector at mike.spector@wsj.com and Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Mike Spector and Tim Higgins
Subject: Traffic accidents & safety
Location: Florida United States--US
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jan 19, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1861589270
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1861589270?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Regulators End Tesla Probe --- NHTSA determines that self-driving car technology wasn't defective in fatal crash
Author: Spector, Mike; Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Jan 2017: B.3.
ProQuest document link
Abstract:
The probe's conclusion, coming a day before Donald Trump's presidential inauguration, removes a cloud that has hung over Tesla and raised industrywide safety concerns around a race among Silicon Valley stalwarts and traditional auto makers to bring self-driving cars to U.S. roads.
Full text: U.S. regulators closed a probe of a fatal crash involving a Tesla Motors Inc. car driving itself, concluding the Silicon Valley auto maker's semi-automated technology didn't contain a safety defect.
The National Highway Traffic Safety Administration on Thursday said that after a six-month investigation it found no "defects in the design or performance" of Autopilot, the semiautonomous driving system that allows Tesla's electric cars to power themselves in certain conditions.
The conclusion removed some scrutiny swirling around Tesla's aggressive approach to rolling out automated driving technologies, giving the auto maker a reprieve. But U.S. highway safety regulators said they would continue to monitor self-driving technologies and raised concerns about aggressive marketing and motorists becoming imbued with a false sense of security when using such systems.
The regulators began probing Autopilot after Joshua Brown, a 40-year-old former Navy SEAL, was killed when his Model S electric car using the technology collided with an 18-wheel tractor trailer on a Florida highway in May. Tesla said Autopilot failed to detect the truck's white trailer against a brightly lit sky.
But regulators found the system's automatic emergency braking and forward-collision warning features performed as designed, and suggested Mr. Brown could have anticipated the crash with at least seven seconds to react.
"There was enough lead time to take some action," said Bryan Thomas, an NHTSA spokesman, adding it remains unclear whether Mr. Brown could have mitigated or avoided the crash. The agency's probe found Mr. Brown didn't maneuver in the seconds before the collision.
"The Brown family plans to review the NHTSA findings and conclusions along with all other information assembled by the other agencies that have investigated the tragic loss of their son," said Jack Landskroner, a lawyer for Mr. Brown's relatives.
The government, which took no action against Tesla, cited a September software upgrade that Chief Executive Elon Musk has claimed "very likely" would have prevented the collision, adding he couldn't be certain.
"We appreciate the thoroughness of NHTSA's report and its conclusion," the Palo Alto, Calif., company said in a statement.
The probe's conclusion, coming a day before Donald Trump's presidential inauguration, removes a cloud that has hung over Tesla and raised industrywide safety concerns around a race among Silicon Valley stalwarts and traditional auto makers to bring self-driving cars to U.S. roads.
Credit: By Mike Spector and Tim Higgins
Subject: Accident investigations; Traffic accidents & safety; Autonomous vehicles
Location: United States--US
People: Musk, Elon
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Jan 20, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1860035010
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1860035010?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Boosts Range of All-Electric Model S to 335 Miles; New version of Model S, called 100D, has a battery that can hold a charge for 20 miles longer than previous best
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Jan 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Corrections & Amplifications
Tesla's Model S 100D starts at $93,700, including fees, while the P100D costs $135,700. An earlier version of this article incorrectly stated the starting prices.
Tesla Motors Inc. has extended the battery range for a new version of the Model S sedan to 335 miles on a charge, furthering the Silicon Valley auto maker's lead in the all-electric car race.
On its website Friday, the company revealed the new version of the Model S, called the 100D, with a 100 kilowatt-hour battery that can hold a charge for 20 miles longer than the previous best.
In August, Tesla began selling the high-performance version of the sedan called the P100D with a 100 kwh battery that could go up to 315 miles , then a new benchmark for auto makers. General Motors Co.'s new all-electric Chevrolet Bolt has a range of 238 miles , while the BMW i3 can go up to 114 miles.
Those vehicles are priced much lower than the Model S. The 100D starts at $93,700, including fees, while the P100D costs $135,700. The 100D doesn't have certain high-performance attributes as its more expensive sibling, which boasts the much hyped "Ludicrous" upgrade that enables the car to accelerate from zero to 60 miles per hour in 2.5 seconds. The 100D reaches 60 mph in 4.2 seconds.
Jaguar Land Rover in November unveiled plans for a an all-electric SUV with a 90 kwh battery designed to give the vehicle a range of 220 miles on a charge.
Besides improving the Model S, Tesla Chief Executive Elon Musk is focused on bringing out a smaller, less expensive sedan called the Model 3 later this year. He expects the Model 3 to help fuel new sales and take the Palo Alto, Calif., company's annual vehicle production to 500,000 next year from about 84,000 last year. Tesla has been targeting a range of 215 miles for the all-electric Model 3.
Tesla on Friday also introduced a new version of the Model X that can hold a charge for up to 295 miles, compared with a previous 289-mile range.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Automotive parts
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Jaguar Land Rover; NAICS: 336111; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jan 20, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1861605783
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1861605783?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Regulators Close Tesla Autopilot Probe; NHTSA unable to uncover defects in the technology in use during a fatal crash last year
Author: Spector, Mike; Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Jan 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: U.S. regulators closed a probe of a fatal crash involving a Tesla Motors Inc. car driving itself, concluding the Silicon Valley auto maker's semi-automated technology didn't contain a safety defect.
The National Highway Traffic Safety Administration on Thursday said that after a six-month investigation it found no "defects in the design or performance" of Autopilot, the semiautonomous driving system that allows Tesla's electric cars to steer, brake, cruise and change lanes themselves under certain circumstances.
The conclusion removed some scrutiny swirling around Tesla's aggressive approach to rolling out automated driving technologies, giving the auto maker a reprieve. But U.S. highway-safety regulators said they would continue to monitor self-driving technologies and raised concerns about aggressive marketing and motorists becoming imbued with a false sense of security when using such systems.
The regulators began probing Autopilot after Joshua Brown, a 40-year-old former Navy SEAL, was killed when his Model S electric car using the technology collided with an 18-wheel tractor trailer on a Florida highway in May. Tesla said Autopilot failed to detect the truck's white trailer against a brightly lit sky.
But regulators found the system's automatic emergency braking and forward-collision warning features performed as designed, and suggested Mr. Brown could have anticipated the crash with at least seven seconds to react.
"There was enough lead time to take some action," said Bryan Thomas, an NHTSA spokesman, adding it remains unclear whether Mr. Brown could have mitigated or avoided the crash. The agency's probe found Mr. Brown didn't maneuver in the seconds before the collision.
"The Brown family plans to review the NHTSA findings and conclusions along with all other information assembled by the other agencies that have investigated the tragic loss of their son," said Jack Landskroner, a lawyer for Mr. Brown's relatives. "They have made no decisions about any legal action at this time."
The government, which took no action against Tesla, cited a September software upgrade that Chief Executive Elon Musk has claimed "very likely" would have prevented the collision, adding he couldn't be certain.
"At Tesla, the safety of our customers comes first, and wWe appreciate the thoroughness of NHTSA's report and its conclusion," the Palo Alto, Calif., company said in a statement.
The probe's conclusion, coming a day before Donald Trump's presidential inauguration, removes a cloud that has hung over Tesla and raised industrywide safety concerns around a race among Silicon Valley stalwarts and traditional auto makers to bring self-driving cars to U.S. roads.
"Our investigation was thorough," NHTSA's Mr. Thomas said. "We had an interest in finishing what we had started. We wanted to leave a clean desk for the next folks."
The probe's findings come amid Mr. Musk's breakneck pace at bringing driverless-car technologies to market, an approach that has drawn concern from traditional auto makers concerned with liabilities and setbacks. The Tesla co-founder has beaten back criticisms that Autopilot, updated multiple times since being released in October 2015, represents a "beta" test that endangers consumers.
Instead, he has forged ahead with the unapologetic claim the technology will save lives. The government's Autopilot probe found the rate of Tesla vehicles crashing fell nearly 40% after the company's automatic steering feature was installed, a conclusion Mr. Musk highlighted on Twitter.
Tesla in October installed new hardware in vehicles that Mr. Musk expects will allow the company's cars to become fully self-driving by the end of this year and aims to reduce crashes by 90% as software improves.
Other companies have taken more conservative approaches to semi-automated technologies and expressed concern that aggressive approaches could erode trust among regulators and consumers, delaying technological breakthroughs. Alphabet Inc.'s self-driving car company has eschewed systems with human interaction altogether amid safety concerns.
The Obama administration in the fall endorsed self-driving cars, citing their promise to increase transportation access to the elderly and disabled, and cut traffic fatalities largely tied to human error. But officials also released a checklist urging companies to certify their technologies are safe before they are deployed.
Tesla and other manufacturers maintain their semiautonomous systems don't render cars fully self-driving, and outline in owners manuals the technologies are designed to assist motorists who must remain in control at all times.
The probe's findings in part buttressed industry disrupters, with regulators pointing to Tesla's data capabilities as key to completing their probe.
Officials also cited Tesla's fall software upgrade, called Autopilot 8.0, that disables automatic steering when motorists ignore repeated warnings to put their hands back on the wheel within an hour. Wireless software updates could eventually fix cars overnight before recall letters hit mailboxes, though companies would still be legally required to alert regulators to defects, said Mr. Thomas, the NHTSA spokesman,
"Can you imagine waking up and in 24 hours, whatever that recall was is completed?" said Mark Rosekind, NHTSA's chief, in an interview last week.
Regulators concluded that Tesla considered drivers misusing Autopilot during development and addressed unreasonable safety risks. But the information on limitations outlined in owners' manuals is "perhaps not as specific as it could be," the investigation found.
Consumer Reports magazine last year urged Tesla to drop the Autopilot name, calling it "potentially misleading and dangerous," and suggested the company better educate drivers on its limitations.
"It's also important to note how a system like Autopilot is named and marketed," Mr. Thomas said. "We are concerned about drivers operating these vehicles having a good understanding of the capabilities and limitations. There are different approaches taken from different manufacturers."
Tesla drivers acknowledge they will treat Autopilot as a driver-assistance system and remain attentive after activating it. Owners' manuals detail limitations, including the potential failure to spot some objects and that the technology is designed for "driving comfort and convenience and is not a collision warning or avoidance system."
Nevertheless, auto makers should design systems with "the inattentive driver in mind," Mr. Thomas said, noting that motorists don't always review owners' manuals. "It's not enough to put it in an owners' manual and hope that drivers will read that and follow it."
U.S. investigators tested Autopilot's automatic emergency brakes against a similar feature in a Mercedes-Benz car, confirming the system helped avoid rear-end collisions but didn't effectively respond to vehicles crossing their paths, according to government documents. But Tesla's system was primarily designed to avoid rear-end crashes is in line with state-of-the-art industry standards, regulators found.
Write to Mike Spector at mike.spector@wsj.com and Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Mike Spector and Tim Higgins
Subject: Fatalities; Defects; Traffic accidents & safety; Electric vehicles; Consumers; Roads & highways; Design; Software upgrading; Automation; Automobile drivers
Location: United States--US Florida
People: Trump, Donald J
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jan 20, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1861669613
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1861669613?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Sues Former Autopilot Director for Improper Recruiting; Suit names Sterling Anderson and Chris Urmson, former CTO of Google's self-driving car effort
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Jan 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Motors Inc. is accusing the former director of its Autopilot program and the former tech guru behind Google's self-driving car of improperly recruiting the auto maker's engineers to create their own autonomous-car startup.
The allegations raised in a lawsuit filed Thursday in California state court in Santa Clara are sure to rock the nascent self-driving car industry that is racing to put automated vehicles on the roadways in the next few years.
Tesla's lawsuit accuses Sterling Anderson of violating his employment contract with the company by trying to recruit at least a dozen engineers and taking "hundreds of gigabytes" of confidential and proprietary information for the benefit of a company he allegedly founded while still at Tesla. Mr. Anderson oversaw the team developing the semiautonomous Autopilot system from November 2015 until this month.
The auto maker also accuses Mr. Anderson's business partner, Chris Urmson, of helping to recruit Tesla workers for their new startup called Aurora. Mr. Urmson is the former chief technology officer of Alphabet Inc.'s Google self-driving effort, now called Waymo.
"Tesla cannot sit idly by when an employee like Anderson abuses his position of trust and orchestrates a scheme to deliberately and repeatedly violate his non-solicit agreement, hide evidence, and take the company's confidential and proprietary information for use in a competing venture," Tesla said in the lawsuit.
When reached for comment, Mr. Anderson emailed a statement attributed to his company, Aurora Innovation LLC, which was also named as a defendant in the suit. "Tesla's meritless lawsuit reveals both a startling paranoia and an unhealthy fear of competition," the statement said. "This abuse of the legal system is a malicious attempt to stifle a competitor and destroy personal reputations. Aurora looks forward to disproving these false allegations in court and to building a successful self-driving business."
Mr. Urmson didn't immediately respond to a request for comment.
The lawsuit sheds new light on behind-the-scenes drama at the company's Autopilot department, which has been under pressure to meet Chief Executive Elon Musk's ambitious goals. Mr. Musk promises Tesla will demonstrate an Autopilot-enabled vehicle capable of driving itself from Los Angeles to New York by year's end.
Following a fatal crash last May in Florida involving Autopilot, Tesla has defended itself against public scrutiny that it rushed out the technology. The company said the technology is safe when properly used.
Last week, the National Highway Traffic Safety Administration closed an investigation into the safety of Autopilot after it didn't find any defect in the design or performance in the system. Autopilot allows some of Tesla's electric cars to steer, brake, cruise and change lanes themselves under certain circumstances.
Other companies, meanwhile, are rushing to develop their own advanced self-driving capabilities. Tesla noted that General Motors Co. acquired San Francisco startup Cruise Automation in a deal last year valued at $1 billion, while Uber Technologies Inc. paid as much as $680 million to acquire Ottomotto LLC , a self-driving tractor-trailer company co-founded by Anthony Levandowski, who helped spearhead Google's car program.
"Anderson and his partners sought to launch a startup that could quickly fetch the same quick money as Cruise Automation and Otto--though by violating the law in doing so," the lawsuit says.
Tesla claims Mr. Anderson and Mr. Urmson first discussed setting up their company last summer. Mr. Urmson left Google in August .
To avoid Mr. Anderson's contractual prohibition of recruiting Tesla employees, the suit claims he gave a list of potential hires to Mr. Urmson. Tesla alleges Mr. Anderson worked "mostly behind-the-scenes" on recruiting but took a hands-on role with some prospective hires.
"Anderson boasted to at least one Tesla engineer who expressed misgivings about the new venture that the scope of hardware development at Aurora would be 'more expansive' than the engineer might expect and, in fact, Aurora had already taken meetings with the heads of what he referred to as 'four of the top five'" auto makers, the lawsuit says.
In December, Mr. Anderson gave notice that he intended to leave but didn't inform Tesla that he was starting a competing venture, according to the suit.
At the same time, the auto maker was racing to complete updates for Autopilot software and heading toward the end of the regulators' investigation. Tesla claims Mr. Anderson agreed to stay with the company through the release of an anticipated Autopilot update to minimize disruption of the team.
On Jan. 3, three of the Tesla engineers recruited by Aurora gave notice that they planned to leave, though one later changed his mind, the suit says.
The next day, according to the suit, Mr. Anderson used a company-issued laptop at Mr. Urmson's house to work on a document titled "Recruiting targets."
As his end-date neared, the suit alleges, Mr. Anderson wiped a company-issued iPhone that would have shown text messages and phone calls soliciting Tesla employees.
Tesla says it fired Mr. Anderson that day, on Jan. 4, more than two years after he began at the company. The suit alleges Mr. Anderson returned the company's laptop but not backups of data he allegedly took from Tesla.
On Jan. 10, Tesla announced it had hired Chris Lattner from Apple Inc. to serve as vice president of Autopilot software. He gained notoriety at Apple for his role in creating Swift, the programming language the tech giant created for apps.
Sara Randazzo contributed to this article.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Startups; Trade secrets
Location: California
People: Musk, Elon
Company / organization: Name: Alphabet Inc; NAICS: 551114; Name: Google Inc; NAICS: 519130; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jan 26, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1861946896
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1861946896?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Sues Ex-Autopilot Director Over Recruiting
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 Jan 2017: B.4.
ProQuest document link
Abstract:
The allegations raised in a lawsuit filed Thursday in California state court in Santa Clara are sure to rock the nascent self-driving car industry that is racing to put automated vehicles on the roadways in the next few years.
Full text: Tesla Motors Inc. is accusing the former director of its Autopilot program and the former tech guru behind Google's self-driving car of improperly recruiting the auto maker's engineers to create their own autonomous-car startup.
The allegations raised in a lawsuit filed Thursday in California state court in Santa Clara are sure to rock the nascent self-driving car industry that is racing to put automated vehicles on the roadways in the next few years.
Tesla's lawsuit accuses Sterling Anderson of violating his employment contract with the company by trying to recruit at least a dozen engineers and taking "hundreds of gigabytes" of confidential and proprietary information for the benefit of a company he allegedly founded while still at Tesla. Mr. Anderson oversaw the team developing the semiautonomous Autopilot system from November 2015 until this month.
The auto maker also accuses Mr. Anderson's business partner, Chris Urmson, of helping to recruit Tesla workers for their new startup called Aurora. Mr. Urmson is the former chief technology officer of Alphabet Inc.'s Google self-driving effort, now called Waymo.
"Tesla cannot sit idly by when an employee like Anderson abuses his position of trust and orchestrates a scheme to deliberately and repeatedly violate his non-solicit agreement, hide evidence, and take the company's confidential and proprietary information for use in a competing venture," Tesla said in the lawsuit.
When reached for comment, Mr. Anderson emailed a statement attributed to his company, Aurora Innovation LLC, which was also named as a defendant in the suit. "Tesla's meritless lawsuit reveals both a startling paranoia and an unhealthy fear of competition," the statement said. "This abuse of the legal system is a malicious attempt to stifle a competitor and destroy personal reputations. Aurora looks forward to disproving these false allegations in court and to building a successful self-driving business."
Mr. Urmson didn't immediately respond to a request for comment.
The lawsuit sheds new light on behind-the-scenes drama at the company's Autopilot department, which has been under pressure to meet Chief Executive Elon Musk's ambitious goals. Mr. Musk promises Tesla will demonstrate an Autopilot-enabled vehicle capable of driving itself from Los Angeles to New York by year's end.
Following a fatal crash last May in Florida involving Autopilot, Tesla has defended itself against public scrutiny that it rushed out the technology. The company said the technology is safe when properly used.
Last week, the National Highway Traffic Safety Administration closed an investigation into the safety of Autopilot after it didn't find any defect in the design or performance in the system. Autopilot allows some of Tesla's electric cars to steer, brake, cruise and change lanes themselves under certain circumstances.
---
Sara Randazzo contributed to this article.
Credit: By Tim Higgins
Subject: Startups; Trade secrets; Engineers; Professional recruitment; Autonomous vehicles
People: Urmson, Chris Anderson, Sterling
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2017
Publication date: Jan 27, 2017
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1862036365
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1862036365?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Elon Musk's Tesla Drops 'Motors' From Name; Auto maker repositions itself after closing of SolarCity deal
Author: Steele, Anne
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Feb 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Elon Musk's Tesla Motors has changed its name to Tesla Inc., as the auto maker repositions itself as an integrated clean-energy company after its tie-up with SolarCity Corp.
Tesla closed its $2.6 billion acquisition of SolarCity in November, combining Mr. Musk's electric-car and solar-energy companies.
Mr. Musk, who was chairman of SolarCity and the largest shareholder of both companies, wants to target customers with solar panels and batteries to let them power their homes and electric cars with clean energy.
Write to Anne Steele at Anne.Steele@wsj.com
Credit: By Anne Steele
Subject: Automobile industry; Energy industry
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Feb 1, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1863727775
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1863727775?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Tesla Shortens Its Name
Author: Steele, Anne
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Feb 2017: B.4.
ProQuest document link
Abstract: None available.
Full text: Elon Musk's Tesla Motors has changed its name to Tesla Inc., as the auto maker repositions itself as an integrated clean-energy company after its tie-up with SolarCity Corp.
Tesla closed its $2.6 billion acquisition of SolarCity in November, combining Mr. Musk's electric-car and solar-energy companies.
Credit: By Anne Steele
Subject: Name changes
Company / organization: Name: Tesla Inc; NAICS: 336999; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2017
Publication date: Feb 2, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1863540763
Document URL: https://login.ezproxy.uta.edu/login?url=https://searc h.proquest.com/docview/1863540763?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Daimler Spends Big To Compete With Tesla; Whatever happens to consumer demand for cars this year, growth comes at an ever higher price
Author: Wilmot, Stephen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Feb 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Mercedes-owner Daimler overtook BMW to make more premium cars than any other manufacturer last year--a long-awaited milestone it didn't fail to trumpet in its annual news conference Thursday . But judging by its budgeting the company now sees Tesla and Uber, rather than its old German rivals, as the key competitive threats.
Management expects revenue and profit to increase again this year, thanks to ongoing growth in China and Europe, a recovery in other emerging markets and a fresh model lineup. Crucially, though, the German industrial giant isn't counting on growth in the free cash flows that fund its big dividends.
The key reason: heavy investment in future technologies, namely electric powertrains, self-driving features, web-connected cars and the smartphone-enabled car-hailing or carpooling services pioneered by Uber. Last year Daimler's investments, including spending on plants and equipment and research and development, totaled [euro]13.5 billion ($14.56 billion)--8.8% of sales and 16% ahead of the 2015 level. This year spending is expected to rise a further 13% to [euro]15.2 billion, and stay at that level in 2018.
Extraordinary growth in China meant Daimler sold 10% more cars world-wide last year. But in the U.S., its second-largest market after China, it sold 3% fewer cars--a shortfall of almost 12,000. Meanwhile, Tesla sold about 29,000 more cars, according to InsideEVs.com. Little wonder Daimler is feeling the electric heat.
This week the company also announced a deal to supply self-driving cars to Uber's platform. Given Daimler's loss-making stakes in rival apps mytaxi and Hailo, this is counterintuitive, but Chief Executive Dieter Zetsche likes to describe Uber as a "frenemy."
On roughly eight times prospective earnings, Daimler's stock, like those of other car traditional car makers, is cheap for a good reason: Whatever happens to car demand in the coming years, growth will come at the price of massive investment in new technology .
Write to Stephen Wilmot at stephen.wilmot@wsj.com
Get financial insights and commentary on global investing from The Wall Street Journal's Heard on the Street team. Subscribe to the podcast.
Credit: By Stephen Wilmot
Subject: Automobile industry; Investments; Budgets; Competition
Location: China United States--US Europe
People: Zetsche, Dieter
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Feb 2, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1863904926
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1863904926?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Elon Musk Says He Steered Friday's White House Talk to Travel Ban; Tesla CEO Elon Musk said he guided the meeting between President Donald Trump and senior business advisers to the travel ban, which is widely unpopular in Silicon Valley.
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Feb 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Billionaire entrepreneur Elon Musk said on Twitter Saturday that he had steered Friday's conversation at the White House between senior executives and President Donald Trump to include the administration's controversial travel restrictions.
"At my request, the agenda for yesterday's White House meeting went from not mentioning the travel ban to having it be first and foremost," Mr. Musk wrote.
The White House had no immediate comment.
Mr. Musk's two tweets Saturday appeared to be an effort to explain his rationale for attending the White House meeting of the president's economic advisory council when the travel ban has been widely criticized by Silicon Valley executives.
Another prominent tech entrepreneur, Uber Technologies Inc.'s Chief Executive Travis Kalanick, said earlier in the week he is stepping down from the advisory council because his participation has been misunderstood as an endorsement of the new administration's policies.
In one of two tweets, Mr. Musk also said he had raised the issue of climate change in Friday's meeting and that he believes his participation "is doing good." He said he would remain on the president's advisory council "and keep at it." He added, "Doing otherwise would be wrong."
Mr. Musk is the chief executive of electric-car maker Tesla Inc. and rocket company Space Exploration Technologies Corp., also known as SpaceX. He is a close associate of Peter Thiel, the tech investor and entrepreneur who backed Mr. Trump during the campaign. Mr. Thiel and Mr. Musk were both founders of payments company PayPal, and Mr. Thiel's venture-capital firm Founders Fund backs SpaceX.
Relations between Mr. Trump and some of the nation's CEOs were shaken earlier this week with the rollout of an executive order barring entry to the U.S. by people from seven majority-Muslim nations out of concerns about the risk of terrorism. The U.S. government said Saturday morning that it had stopped implementing the executive order on immigration and refugees after a federal judge temporarily blocked it late Friday. The government is expected to appeal the judge's ruling.
Businesses that operate internationally and those, like technology companies, that depend on visa holders who work for them in the U.S. were particularly concerned about the ban. Some organized a letter they plan to send to Mr. Trump to express opposition and offer their help in developing an alternative.
In Friday's gathering, Mr. Trump said his administration had "great plans" on issues that affect business.
"We're coming up with a tax bill soon, a health-care bill even sooner," Mr. Trump said, later suggesting that J.P. Morgan Chase & Co. Chief Executive James Dimon, who was seated next to Vice President Mike Pence and opposite the president, was well placed to advise on the future of the Dodd-Frank financial overhaul that Mr. Trump is planning.
Mark Weinberger, the global chairman and CEO of accounting and consulting firm EY and a member of the president's economic advisory council, called Friday's meeting "very action-oriented."
The corporate chiefs told the president that the recent travel ban had disrupted their businesses and that the rollout of the rules had caused confusion, Mr. Weinberger said.
"We're big global businesses. We have people in the U.S. who need to move freely outside the border," as well as people overseas who need to visit the U.S. for business, he said.
The president listened to the feedback and acknowledged the uncertainty about the executive order, Mr. Weinberger said. Mr. Trump has called the travel ban necessary for preventing terrorism. The CEOs agreed but maintained that immigration is good policy for their businesses, Mr. Weinberger said.
"We need to be careful we don't send the wrong signal," he said. "All of our businesses rely on a global economy."
Related Coverage
* Homeland Security Stops Enforcing Trump's Immigrant Order
* Trump Criticizes 'So-Called Judge' Who Lifted Travel Ban
* Group of Companies Consider Joint Letter to Trump Opposing Travel Ban
* Trump Travel Ban Is a Wake-Up Call for Business
Subject: Political campaigns; Bans; Presidents; Councils; Health care policy; Immigration
Location: United States--US
People: Kalanick, Travis Trump, Donald J Musk, Elon
Company / organization: Name: Uber Technologies Inc; NAICS: 511210, 518210; Name: PayPal Inc; NAICS: 522320; Name: Founders Fund; NAICS: 525910; Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Feb 4, 2017
Section: Politics
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1864975392
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1864975392?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-18
Database: The Wall Street Journal
Tesla Makes First Foray Into Middle East; Dubai's gas-guzzling supercars face greener competition
Author: Lohade, Nikhil
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Feb 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: DUBAI--Dubai's gas-guzzling supercars will soon face greener healthier competition.
Tesla Inc.'s co-founder and chief executive, Elon Musk, launched the company's electric vehicles in the United Arab Emirates on Monday. This was the Californian company's first foray in the Middle East, which is potentially a big market for its luxury cars and sport-utility vehicles.
The electric car maker will accept online orders for its Model S sedan and Model X SUV, Tesla said in a statement, deliveries of which are expected to start this summer. It said the launch of its online platform in the U.A.E. would be supported by a pop-up store in the Dubai Mall, with a service center in Dubai expected to open in July. The company will then open a store and service center in Abu Dhabi in 2018.
Tesla is among the world's fastest-growing car manufacturers, with sales rising 27% on the year in the fourth quarter of 2016. It still fell narrowly short of its goal of delivering at least 80,000 vehicles in 2016, mainly due to delays related to new hardware for Autopilot , the semiautonomous driving feature.
Mr. Musk, who is the chairman and largest shareholder of Tesla, has said the company will make 500,000 cars a year by the end of 2018 and 1 million vehicles in 2020.
Dubai and the broader Middle East potentially offer a big market for Tesla's relatively pricey cars.
The emirate and its rich oil-producing neighbors in the Persian Gulf are big buyers of powerful, fancy vehicles every year. That addiction has been helped in large part by heavily subsidized fuel in most of the region.
However, as oil prices have fallen sharply since the middle of 2014, many governments have cut fuel subsidies, which will make gasoline-powered cars more expensive to operate. And many governments, such as Dubai, are also encouraging the use of more environment-friendly cars, such as those made by Tesla.
Tesla also faces challenges. A majority of people in the U.A.E., of which Dubai is a part, and most other Gulf countries are expatriates who prefer cheaper cars that have good resale value. And Tesla needs to deploy charging stations quickly to cater to a region where personal vehicles are still the most popular mode of transport.
Tesla on Monday said prices would start from 275,000 U.A.E. dirhams ($74,850) for Model S and 344,000 dirhams for Model X. The company has already deployed several charging locations in the U.A.E. and will add many more by the end of 2017, it added.
The company is also rushing to complete work on the Model 3, a sedan with a base price tag of $35,000 that will help broaden its cars' appeal to the masses. Production begins mid-2017 and delivery estimates for new reservations are mid-2018 or later, according to the company's website.
Mr. Musk has set ambitious targets for Tesla, especially on deliveries, which will help maintain investor confidence in the company. But he also faces several questions on his projections, be it on car-production output or financial targets.
Mr. Musk unveiled Tesla's plans for the U.A.E. at the high-profile World Government Summit in Dubai this week, according to social media posts. Only local media were invited for the media conference.
Tim Higgins contributed to this article.
Write to Nikhil Lohade at Nikhil.Lohade@wsj.com
Credit: By Nikhil Lohade
Subject: Automobile industry; Electric vehicles
Location: Abu Dhabi United Arab Emirates Middle East United Arab Emirates
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Feb 13, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1867533235
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1867533235?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Makes First Foray Into Middle East; Dubai's gas-guzzling supercars face greener competition
Author: Lohade, Nikhil
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Feb 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: DUBAI--Dubai's gas-guzzling supercars will soon face greener healthier competition.
Tesla Inc.'s co-founder and chief executive, Elon Musk, launched the company's electric vehicles in the United Arab Emirates on Monday. This was the Californian company's first foray in the Middle East, which is potentially a big market for its luxury cars and sport-utility vehicles.
The electric car maker will accept online orders for its Model S sedan and Model X SUV, Tesla said in a statement, deliveries of which are expected to start this summer. It said the launch of its online platform in the U.A.E. would be supported by a pop-up store in the Dubai Mall, with a service center in Dubai expected to open in July. The company will then open a store and service center in Abu Dhabi in 2018.
Tesla is among the world's fastest-growing car manufacturers, with sales rising 27% on the year in the fourth quarter of 2016. It still fell narrowly short of its goal of delivering at least 80,000 vehicles in 2016, mainly due to delays related to new hardware for Autopilot , the semiautonomous driving feature.
Mr. Musk, who is the chairman and largest shareholder of Tesla, has said the company will make 500,000 cars a year by the end of 2018 and 1 million vehicles in 2020.
Dubai and the broader Middle East potentially offer a big market for Tesla's relatively pricey cars.
The emirate and its rich oil-producing neighbors in the Persian Gulf are big buyers of powerful, fancy vehicles every year. That addiction has been helped in large part by heavily subsidized fuel in most of the region.
However, as oil prices have fallen sharply since the middle of 2014, many governments have cut fuel subsidies, which will make gasoline-powered cars more expensive to operate. And many governments, such as Dubai, are also encouraging the use of more environment-friendly cars, such as those made by Tesla.
Tesla also faces challenges. A majority of people in the U.A.E., of which Dubai is a part, and most other Gulf countries are expatriates who prefer cheaper cars that have good resale value. And Tesla needs to deploy charging stations quickly to cater to a region where personal vehicles are still the most popular mode of transport.
Tesla on Monday said prices would start from 275,000 U.A.E. dirhams ($74,850) for Model S and 344,000 dirhams for Model X. The company has already deployed several charging locations in the U.A.E. and will add many more by the end of 2017, it added.
The company is also rushing to complete work on the Model 3, a sedan with a base price tag of $35,000 that will help broaden its cars' appeal to the masses. Production begins mid-2017 and delivery estimates for new reservations are mid-2018 or later, according to the company's website.
Mr. Musk has set ambitious targets for Tesla, especially on deliveries, which will help maintain investor confidence in the company. But he also faces several questions on his projections, be it on car-production output or financial targets.
Mr. Musk unveiled Tesla's plans for the U.A.E. at the high-profile World Government Summit in Dubai this week, according to social media posts. Only local media were invited for the media conference.
Tim Higgins contributed to this article.
Write to Nikhil Lohade at Nikhil.Lohade@wsj.com
Credit: By Nikhil Lohade
Subject: Automobile industry; Electric vehicles
Location: Abu Dhabi United Arab Emirates Middle East United Arab Emirates
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Feb 14, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1867781696
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1867781696?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Tesla Begins Journey Into Mideast
Author: Lohade, Nikhil
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 Feb 2017: B.3.
ProQuest document link
Abstract:
The electric-car maker will accept online orders for its Model S sedan and Model X SUV, Tesla said in a written statement.
Full text: DUBAI -- Dubai's gas-guzzling supercars will soon face greener competition.
Tesla Inc.'s co-founder and chief executive, Elon Musk, launched the company's electric vehicles in the United Arab Emirates on Monday. This was the California company's first foray in the Middle East, which is potentially a big market for its luxury cars and sport-utility vehicles.
The electric-car maker will accept online orders for its Model S sedan and Model X SUV, Tesla said in a written statement. Deliveries are expected to start this summer. It said the launch of its online platform in the U.A.E. would be supported by a pop-up store in the Dubai Mall, with a service center in Dubai expected to open in July. The company will then open a store and service center in Abu Dhabi in 2018.
Tesla is among the world's fastest-growing car manufacturers, with sales rising 27% year-to-year in the fourth quarter of 2016.
Mr. Musk, who is the chairman and largest shareholder of Tesla, has said the company will make 500,000 cars a year by the end of 2018 and one million vehicles in 2020.
Dubai and the broader Middle East potentially offer a big market for Tesla's relatively pricey cars.
The emirate and its rich oil-producing neighbors in the Persian Gulf are big buyers of powerful, fancy vehicles every year. That addiction has been helped in large part by heavily subsidized fuel in most of the region.
However, as oil prices have fallen sharply since the middle of 2014, many governments have cut fuel subsidies, which will make gasoline-powered cars more expensive to operate.
And many governments, such as Dubai, are also encouraging the use of more environment-friendly cars, such as those made by Tesla.
Credit: By Nikhil Lohade
Subject: Automobile industry; Electric vehicles
Location: Abu Dhabi United Arab Emirates Dubai United Arab Emirates United Arab Emirates
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Feb 14, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1867821219
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1867821219?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is proh ibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
The Great Mystery Behind Tesla's Rally; Tesla investors are ignoring significant risks ahead of Wednesday's earnings report, the first to reflect results from SolarCity
Author: Russolillo, Steven
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Feb 2017: n/a.
ProQuest document link
Abstract:
A simple name change masks a much more complex reality for Tesla Inc. Elon Musk's company, which earlier this month dropped "Motors" from its name, will release its first earnings report Wednesday as an integrated auto and clean-energy company. Under generally accepted accounting principles, analysts surveyed by FactSet estimate Tesla lost 97 cents a share in the fourth quarter, compared with a per-share loss of $2.44 in the year-earlier period. Through the third quarter, Tesla...
Full text: A simple name change masks a much more complex reality for Tesla Inc.
Elon Musk's company, which earlier this month dropped "Motors" from its name, will release its first earnings report Wednesday as an integrated auto and clean-energy company. The results come after Tesla closed its $2.1 billion acquisition of SolarCity in November, combining Mr. Musk's electric-car and solar-energy companies.
If an earnings report ever was a black box, this might be it. Tesla has released few details on how it plans to integrate SolarCity into the results. And Wall Street analysts' projections are all over the place. Yet with the stock surging more than 50% since December and again flirting with records, few investors seem to care.
Under generally accepted accounting principles, analysts surveyed by FactSet estimate Tesla lost 97 cents a share in the fourth quarter, compared with a per-share loss of $2.44 in the year-earlier period. Estimates vary widely, from a loss of $2.13 to a loss of 30 cents a share. As recently as September, the consensus was for Tesla to be profitable in the final three months of 2016.
Tesla has only reported a quarterly profit twice on a GAAP basis since going public in 2010. Its profits have fallen short of analysts' expectations for 12 quarters in a row.
Judging by Tesla's share price, investors are more focused on the future and the hype surrounding the Model 3. The mass-market sedan is expected to broaden Tesla's reach beyond SUVs and luxury vehicles. But expectations are lofty. And Tesla doesn't exactly have a pristine track record of meeting its own targets.
Last month Tesla announced it delivered 22,000 cars in the fourth quarter, bringing the year's total to 76,230. That fell short of its guidance of 80,000 deliveries, thanks to what it called "short-term production challenges." Tesla missed its quarterly deliveries guidance three times last year. Even so, it maintains that it wants to build 500,000 vehicles annually by 2018 and 1 million by 2020.
Yet SolarCity's ability to burn through cash shouldn't be ignored. Tesla has already been spending heavily on Model 3 production and its giant battery factory.
Through the third quarter, Tesla had reported 10 consecutive quarters of negative free cash flow, defined as operating cash flow minus capital spending. Its free cash flow turned positive in the third quarter, although that was probably due to a sharp increase in accounts payable.
Analysts now expect Tesla will burn through more cash at least through the middle of this year, in part because of losses at SolarCity. "It is increasingly important that Tesla shows SolarCity will not be a free cash flow drain," RBC Capital Markets analysts wrote to clients.
Tesla already was a risky bet thanks to its rich valuation and execution issues. UBS said it sees "no fundamental reason" behind the stock's rally.
With SolarCity now in the mix, investors are even more susceptible to getting burned.
Credit: By Steven Russolillo
Subject: Financial performance; Investments; Earnings; Capital expenditures
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Feb 21, 2017
column: Ahead of the Tape
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1870368241
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1870368241?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Earnings: What to Watch; Auto maker's fourth-quarter earnings report follow November acquisition of SolarCity
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Feb 2017: n/a.
ProQuest document link
Abstract:
[...]the estimates between analysts vary widely. The $35,000 mid-sized sedan is his bet that he can offer an all-electric car to a broader audience beyond those willing to spend on average $100,000 for the Model S. He has set a July 1 deadline for his suppliers and internal teams to be ready for production. Since the deal closed on Nov. 21, Tesla shares have risen almost 50% yet questions about how Mr. Musk will pull...
Full text: Tesla Inc.'s fourth-quarter financial results are expected to be released after the market closes on Wednesday. Here's what you need to know:
This will be the first time Tesla reports earnings since acquiring SolarCity Corp. in mid-November. The auto maker has done little to guide the market for how to expect results, leading some analysts to exclude the solar panel business from their estimates until greater clarity is provided. As a result, the estimates between analysts vary widely. Ben Kallo, an analyst for Robert W. Baird & Co., told his clients the results could be "noisy."
WHAT TO WATCH:
-MODEL 3: The clock is ticking for CEO Elon Musk to meet his deadline of starting production to bring out the new Model 3 this year. The $35,000 mid-sized sedan is his bet that he can offer an all-electric car to a broader audience beyond those willing to spend on average $100,000 for the Model S. He has set a July 1 deadline for his suppliers and internal teams to be ready for production. Investors will be listening for any information about the status of the Model 3.
-GUIDANCE: Mr. Musk has a history of setting ambitious targets and missing deadlines. Jeffrey Osborn, an analyst for Cowen and Co., wonders if the influence of Chief Financial Officer Jason Wheeler, after about 18 months into his job since coming from Alphabet Inc., will be seen in setting more conservative 2017's targets. "We believe there is potential for the company to issue relatively conservative unit guidance," Mr. Osborn wrote in a Feb. 15 note.
-SOLARCITY: Mr. Musk also faces the challenge of integrating SolarCity into Tesla. He dropped the word "Motors" from the company's name earlier this month as he looks to make a fully integrated company that makes solar powers to generate energy, large batteries for storing that power at home and offices and electric cars that can run on it. Since the deal closed on Nov. 21, Tesla shares have risen almost 50% yet questions about how Mr. Musk will pull off the integration remain. Investors will look for early signs of that work.
-CASH: One of the big knocks against the SolarCity deal was the effect it would have on Tesla's cash pile just as it prepares to introduce the Model 3. Mr. Musk has said he has enough money, though signaled he might raise additional cash through the capital or debt markets. Tesla's guidance in October suggested it planned to spend about $1 billion on capital expenditures in the fourth quarter. Tesla finished September with $3.1 billion in cash.
-0-
Credit: By Tim Higgins
Subject: Financial performance; Deadlines; Electric vehicles; Capital expenditures
Company / organization: Name: Alphabet Inc; NAICS: 551114; Name: Robert W Baird & Co; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Feb 22, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1870624734
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1870624734?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Loss Narrows in Fourth Quarter; Results are first since the company acquired SolarCity
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Feb 2017: n/a.
ProQuest document link
Abstract:
[...]estimates collected by S&P Global Market Intelligence on Tuesday varied widely, with the worst predicting a loss of $2.13 a share and the best calling for a profit of 41 cents per share. Since the deal closed on Nov. 21, Tesla shares have risen almost 50%, yet questions about how Mr. Musk will pull off the integration remain. The inflated market value positions the auto maker to raise more cash, according to a note from...
Full text: Tesla Inc.'s fourth-quarter loss narrowed in its latest quarter, after the company marked its second-best period of sales thanks to the introduction of the Model X sport-utility vehicle.
The Palo Alto, Calif., company reported a loss of $121.3 million, or 78 cents a share, compared with a loss of $320.4 million, or $2.44 a share, a year earlier.
Revenue rose 88% to $2.28 billion, beating analysts' average estimates of $2.2 billion.
Shares of the company rose 1.6% to $277.83 in after-hours trading.
The results include six weeks of SolarCity Corp.'s operations after Tesla acquired the solar-panel company as part of a deal worth more than $2 billion in mid-November.
In October, Chief Executive Elon Musk sounded confident about the final three months of 2016, suggesting Tesla could be profitable on an adjusted basis and even on an unadjusted basis during the period.
But going into Wednesday, analysts were confused about how Tesla would integrate SolarCity into its books, leaving some to leave out the solar panel company's results from estimates. Because of that, estimates collected by S&P Global Market Intelligence on Tuesday varied widely, with the worst predicting a loss of $2.13 a share and the best calling for a profit of 41 cents per share.
Tesla's automotive business was helped by a 27% increase in the sale of Model S sedans and Model X sport-utility vehicles during the quarter compared with a year earlier. The company delivered 22,200 vehicles in the fourth quarter, its second-best.
The sales growth, however, failed to meet Mr. Musk's goal of 50,000 deliveries for the second half of 2016, missing it by about 4,000 vehicles. He had previously attributed the miss to issues with introducing new hardware to the vehicles during the quarter.
Mr. Musk is gearing up to start production of the Model 3 later this year, a $35,000 sedan he says will help take the company's annual production to 500,000 next year from about 84,000 in 2016.
Beyond introducing the Model 3, Mr. Musk faces the challenge of integrating SolarCity into Tesla.
He dropped the word "Motors" from the company's name earlier this month as he looks to build a fully integrated company that makes solar powers to generate energy, large batteries for storing that power at home and offices, and electric cars that can run on it.
Since the deal closed on Nov. 21, Tesla shares have risen almost 50%, yet questions about how Mr. Musk will pull off the integration remain. "We struggle to understand the run-up" of the stock price, Colin Langan, a UBS analyst, wrote to clients on Feb. 15. SolarCity "adds more risk at a time when the company faces aggressive launch targets."
A concern about the deal had been the effects it would have on Tesla's cash pile just at a time when it would need to spend big to prepare to introduce the Model 3. Mr. Musk has said he has enough money, though signaled he could raise additional cash through the capital or debt markets.
Tesla's guidance in October suggested it planned to spend about $1 billion on capital expenditures in the fourth quarter. Tesla finished the quarter with $3.39 billion in cash and equivalents.
The rise in Tesla Inc.'s share price is partly a bet on Mr. Musk, whose entrepreneurial prowess has reached near-mythical status. The inflated market value positions the auto maker to raise more cash, according to a note from Barclays analyst Brian Johnson. He said Tesla may try to raise $2.5 billion.
"The recent run-up in Tesla stock has less to do, in our view, with anything around the near-term financials, and more to do with the nearly superhero status of Elon Musk," Mr. Johnson wrote in a note Wednesday ahead of earnings.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Stock prices; Losses; Capital expenditures; Vehicles
Location: Palo Alto California
Company / organization: Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Feb 22, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1870711310
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1870711310?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or d istribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Drives on the Edge; Tesla's recent stock surge is a gift investors should accept
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Feb 2017: n/a.
ProQuest document link
Abstract:
The electric-car and clean-energy company reported fourth-quarter sales of $2.3 billion and an adjusted loss of 69 cents a share on Wednesday. [...]the dodgy balance sheet, looming electric vehicle competition from traditional manufacturers, and the stock's exorbitant valuation--more than 200 times expected 2018 earnings--mean investors ought to prepare for the day when the market loses faith in Mr. Musk. Get financial insights and commentary on global investing from The Wall Street Journal's Heard on the...
Full text: Despite a furious recent rally , Tesla Inc. is running on fumes.
The electric-car and clean-energy company reported fourth-quarter sales of $2.3 billion and an adjusted loss of 69 cents a share on Wednesday. Sales topped analyst estimates, and the stock price was higher in late trading.
But as usual with Tesla, the future matters more than the recent past. Whether Tesla can meet Chief Executive Elon Musk's ambitious timeline to deliver its mass market Model 3 Sedan will dictate whether the share price can stay high.
Tesla announced it expects to deliver about 50,000 of its older Model X and Model S vehicles in the first half of the year. It also said it expects "volume production" of the Model 3 in the fall, in addition to its new solar roofing product.
That sounds promising, but the prediction comes with some caveats. Tesla has developed a record of delayed product launches , and it warned that even a small shift in production timing could have a "meaningful impact on total deliveries."
The risk for Tesla is running out of fuel to power its growth. Total liabilities now stand at nearly $17 billion compared with $7 billion a year ago, before Tesla's acquisition of SolarCity, Mr. Musk's solar power venture. Meanwhile, total cash and equivalents on hand amount to just $3.4 billion. And while another equity issuance seems likely to boost the cash balance in the near future, that cash is likely to go quickly.
To ramp up production of the Model 3 as promised, Tesla needs to boost capital spending. Tesla's free cash outflow swelled to nearly $1 billion in the quarter, despite lighter capital spending than expected. Spending was light because Tesla has deferred payment on some capital equipment. It says it is negotiating terms with some vendors and hopes to make some payments after production starts.
Dire finances have never troubled shareholders before. Tesla needs to maintain investor confidence to get whatever cash it needs. The latest test is the resignation of the company's chief financial officer on Thursday. He will be replaced by the old CFO, who left in 2015. But the recent stock surge of about 50% since Dec. 1 shows that faith in Mr. Musk will be tough to shake.
Still, the dodgy balance sheet, looming electric vehicle competition from traditional manufacturers, and the stock's exorbitant valuation--more than 200 times expected 2018 earnings--mean investors ought to prepare for the day when the market loses faith in Mr. Musk.
Get financial insights and commentary on global investing from The Wall Street Journal's Heard on the Street team. Subscribe to the podcast.
Credit: By Charley Grant
Subject: Financial performance; Stockholders; Investments
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Feb 22, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1870717450
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1870717450?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Sets Aggressive Production Plan for Model 3; Company also reports 88% revenue increase for the fourth quarter
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Feb 2017: n/a.
ProQuest document link
Abstract:
The Silicon Valley auto maker said Wednesday it is on track to begin production in July on the car, and announced plans to ramp up to 5,000 vehicles a week in the fourth quarter. The $35,000 sedan is part of Mr. Musk's bet to transform Tesla from a luxury car maker into a sustainable energy company that sells electric vehicles to the masses , offers solar power to generate energy, and produces large batteries to...
Full text: Tesla Inc. laid out an aggressive production plan to bring out the new Model 3 sedan by year's end, raising the likelihood the auto maker will need to raise more cash to support the rollout.
The Silicon Valley auto maker said Wednesday it is on track to begin production in July on the car, and announced plans to ramp up to 5,000 vehicles a week in the fourth quarter.
Tesla chief Elon Musk faces intense scrutiny over whether he can debut the Model 3 on time after years of delays. The $35,000 sedan is part of Mr. Musk's bet to transform Tesla from a luxury car maker into a sustainable energy company that sells electric vehicles to the masses , offers solar power to generate energy, and produces large batteries to store that power at home and offices.
Mr. Musk's bold projections have ignited investors' excitement, pushing the company's market value to within reach of Ford Motor Co., which is 100 years older.
Tesla's share price has risen about 50% since the company acquired solar panel maker SolarCity Corp. , where Mr. Musk was also a major shareholder. The inflated market value could help the auto maker raise as much as $2.5 billion, said Barclays analyst Brian Johnson.
Tesla's projections Wednesday came as it reported its fourth-quarter loss narrowed to $121.3 million, a return to red ink after posting its first quarterly profit three months ago. Revenue jumped 88% to $2.28 billion, ahead of analysts' expectations.
Mr. Musk told analysts on a conference call Wednesday that while his plan to bring out the Model 3 doesn't require additional money, the company's cash pile will drop "close to the edge."
"We are considering a number of options, but I think it probably makes sense to raise capital to reduce risk," Mr. Musk said.
Tesla revealed that it spent only about half the $1 billion it projected to spend in the fourth quarter to prepare for production of the Model 3. The company said it shifted some payments with its capital equipment suppliers closer to Model 3 production to secure more favorable terms.
The approach helped Tesla reserve its cash pile, which has concerned investors as Tesla was buying SolarCity just as it would need to spend big to produce the Model 3.
Tesla finished the quarter with $3.39 billion in cash, up from $3 billion three months earlier. Tesla plans to spend between $2 billion and $2.5 billion this year ahead of Model 3 production.
The company said it plans to finalize the location for two or three locations for its massive battery factories, called "gigafactories," later this year. Tesla is finishing its first gigafactory in Nevada , which will have the capacity to make batteries for a million vehicles a year, Mr. Musk has said.
On the call, Mr. Musk reiterated Tesla can build a half-million vehicles next year, and one million in 2020.
Tesla struck a cautionary tone with its 2017 guidance, given the uncertainty of bringing out a new product, limiting its forecast for vehicle sales to the first half. The company expects to sell between 47,000 to 50,000 Model S and Model X vehicles in the period, roughly the same amount as in the previous six months.
A new challenge emerging for Mr. Musk at the assembly plant is the possibility of labor unrest. A worker this month began making the case publicly about why the United Auto Workers union would be beneficial to hourly laborers. Mr. Musk said Wednesday that the UAW is making a "strong effort" to unionize the factory in Fremont, Calif.
Tesla also said its financial chief, Jason Wheeler, is stepping down in April to pursue public policy. Deepak Ahuja, who retired as Tesla's CFO in 2015, will replace Mr. Wheeler.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Financial performance
Company / organization: Name: SolarCity Corp; NAICS: 221114, 238220, 333414; Name: Ford Motor Co; NAICS: 333924, 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Feb 23, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1870762932
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1870762932?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Tesla Sets Targets for Model 3 Production
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]23 Feb 2017: B.3.
ProQuest document link
Abstract:
The $35,000 sedan is part of Mr. Musk's bet to transform Tesla from a luxury-car maker into a sustainable energy company that sells electric vehicles to the masses, offers solar power to generate energy, and produces large batteries to store power at home and offices.
Full text: Tesla Inc. on Wednesday laid out an aggressive production plan for the new Model 3, raising the likelihood the auto maker will need to raise more cash to support the rollout.
The Silicon Valley auto maker said Wednesday it is on track to begin producing the car in July with plans to ramp up to 5,000 vehicles a week in the fourth quarter.
Tesla chief Elon Musk faces intense scrutiny over whether he can deliver the Model 3 on time after years of delays. The $35,000 sedan is part of Mr. Musk's bet to transform Tesla from a luxury-car maker into a sustainable energy company that sells electric vehicles to the masses, offers solar power to generate energy, and produces large batteries to store power at home and offices.
Mr. Musk's bold projections have ignited investors' excitement, pushing the company's market value to within reach of Ford Motor Co., which is 100 years older.
Tesla's share price has risen about 50% since the company acquired solar-panel maker SolarCity Corp., where Mr. Musk was also a major shareholder. The inflated market value could help the auto maker raise as much as $2.5 billion, said Barclays analyst Brian Johnson.
Tesla's projections came as it reported its fourth-quarter loss narrowed to $121 million, a return to red ink after posting its first quarterly profit three months ago. Revenue jumped 88% to $2.28 billion.
Mr. Musk told analysts on a conference call Wednesday that while his plan to bring out the Model 3 doesn't require additional money, the company's cash pile will drop "close to the edge."
Credit: By Tim Higgins
Subject: Automobile industry; Financial performance; Product introduction; Electric vehicles
People: Musk, Elon
Company / organization: Name: SolarCity Corp; NAICS: 238220, 333414, 221114; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Feb 23, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1870836649
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1870836649?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Faces Life After Subsidies In Hong Kong, 'Beacon City' For Electric Cars; Hong Kong, one of Tesla's best markets in the world, is curbing an electric vehicle subsidy, which could prove very painful.
Author: Trivedi, Anjani
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Feb 2017: n/a.
ProQuest document link
Abstract:
[...]in November, Tesla's global sales head, Jon McNeill inaugurated one of Tesla's largest service centers there.Write to Anjani Trivedi at anjani.trivedi@wsj.com Get financial insights and commentary on global investing from The Wall Street Journal's Heard on the Street team.
Full text: A beacon of light has dimmed for Tesla in one of its most promising markets in the world. Navigating in the darkness , without subsidies, will be tough.
Hong Kong has been a playground for Teslas. They are literally everywhere in the tiny territory, thanks to a generous tax subsidy for electric cars. That is all changing. The Hong Kong government announced this week it has capped the tax waiver below what a typical Tesla costs. A basic Tesla Model S used to cost US$73,000. It now costs $119,600. For more expensive models, the increase is even higher .
The government's rationale: if you can buy a Tesla, surely you can afford the tax. Other players like Nissan and Renault, with cheaper electric models, won't be as affected. Hong Kong has been a big proponent of electric cars and has almost 7,500 on its roads. Tesla doesn't disclose sales by country but going by government data, over 90% of electric cars registered in recent months have been Teslas.
Elon Musk visited Hong Kong in January last year, calling it "a beacon city" for electric cars. Then, in November, Tesla's global sales head, Jon McNeill inaugurated one of Tesla's largest service centers there. At the time, local press reported that Tesla was working with regulators to stave off changes to the tax subsidy.
Tesla now says it is disappointed by the government's move, but will continue to support its "owner community" and deliver backlogged orders. Anecdotally, the value of offers on a secondhand Tesla shot up to above that of a new Tesla in Hong Kong.
Going by Tesla's experience in Denmark, where sales fell sharply after subsidies were phased out, Mr. Musk's "big plans" for Hong Kong as said at a public event last year, may have to be revised.
Write to Anjani Trivedi at anjani.trivedi@wsj.com
Get financial insights and commentary on global investing from The Wall Street Journal's Heard on the Street team. Subscribe to the podcast.
Credit: By Anjani Trivedi
Subject: Automobile industry; Automobile sales; Electric vehicles
Location: Hong Kong United States--US Denmark
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Feb 23, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1870928178
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1870928178?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Faces Life After Subsidies In Hong Kong, 'Beacon City' For Electric Cars; Hong Kong, one of Tesla's best markets in the world, is curbing an electric vehicle subsidy, which could prove very painful.
Author: Trivedi, Anjani
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Feb 2017: n/a.
ProQuest document link
Abstract:
[...]in November, Tesla's global sales head, Jon McNeill inaugurated one of Tesla's largest service centers there.Write to Anjani Trivedi at anjani.trivedi@wsj.com Get financial insights and commentary on global investing from The Wall Street Journal's Heard on the Street team.
Full text: A beacon of light has dimmed for Tesla in one of its most promising markets in the world. Navigating in the darkness , without subsidies, will be tough.
Hong Kong has been a playground for Teslas. They are literally everywhere in the tiny territory, thanks to a generous tax subsidy for electric cars. That is all changing. The Hong Kong government announced this week it has capped the tax waiver below what a typical Tesla costs. A basic Tesla Model S used to cost US$73,000. It now costs $119,600. For more expensive models, the increase is even higher .
The government's rationale: if you can buy a Tesla, surely you can afford the tax. Other players like Nissan and Renault, with cheaper electric models, won't be as affected. Hong Kong has been a big proponent of electric cars and has almost 7,500 on its roads. Tesla doesn't disclose sales by country but going by government data, over 90% of electric cars registered in recent months have been Teslas.
Elon Musk visited Hong Kong in January last year, calling it "a beacon city" for electric cars. Then, in November, Tesla's global sales head, Jon McNeill inaugurated one of Tesla's largest service centers there. At the time, local press reported that Tesla was working with regulators to stave off changes to the tax subsidy.
Tesla now says it is disappointed by the government's move, but will continue to support its "owner community" and deliver backlogged orders. Anecdotally, the value of offers on a secondhand Tesla shot up to above that of a new Tesla in Hong Kong.
Going by Tesla's experience in Denmark, where sales fell sharply after subsidies were phased out, Mr. Musk's "big plans" for Hong Kong as said at a public event last year, may have to be revised.
Write to Anjani Trivedi at anjani.trivedi@wsj.com
Get financial insights and commentary on global investing from The Wall Street Journal's Heard on the Street team. Subscribe to the podcast.
Credit: By Anjani Trivedi
Subject: Automobile industry; Automobile sales; Electric vehicles
Location: Hong Kong United States--US Denmark
People: Musk, Elon
Company / organization: Name: Renault SA; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Feb 24, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1871304070
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1871304070?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
What's the Latest Buzz in Electric Cars? Speed, Baby! Tesla and other startups are taking a page from the muscle-car era to kill the notion that electric cars are wimpy, pear-shaped green machines; 'I want my Mommy'
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Feb 2017: n/a.
ProQuest document link
Abstract:
With the January software upgrade of the $135,700 version of the all-electric Model S P100D sedan, Elon Musk's Silicon Valley auto maker Tesla Inc. has claimed bragging rights in an intensifying competition that has become the new obsession--and marketing strategy--among makers of high-end electric cars. Never mind saving the environment, perfecting the lithium-ion battery, or reducing global dependency on fossil fuels. Electric cars have one major advantage over cars with internal combustion engines. Because the delivery of juice to the motor is instantaneous, and the motor reaches maximum power immediately, they have loads of torque and jump off the line with surprising violence--and without making a sound. Tesla and other manufacturers, hoping to shake the image of fuel-efficient vehicles as wimpy, pear-shaped green machines, have taken a page from the muscle-car era of the 1960s. Following that, the Menlo Park, Calif., startup Lucid Motors, which counts former Model S chief engineer Peter Rawlinson among its ranks, demonstrated what its powertrain could do by rigging a Mercedes cargo van--dubbed "Edna"--with its electric motor and batteries. [...]after the first few hundred yards, the Cadillac would draw even and then pull away." [...]hard acceleration, Mr. Lutz said, will draw a lot of energy...
Full text: The white four-door sedan rolled up to the starting line at a racetrack outside Los Angeles this month and lurched to a stop. Then the driver floored the pedal with a thunk.
After 2.275507139 seconds--about the time it takes to pick up a penny from the floor--the sedan had reached 60 miles an hour, faster than any production car since Motor Trend magazine began conducting these tests more than 60 years ago. The previous record of 2.34 seconds belonged to a $1.4 million Ferrari LaFerrari.
After the test, the jubilant chief executive of the company that built this record-smashing beast took to Twitter to report a time of 2.27 seconds. If rounded up, however, the correct figure was 2.28 seconds, as one respondent noted.
"Take out the floor mats and its 2.27," the CEO boasted. For those lusting to go even faster, he offered another weight-saving tip: "Tesla service can remove [the] front trunk liner."
Yes, that's right. The world's quickest production car is a Tesla.
With the January software upgrade of the $135,700 version of the all-electric Model S P100D sedan, Elon Musk's Silicon Valley auto maker Tesla Inc. has claimed bragging rights in an intensifying competition that has become the new obsession--and marketing strategy--among makers of high-end electric cars. Never mind saving the environment, perfecting the lithium-ion battery, or reducing global dependency on fossil fuels. The goal here is gut-busting acceleration.
If the driver pushes a button labeled "Ludicrous"-a nod to the 1987 movie "Spaceballs"--on the Tesla's dashboard screen, a message appears that says: "Are you sure you want to push the limits? This will cause accelerated wear of the motor, gearbox and battery." The two options given are: "No, I want my Mommy," and "Yes, bring it on!"
"If you're looking the wrong way, you get whiplash and your glasses fly off your head," said Brooks Weisblat, 43 years old, a Tesla owner who posts videos of races on his fan website, DragTimes.com, that attract millions of viewers. "You've got old-school, muscle-car guys who cannot handle an electric car beating them."
Electric cars have one major advantage over cars with internal combustion engines. Because the delivery of juice to the motor is instantaneous, and the motor reaches maximum power immediately, they have loads of torque and jump off the line with surprising violence--and without making a sound. Motor Trend said the Model S P100D's acceleration, compared with other cars, is like "the difference between being accidentally pushed by a clumsy person and being aggressively shoved."
Tesla and other manufacturers, hoping to shake the image of fuel-efficient vehicles as wimpy, pear-shaped green machines, have taken a page from the muscle-car era of the 1960s. They have pulled out all the stops--and sometimes even stretched the boundaries of credulity--to post the most eye-popping performance numbers.
Ever since the Model S clocked a zero-to-60 time of 4.4 seconds in 2012, other makers have been fighting to shave hundredths-of-seconds from the mark. The race has escalated in recent months.
In August, Mr. Musk introduced a larger battery that helped the highest-end Model S get to 60 mph in 2.5 seconds. Following that, the Menlo Park, Calif., startup Lucid Motors, which counts former Model S chief engineer Peter Rawlinson among its ranks, demonstrated what its powertrain could do by rigging a Mercedes cargo van--dubbed "Edna"--with its electric motor and batteries. Edna hit 60 mph in 2.74 seconds, according to an Oct. 11 announcement.
In December, the company said it plans to introduce a sedan, targeted for 2019, that can hit 60 mph in less than 2.5 seconds.
About a month after the Edna display, Mr. Musk announced his team was working on an upgrade to its software that would boost the speed of its Model S P100D to 2.4 seconds.
On Jan. 3, Faraday Future, another electric-car startup, introduced its luxury sedan at a glitzy Las Vegas news conference with a zero-to-60 claim of 2.39 seconds. The Los Angeles-area company showed video of its new model, the FF 91, beating a Tesla during a drag race.
"2.39--I like the way that sounds," Peter Savagian, Faraday vice president of propulsion engineering, told the crowd. "It means that, under its own power, the FF 91 accelerates faster than the earth can accelerate if it fell off a cliff--put another way, the FF 91 outruns gravity."
The following week, Mr. Musk posted on Twitter that he thought the upgrade to Tesla's high-end Model S P100D's Ludicrous+ mode could probably allow it to reach 60 mph in 2.34 seconds and--if stripped down--the car could do it in 2.1 seconds.
That's when Motor Trend got involved.
Ahead of testing, Tesla had a request. "They asked our test driver how much he weighed and when they found out he weighed 155 pounds, they said, 'Our figuring has been assuming a 150-pound driver. Can we take the carpet out of the trunk?" Frank Markus, Motor Trend's technical director said.
The response: Nope.
For many years, makers of mainstream hybrids, such as Toyota's Prius, have focused on fuel efficiency. But in the superpremium luxury market, where cars sell for about $100,000 or more, speed rules. Only 8% of new vehicle customers in the U.S. last year said they would be willing to pay extra for a more environmentally friendly vehicle, according to a survey by market researcher Strategic Vision.
"When you talk about performance, we're talking about, 'What is the feel of a vehicle while driving?' And one of the easiest ways to feel that is zero to 60," said Alexander Edwards, president of Strategic Vision.
There is one small problem with marketing electric cars as speed machines, however. Short bursts of acceleration are the thing these cars excel at. As speeds increase, a powerful gas-fueled car will surge ahead. Motor Trend noted that the Ferrari LaFerrari was slower to 60 mph, but hit 70 mph a 10th of a second quicker than the Tesla.
"A Tesla might get a jump off the line against a Cadillac CTS-V," said Bob Lutz, the former vice chairman of General Motors Co. whose long career included developing the Dodge Viper. "But after the first few hundred yards, the Cadillac would draw even and then pull away."
Moreover, hard acceleration, Mr. Lutz said, will draw a lot of energy and reduce an electric car's range.
Motor Trend's Mr. Markus said testers haven't been able to complete a high-speed lap at the 2.2-mile Mazda Raceway Laguna Seca with a Tesla for another reason. "You can't run it that hard for that long ... the battery overheats if you use all of that power," he said. Tesla says it's designed the system to avoid overheating in such situations by decreasing the power available, and that Motor Trend hasn't tested the Model S around that track since the recent improvements.
Motor Trend's testers have even tried icing the battery, Mr. Markus said--to no avail.
Write to Tim Higgins at Tim.Higgins@WSJ.com
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Credit: By Tim Higgins
Subject: Social networks; Automobile industry; Energy efficiency; Power; Electric vehicles; Startups
Location: Los Angeles California
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Feb 24, 2017
Section: Page One
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1871576513
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1871576513?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
What's the Buzz in Electric Cars? It's Speed, Baby! --- Tesla and other startups are taking a page from muscle-car era
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]25 Feb 2017: A.1.
ProQuest document link
Abstract:
With the January software upgrade of the $135,700 version of the all-electric Model S P100D sedan, Elon Musk's Silicon Valley auto maker Tesla Inc. has claimed bragging rights in an intensifying competition that has become the new obsession -- and marketing strategy -- among makers of high-end electric cars. Electric cars have one major advantage over cars with internal combustion engines. Because the delivery of juice to the motor is instantaneous, and the motor reaches maximum power immediately, they have loads of torque and jump off the line with surprising violence -- and without making a sound.
Full text: The white four-door sedan rolled up to the starting line at a racetrack outside Los Angeles this month and lurched to a stop. Then the driver floored the pedal with a thunk.
After 2.275507139 seconds -- about the time it takes to pick up a penny from the floor -- the sedan had reached 60 miles an hour, faster than any production car since Motor Trend magazine began conducting these tests more than 60 years ago. The previous record of 2.34 seconds belonged to a $1.4 million Ferrari LaFerrari.
After the test, the jubilant chief executive of the company that built this record-smashing beast took to Twitter to report a time of 2.27 seconds. If rounded up, however, the correct figure was 2.28 seconds, as one respondent noted.
"Take out the floor mats and its 2.27," the CEO boasted. For those lusting to go even faster, he offered another weight-saving tip: "Tesla service can remove [the] front trunk liner."
Yes, that's right. The world's quickest production car is a Tesla.
With the January software upgrade of the $135,700 version of the all-electric Model S P100D sedan, Elon Musk's Silicon Valley auto maker Tesla Inc. has claimed bragging rights in an intensifying competition that has become the new obsession -- and marketing strategy -- among makers of high-end electric cars. Never mind saving the environment, perfecting the lithium-ion battery, or reducing global dependency on fossil fuels. The goal here is gut-busting acceleration.
If the driver pushes a button labeled "Ludicrous" -- a nod to the 1987 movie "Spaceballs" -- on the Tesla's dashboard screen, a message appears that says: "Are you sure you want to push the limits? This will cause accelerated wear of the motor, gearbox and battery." The two options given are: "No, I want my Mommy," and "Yes, bring it on!"
"If you're looking the wrong way, you get whiplash and your glasses fly off your head," said Brooks Weisblat, 43 years old, a Tesla owner who posts videos of races on his fan website, DragTimes.com, that attract millions of viewers. "You've got old-school, muscle-car guys who cannot handle an electric car beating them."
Electric cars have one major advantage over cars with internal combustion engines. Because the delivery of juice to the motor is instantaneous, and the motor reaches maximum power immediately, they have loads of torque and jump off the line with surprising violence -- and without making a sound. Motor Trend said the Model S P100D's acceleration, compared with other cars, is like "the difference between being accidentally pushed by a clumsy person and being aggressively shoved."
Tesla and other manufacturers, hoping to shake the image of fuel-efficient vehicles as wimpy, pear-shaped green machines, have taken a page from the muscle-car era of the 1960s. They have pulled out all the stops -- and sometimes even stretched the boundaries of credulity -- to post the most eye-popping performance numbers.
Ever since the Model S clocked a zero-to-60 time of 4.4 seconds in 2012, other makers have been fighting to shave hundredths-of-seconds from the mark. The race has escalated in recent months.
In August, Mr. Musk introduced a larger battery that helped the highest-end Model S get to 60 mph in 2.5 seconds. Following that, the Menlo Park, Calif., startup Lucid Motors, which counts former Model S chief engineer Peter Rawlinson among its ranks, demonstrated what its powertrain could do by rigging a Mercedes cargo van -- dubbed "Edna" -- with its electric motor and batteries. Edna hit 60 mph in 2.74 seconds, according to an Oct. 11 announcement. In December, the company said it plans to introduce a sedan, targeted for 2019, that can hit 60 mph in less than 2.5 seconds.
About a month after the Edna display, Mr. Musk said his team was working on an upgrade to its software that would boost the speed of its Model S P100D to 2.4 seconds.
On Jan. 3, Faraday Future, another electric-car startup, introduced its luxury sedan at a glitzy Las Vegas news conference with a zero-to-60 claim of 2.39 seconds. The Los Angeles-area company showed video of its new model, the FF 91, beating a Tesla during a drag race. "2.39 -- I like the way that sounds," Peter Savagian, Faraday vice president of propulsion engineering, told the crowd. "It means that, under its own power, the FF 91 accelerates faster than the earth can accelerate if it fell off a cliff -- put another way, the FF 91 outruns gravity."
The following week, Mr. Musk posted on Twitter that he thought the upgrade to Tesla's high-end Model S P100D's Ludicrous+ mode could probably allow it to reach 60 mph in 2.34 seconds and -- if stripped down -- the car could do it in 2.1 seconds.
For years, makers of mainstream hybrids, such as Toyota's Prius, have focused on fuel efficiency. But in the superpremium luxury market, where cars sell for about $100,000 or more, speed rules. Only 8% of new vehicle customers in the U.S. last year said they would be willing to pay extra for a more environmentally friendly vehicle, according to a survey by market researcher Strategic Vision.
There is one small problem with marketing electric cars as speed machines, however. Short bursts of acceleration are the thing these cars excel at. As speeds increase, a powerful gas-fueled car will surge ahead.
"A Tesla might get a jump off the line against a Cadillac CTS-V," said Bob Lutz, the former vice chairman of General Motors Co. whose long career included developing the Dodge Viper. "But after the first few hundred yards, the Cadillac would draw even and then pull away."
Motor Trend's technical director, Frank Markus, said testers haven't been able to complete a high-speed lap at the 2.2-mile Mazda Raceway Laguna Seca with a Tesla for another reason. "You can't run it that hard for that long . . . the battery overheats if you use all of that power," he said. Tesla says it has designed the system to avoid overheating in such situations by decreasing the power available and noted its battery has been updated since that test.
Mr. Markus said Motor Trend testers have even tried icing the battery -- to no avail.
Credit: By Tim Higgins
Subject: Startups; Electric vehicles; Automobile industry
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2017
Publication date: Feb 25, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: Feature
ProQuest document ID: 1871741827
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1871741827?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla's Elon Musk Sets Sights on Australia--Via Twitter; Musk tweets that battery technology can help solve the country's energy problems, leading to a Sunday phone call with the prime minister
Author: Stewart, Robb M
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Mar 2017: n/a.
ProQuest document link
Abstract:
In a series of Twitter exchanges from his official account in recent days, the Tesla founder offered the company's energy-storage technology and said he had spoken to lawmakers including Prime Minister Malcolm Turnbull. After a telephone conversation Sunday, in which Messrs. Musk and Turnbull agreed to remain in touch, the prime minister's office said they had discussed "the value of storage and the future of the electricity system." Tesla's "gigafactory" near Reno, Nev., mostly produces...
Full text: MELBOURNE, Australia--Tesla Inc.'s Elon Musk has set his sights on Australia, betting his company's battery technology can help solve the country's energy problems and save it from a repeat of the blackouts that struck households and businesses
in the south for several days last year.
In a series of Twitter exchanges from his official account
in recent days, the Tesla founder offered the company's energy-storage technology and said he had spoken to lawmakers including Prime Minister Malcolm Turnbull.
After a telephone conversation Sunday, in which Messrs. Musk and Turnbull agreed to remain in touch, the prime minister's office said they had discussed "the value of storage and the future of the electricity system."
The day before, Mr. Musk tweeted he had spoken with Jay Weatherill, the premier of South Australia state. "Very impressed. Govt is clearly committed to a smart, quick solution," the tweet said. The premier said in a written statement that a conversation about a battery proposal had been positive.
The phone calls came after Mr. Musk responded on Twitter on Friday to Australian software entrepreneur Mike Cannon-Brookes, co-chief executive of Atlassian Corp., saying he was serious about supplying storage systems to South Australia.
The state relies on solar and wind generation for about 40% of its electricity, a higher proportion than any other Australian state.
"Tesla will get the system installed and working 100 days from contract signature or it is free," Mr. Musk's tweet said. In a later tweet, he said Tesla could supply batteries at a price of $250 per kilowatt-hour.
South Australia was hit by a statewide blackout in September after a storm knocked out the transmission system. That led to criticism from Mr. Turnbull and his right-of-center government about the rapid adoption of renewable energy and a turn away from the coal-fired and natural-gas power plants that supply much of Australia's electricity.
On Thursday, the Australian Energy Market Operator projected a shortfall in gas-power electricity generation in the southeastern states as early as next summer if no action is taken.
Mr. Turnbull said in a speech the same day that Australia was losing a competitive advantage underpinned by affordable, reliable energy. Electricity prices for families had doubled over the past decade, and for industrial users had outpaced inflation by a factor of three between 2002 and 2013, Mr. Turnbull said.
"Policy makers have put ideology and politics ahead of engineering and economics, introducing large amounts of variable energy--wind and solar, in particular--without the necessary storage and additional transmission infrastructure," he said.
Energy storage is a small but budding business for Tesla, which makes the bulk of its revenue from selling electric cars. Tesla launched its battery business in 2015, believing it could apply the same ingredients in batteries used in its cars to battery packs that store energy for homes, businesses and utilities.
Tesla's "gigafactory" near Reno, Nev., mostly produces lithium-ion batteries for Tesla automobiles, but a share of the plant's capacity is allocated to battery packs. The company sells both heavy-duty batteries, called Powerpacks, to utilities and companies that supply utilities with energy, and smaller battery packs, called Powerwalls, for homes.
Mr. Musk had estimated revenue from energy storage would grow to as much as $500 million in 2016. But revenue in its energy business--which includes both storage and solar-energy systems from SolarCity Corp., acquired by Tesla last year--totaled under $200 million for the year.
Australia wouldn't be the first such large-scale battery-storage project that Tesla has built quickly. In January, the company unveiled hundreds of refrigerator-size battery packs in Southern California as part of a project to save electricity in the power grid during energy shortages. In just three months, Tesla installed and connected the packs, which can power up to 15,000 homes over four hours, to a Southern California Edison substation.
Cassandra Sweet contributed to this article.
Write to Robb M. Stewart at robb.stewart@wsj.com
Credit: By Robb M. Stewart
Subject: Social networks; Electric utilities; Energy industry
Location: Australia South Australia Australia
People: Turnbull, Malcolm Musk, Elon
Company / organization: Name: Twitter Inc; NAICS: 519130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Mar 12, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1876164355
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1876164355?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-18
Database: The Wall Street Journal
Business News: Tesla Boss Sets Sights on Australia
Author: Stewart, Robb M
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]13 Mar 2017: B.3.
ProQuest document link
Abstract:
In a telephone conversation Sunday, Messrs. Musk and Turnbull agreed to remain in touch; later, the prime minister's office said the men had discussed "the value of storage and the future of the electricity system."
Full text: MELBOURNE, Australia -- Tesla Inc.'s Elon Musk is betting his electric-car company's battery technology can help Australia solve its energy problems and prevent a repeat of the blackouts that struck households and businesses in the south last year.
In a series of Twitter exchanges from his official account, the Tesla founder offered the company's energy-storage technology and said he had spoken to lawmakers, including Prime Minister Malcolm Turnbull.
In a telephone conversation Sunday, Messrs. Musk and Turnbull agreed to remain in touch; later, the prime minister's office said the men had discussed "the value of storage and the future of the electricity system."
The day before, Mr. Musk tweeted he had spoken with Jay Weatherill, the premier of South Australia state.
"Very impressed. Govt is clearly committed to a smart, quick solution," the tweet said. In a statement, the premier said a conversation about a battery proposal had been positive.
The calls came after Mr. Musk on Friday tweeted Australian software entrepreneur Mike Cannon-Brookes, co-chief executive of Atlassian Corp., saying he was serious about supplying storage systems to South Australia.
The state relies on solar and wind generation for about 40% of its electricity, a higher proportion than any other Australian state.
"Tesla will get the system installed and working 100 days from contract signature or it is free," Mr. Musk's tweet said. In a later tweet, he said Tesla could supply batteries at a price of $250 per kilowatt-hour.
South Australia was hit by a statewide blackout in September after a storm knocked out the transmission system. That led to criticism from Mr. Turnbull and his right-of-center government about the rapid adoption of renewable energy and a turn away from the coal-fired and natural-gas power plants that supply much of Australia's electricity.
On Thursday, the Australian Energy Market Operator projected a shortfall in gas-power electricity generation in the southeastern states as early as summer of 2018 if no action is taken.
Mr. Turnbull said in a speech the same day that Australia was losing a competitive advantage underpinned by affordable, reliable energy. Electricity prices for families had doubled over the past decade, and for industrial users had outpaced inflation by a factor of three between 2002 and 2013, Mr. Turnbull said.
"Policy makers have put ideology and politics ahead of engineering and economics, introducing large amounts of variable energy -- wind and solar, in particular -- without the necessary storage and additional transmission infrastructure," he said.
Tesla launched its battery business in 2015. The company sells both heavy-duty batteries, called Powerpacks, to utilities and companies that supply utilities with energy, and smaller battery packs, called Powerwalls, for homes.
Mr. Musk had estimated revenue from energy storage would grow to as much as $500 million in 2016. But revenue in its energy business, which includes both storage and solar-energy systems from SolarCity Corp., acquired by Tesla last year, totaled under $200 million for the year.
Australia wouldn't be the first such large-scale battery-storage project that Tesla has built quickly. In January, the company unveiled hundreds of refrigerator-size battery packs in Southern California as part of a project to save electricity in the power grid during energy shortages. In just three months, Tesla installed and connected the packs, which can power up to 15,000 homes over four hours, to a Southern California Edison substation.
---
Cassandra Sweet contributed to this article.
Credit: By Robb M. Stewart
Subject: Electricity; Batteries
Location: Australia
People: Musk, Elon Turnbull, Malcolm
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Mar 13, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1876332228
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1876332228?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Lucid Motors Looks to Edge Into Electric-Car Contention; The startup says it will produce a sedan that will cost less than Tesla's Model S, but it won't be sold until 2019
Author: Roberts, Adrienne
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Mar 2017: n/a.
ProQuest document link
Abstract:
Chinese-backed startup Lucid Motors is bolstering its pitch to join Silicon Valley's electric-car industry, saying its battery-powered "Air" sedan will come with a lower base sticker price than Tesla Inc.'s popular Model S. The catch: it won't be available until at least 2019. The Air carries a $52,500 base price...
Full text: Chinese-backed startup Lucid Motors is bolstering its pitch to join Silicon Valley's electric-car industry, saying its battery-powered "Air" sedan will come with a lower base sticker price than Tesla Inc.'s popular Model S.
The catch: it won't be available until at least 2019.
By then, similarly-equipped EVs are expected to be more widely available at cheaper prices.
There are several smaller companies looking to break into the electric vehicle market in the U.S., including a cadre of startups based in California and relying on Chinese investments. The electric vehicle market remains small in the U.S., representing less than 1% of sales - much of the growth in U.S. EV sales has been a result of the popularity of Tesla's pricey sedan and SUV.
The Air carries a $52,500 base price after factoring in federal subsidies, or about $8,000 less than the base Model S. Lucid's asking price rivals a BMW AG 5-Series or Mercedes-Benz E-Class.
Lucid said Wednesday it has started taking orders for its electric car, which will have a 240-mile range, or roughly the same distance on a charge as a $30,000 Chevrolet Bolt made by General Motors Co. Tesla aims to sell a "Model 3" that competes in the Bolt's price range later this year.
Getting in line for an Air requires a $2,500 deposit, far more than Tesla charges for a Model 3 reservation. Lucid said it aims to produce 10,000 Air sedans a year , building them in Arizona first for the U.S. market and expanding to Europe and China.
The Menlo Park, Calif., company said drivers will have access to various controls on four screens in the car's cockpit and promises to have features found in a Tesla, including over-the-air software updates and the hardware necessary for autonomous driving.
Formerly called Atieva, Lucid got its start in 2007 as a manufacturer of electric car batteries. The company is led by Peter Rawlinson, the former chief engineer behind the Tesla Model S. It decided to make an electric car three years ago.
Lucid said it has raised more than $200 million from investors including Chinese technology and entertainment company LeEco, Tsing Capital of China, Mitsui & Co., Ltd. of Japan and Venrock of the U.S.
Write to Adrienne Roberts at Adrienne.Roberts@wsj.com
Credit: By Adrienne Roberts
Subject: Automobile industry; Startups; Electric vehicles
Location: China California Arizona Japan Europe
Company / organization: Name: BMW AG; NAICS: 336111, 336991, 423110; Name: General Motors Corp; NAICS : 333415, 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Mar 15, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1877543646
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1877543646?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Raises Additional Funds for Model 3 Debut; Tesla is offering $250 million in common stock and $750 million in convertible notes due in 2022
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Mar 2017: n/a.
ProQuest document link
Abstract:
The Silicon Valley electric-vehicle maker said Wednesday it is offering $250 million in common stock and $750 million in convertible notes to strengthen a fragile balance sheet amid a risky ramp-up of Model 3 production .Deeply indebted and planning to increase production capacity, the company needs a cushion to move ahead in the capital-intensive auto industry.
Full text: Tesla Inc. said it is on track to launch a more affordable car this year, but it needs to raise $1 billion to make sure it happens.
The Silicon Valley electric-vehicle maker said Wednesday it is offering $250 million in common stock and $750 million in convertible notes to strengthen a fragile balance sheet amid a risky ramp-up of Model 3 production . Billed as a cheaper offering by a company known for pricey super cars, the Model 3 is intended to sell in much higher volumes than the current models and compete with more mainstream brands.
Tesla shares gained 2.3% to $261.50 in after-hours trading. Analysts had expected Tesla to seek as much as $2.5 billion in the near-term, citing its inflated market value (which is near Ford Motor Co.'s market capitalization).
Tesla is a perennial money loser, however, notching two profitable quarters since going public early in the decade. Deeply indebted and planning to increase production capacity, the company needs a cushion to move ahead in the capital-intensive auto industry.
Tesla has more than $2 billion due in 2018--a year during which Tesla aims to sell significantly more vehicles than last year. It also plans to continue investing heavily in overhead and product creation in coming years.
The company plans to make 500,000 cars a year by the end of 2018 and 1 million vehicles in 2020. It is a long way off from that mark. Last year, Tesla produced nearly 84,000 vehicles .
Chief Executive Officer Elon Musk signaled the need for more financing last month, a move his company has made several times in recent years even as it has consistently notched year-over-year quarterly revenue increases. Already Tesla's largest shareholder, Mr. Musk intends to buy about 10% of the common stock Tesla will issue in the public offering.
Mr. Musk has laid out plans for more electric models, including heavier-use products, such as a bus-like vehicle, and a pickup truck. With last year's acquisition of SolarCity Corp. , he is laying the groundwork to turn Tesla into a sustainable energy company offering solar power, batteries and electric vehicles.
The Model 3 project has been in the works for several years. The car is expected to debut with a price tag under $40,000 and achieve far more than 200 miles on a charge, and will compete most directly with General Motors Co.'s Chevrolet Bolt.
Tesla's current products -- the Model X and Model S -- challenge Porsche AG, BMW AG and other premium nameplates.
Write to John D. Stoll at john.stoll@wsj.com
Credit: By John D. Stoll
Subject: Automobile industry; Financial performance; Capital expenditures
Location: Palo Alto California
Company / organization: Name: BMW AG; NAICS: 336111, 336991, 423110; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Porsche AG; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Mar 15, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1877579694
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1877579694?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Cash Call: $1 Billion
Author: Stoll, John D
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]16 Mar 2017: B.5.
ProQuest document link
Abstract:
Analysts had expected the company to seek as much as $2.5 billion in the near term, citing its inflated market value, which is near Ford Motor Co.'s market capitalization.
Full text: Tesla Inc. said it is on track to launch a more affordable car this year, but it needs to raise $1 billion to make sure it happens.
The Silicon Valley electric-vehicle maker said Wednesday that it is offering $250 million in common stock and $750 in convertible notes to strengthen a fragile balance sheet amid a risky ramp-up of Model 3 production.
Billed as a cheaper offering by a company known for pricey cars, the Model 3 is intended to sell in much higher volumes than the current models and compete with more mainstream brands.
Tesla's shares gained 2.3% in after-hours trading. Analysts had expected the company to seek as much as $2.5 billion in the near term, citing its inflated market value, which is near Ford Motor Co.'s market capitalization.
Tesla has notched only two profitable quarters since going public early in the decade.
Deeply indebted and planning to increase production capacity, the company needs a cushion to move ahead in the capital-intensive auto industry.
Tesla has more than $2 billion due in 2018, a year during which Tesla aims to sell significantly more vehicles than last year.
It also plans to continue investing heavily in overhead and product creation in coming years.
The company plans to make 500,000 cars a year by the end of 2018 and one million vehicles in 2020. It is a long way off from that mark. Last year, Tesla produced nearly 84,000 vehicles.
Chief Executive Officer Elon Musk signaled the need for more financing last month, a move his company has made several times in recent years even as it has consistently notched year-over-year quarterly revenue increases. Already Tesla's largest shareholder, Mr. Musk intends to buy about 10% of the common stock Tesla will issue in the public offering.
Mr. Musk has laid out plans for more electric models, including heavier-use products, such as a bus-like vehicle, and a pickup truck. With last year's acquisition of SolarCity Corp., he is laying the groundwork to turn Tesla into a sustainable energy company offering solar power, batteries and electric vehicles.
The Model 3 project has been in the works for several years. The car is expected to debut with a price tag under $40,000 and achieve far more than 200 miles on a charge, and will compete most directly with General Motors Co.'s Chevrolet Bolt.
Tesla's current products -- the Model X and Model S -- challenge Porsche AG, BMW AG and other premium brands.
Credit: By John D. Stoll
Subject: Automobile industry; Product introduction; Stock offerings; Capital formation; Electric vehicles; Automobile production
People: Musk, Elon
Company / organization: Name: SolarCity Corp; NAICS: 238220, 333414, 221114; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2017
Publication date: Mar 16, 2017
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1877709405
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1877709405?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Should Fill Its Coffers While It Can; The latest financing ahead of Tesla's Model 3 should be larger
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Mar 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Corrections & Amplifications
Tesla Inc.'s operating cash flow was negative $448 million in the fourth quarter An earlier version of this article incorrectly stated its cash flow was $448 million in that quarter. (March 16, 2017)
A billion dollars isn't what it used to be for Tesla Inc.
The electric-vehicle and clean-energy giant announced plans to raise capital Wednesday afternoon--hardly a surprise. Chief Executive Elon Musk had strongly hinted as much during last month's earnings conference call .
Tesla said the proceeds will be used to "further reduce any risks associated with the rapid scaling of its business" related to the coming Model 3 sedan launch. That, too, is an unsurprising and sensible decision.
The terms, however, ought to cause a double take. Tesla will raise $1 billion, just $250 million of which is in equity with the remainder as convertible debt.
While a lot of money in an absolute sense, Tesla is an ideal candidate to issue as much stock as it can. It had $3.4 billion in cash and equivalents on its balance sheet to start the year, but that money, along with the cash from the offering, is likely to go quickly; Tesla's operating cash flow was negative $448 million in the fourth quarter.
That might not improve in the first quarter, which will be the first full period since Tesla merged with the unprofitable and cash-hungry SolarCity.
Tesla said last month it expects roughly $2 billion to $2.5 billion in capital spending even before the Model 3 enters production, which Mr. Musk says will happen in the middle of this year.
Furthermore, Tesla has nearly $6 billion in long term debt on its balance sheet, $2.4 billion of which matures in the next two years .
Not only can it use some permanent capital but the opportunity to raise it in the stock market has rarely been better. The shares trade at a stratospheric valuation: Tesla's market value of more than $40 billion is near an all-time high. And investors are in a generous mood, seeming not to mind the continued dilution. Shares were solidly higher Thursday morning.
Tesla has used strong demand for its shares and other securities to its advantage for years, having raised capital in every year since its 2010 initial public offering. But there is no guarantee that the capital markets will remain as friendly in the future. While it hasn't exhausted its reservoir of goodwill, Tesla doesn't have a profitable business it can lean on if it does.
Granted, there are things Tesla could do to scale back its cash burn. A more gradual Model 3 rollout effort might moderate the immediate capital spending needs, for instance. But that comes with a trade-off: The Model 3 timeline is a major reason why investors want to hold the stock.
Don't be surprised if Tesla returns to the shareholder well sooner rather than later.
Get financial insights and commentary on global investing from The Wall Street Journal's Heard on the Street team. Subscribe to the podcast.
Credit: By Charley Grant
Subject: Investments; Balance sheets; Capital expenditures
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Mar 16, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1877882349
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1877882349?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Chrysler Pacifica Hybrid Review: The Minivan Goes Gloriously Electric; Chrysler's Pacifica Hybrid, the industry's first plug-in hybrid electric minivan, drives like a Tesla (sort of) and can cost less than its gas-powered twin
Author: Neil, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Mar 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Corrections & Amplifications
The Alliance of Automobile Manufacturers' industry-regulation proposals are known as the One National Program; an earlier version of this article incorrectly gave the name as the One National Standard. The maximum all-electric ranges of the Porsche Cayenne S E-Hybrid and Mercedes-Benz GLE550e are, respectively, 14 and 12 miles; an earlier version of this article incorrectly stated that the maximum ranges of both cars are 16 miles. The Chevrolet Volt is an example of a plug-in hybrid electric vehicle; an earlier version of this article incorrectly referred to it as the Bolt. The comparable gas model to the Pacifica Hybrid Platinum is the Pacifica Limited, which costs $2,500 less than the hybrid; an earlier version of this article incorrectly stated that the gas-equivalent is the Pacifica Premium. (March 23, 2017)
The power output of the Pacifica Hybrid's V6 engine is 248 hp. An earlier version of this article incorrectly stated that the output of the gas engine is 260 hp. (March 27, 2017)
The Trump administration's effort to soften future fuel-economy regulations is a fairly straight-up exchange of regulatory relief for the promise of job repatriation in the domestic automotive sector. I get that. And whether or not those jobs ever show up, it's sort of thrilling to watch the United States embrace Beijing-style central planning.
As for the auto makers' cries that the rule slow-down is necessary to avoid major losses in the industry, with all respect: wolf. They always claim new technology will drive prices up and jobs out--catalytic converters, airbags, anti-lock brakes, stability control. History has invariably shown the opposite.
But the Alliance of Automobile Manufacturers, the industry's lobbying arm, wants more. The ultimate deliverable is what the Auto Alliance calls the One National Standard. Which is to say, they want the Environmental Protection Agency to end California's power to regulate vehicle emissions within its borders.
Particularly irksome to the auto makers is the California Air Resources Board's zero-emissions mandate, which requires manufacturers to build and sell a rising number of advanced-technology vehicles every year, either plug-in hybrid electric vehicles (PHEVs), like the Chevrolet Bolt; battery-electric vehicles (BEVs), like the Tesla Model S and X; or fuel-cell vehicles, like the Honda Clarity.
It's the selling that's been hard, the auto makers say. (Only 158,614 plug-in vehicles sold in the U.S. in 2016.) But such is the intent of the rule: It is the auto makers' job to make advanced-technology vehicles desirable.
And so they have. Somebody should really tell them.
The Chrysler Pacifica Hybrid minivan gets science-fiction fuel economy of 84 MPG-e (gasoline-gallon equivalent of combined fuel and battery energy); delivers 30-plus miles of all-electric range before it resorts to gasoline; and costs the same as its comparably equipped gas-powered twin, the Pacifica Premium ($44,995). Our tester totaled $47,885.
These figures do not include the on-paper fuel-cost savings of $2,500 over five years nor even the available $7,500 federal tax credit, which is quite a thumb on the scales.
Mind you, this is an electric-enhanced premium-content minivan with a V6 engine, tipping the scales at 2.5 tons, with five-star everything, that hits mileage and emission standards as yet undreamt--far beyond what I consider the useless incrementalism of the current federal Corporate Average Fuel Economy (CAFE) requirements.
The Pacifica Hybrid reminds me of what General Patton said after he overran Trier, exceeding his orders from Eisenhower. "Do you want me to give it back?"
The Pacifica Hybrid is a PHEV, like Chevrolet's landmark Volt sedan. A PHEV has two power sources aboard: one electric, with a rechargeable battery (thus the "plug" part of the name); and the other internal-combustion engine. These vehicles are engineered to run in EV mode first and foremost, as long as the battery charge holds out; then if needed, transparently to the occupants, switch over to gasoline power for extended-range driving.
Just to nail this down: The Pacifica Hybrid cannot leave you walking for want of battery charge. It has a gas engine, a big one, too--a naturally aspirated 3.6-liter V6 (248 hp) with stepless variable transmission. But it also has two high-torque electric motors (198 hp combined) sandwiched in the transmission; and a 16-kWh lithium-ion battery pack in the floor, under the mid-row passengers' feet.
The small charger port, located under a flap by the left A pillar, and some graphic flourish in the vehicle's grille, are the only indications that the Pacifica Hybrid is a plug-in vehicle. A full charge takes two hours at a typical 240-volt wall charger, says Chrysler.
So equipped, the Pacifica Hybrid posts one game-changing number: a nominal 33 miles of zero-emission, all-electric range. That range is significant because it exceeds the average American's daily driving miles, Chrysler says. For many consumers the Pacifica Hybrid could virtually zero out the household gas allowance.
The Pacifica Hybrid's long electric legs are big step forward. As a group, the first-gen PHEV's scant EV range was hardly worth the added mass, cost and technical lift. The BMW X5 xDrive40e: 13 miles; Mercedes-Benz GLE550e and Porsche Cayenne S E-Hybrid: 16 miles.
The other challenge for PHEVs is that once the battery is depleted, the vehicle's overall efficiency plummets due to the dead weight of the idle electrics. With the first 100 miles of a charge, the Pacifica Hybrid gets the equivalent of 84 mpg. But even if the battery is depleted, the Pacifica still gets a remarkable 32 mpg combined, operating very much like a gigantic Toyota Prius.
I'm not seeing a downside. The Pacifica Hybrid Platinum is the suburban service animal you would expect: three-row seating with nappa-leather trim; smart brakes and air bags; hands-free sliding doors and liftgate; navigation and keyless entry.... A parent's fondest wish.
Fun fact: The Pacifica Hybrid has a top speed in EV mode of 75 mph. Don't wake the kids.
Our test vehicle was optioned with the company's latest suite of driver aids (parking assistance, 360-degree cameras, active collision-avoidance braking and lane-keeping), plus the dual-screen rear-entertainment system, panoramic sunroof and up to six USB ports. Tell me a parent didn't design this.
Moreover, within its magic 33 miles, the Pacifica Hybrid interacts like an all-electric vehicle, enjoying in full an EV's advantages in performance and refinement, a Tesla Model X with side doors that aren't crazy. Press the Start button. The high-res instrument graphics swirl into view, but you don't hear anything except the climate fans, if they are on. Foot on the brake, rotate the gear selector to D and step on the go pedal. The characteristic surge of electric torque is all there. For a bus, this thing hustles: 0-60 mph in about 8 seconds.
What's not there is a lot of high-frequency electrical noises, the howl and hum from motors and power electronics. Chrysler's tech notes invoke "active noise cancellation" in the cabin as one of the features, and while I had assumed this was to deal with road noise, it certainly seems to have put an extra-thick sock in the electrics. Quietly, fluidly, the Pacifica glides around town, almost incidentally delivering luxury-premium levels of cabin quiet. The nature of the beast, you know.
I suppose it was the wind shear of events. In the same month the auto makers were asserting, in effect, it couldn't be done, I was driving a vehicle that demonstrated it already had.
The Pacifica Hybrid is through and through a California clean-air baby. Fiat Chrysler Automobiles would certainly not have built it had they not first been obliged to by the state of California. But having been obliged, the engineers and designers have built something remarkable, which is usually what happens when you give engineers a challenge.
Funny, I feel like I'm the only one who is celebrating.
Write to Dan Neil at Dan.Neil@wsj.com
2017 Chrysler Pacifica Hybrid
* Base price: $44,995
* Price, as tested: $47,885
* Powertrain: Plug-in gas-electric hybrid vehicle with naturally aspirated Atkinson-cycle 3.6-liter DOHC V6 with variable cam phasing (248 hp/230 lb-ft); dual-traction motors integrated in an electrically variable transmission; 16-kWh lithium-ion battery pack; front-wheel drive.
* Maximum system output: 260 hp (net)
* Length/weight: 203.8 inches/4,987 pounds
* Wheelbase: 121.6 inches
* 0-60 mph: 8 seconds
* Battery recharge: two hours at 240 volts
* EPA fuel economy: 84 MPG-e
Credit: By Dan Neil
Subject: Minivans; Automobile industry; Gasoline; Product design; Emissions; Electric vehicles; Cost control; Energy efficiency; Batteries
Location: Beijing China United States--US California
Company / organization: Name: FCA US LLC; NAICS: 336111, 551112; Name: Environmental Protection Agency--EPA; NAICS: 924110; Name: Alliance of Automobile Manufacturers; NAICS: 541820, 813910; Name: Air Resources Board-California; NAICS: 924110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Mar 23, 2017
column: Rumble Seat
Section: Life
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1880072576
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1880072576?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
How to Beat Tesla? Mercedes and BMW Take Different Roads; Daimler has outperformed BMW in recent years, but the companies' contrasting electric-vehicle strategies could mark a turning point
Author: Wilmot, Stephen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Mar 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: For two companies that make similar products in similar numbers, BMW and Daimler are placing radically different bets on the future of the car.
The popularity of Tesla's cars among rich and status-seeking Americans, historically among the German companies' best customers, spurred them into announcing new electric-vehicle strategies last year. Both now expect electrified cars--whether pure battery-electric cars or plug-in hybrids that combine old and new technologies--to account for between 15% and 25% of unit sales in 2025. Both use anagrammatic acronyms to describe the industry's technological challenges: Daimler talks of "CASE" (connected, autonomous, shared and service, electric); BMW prefers "ACES" (ditto, reordered).
But move from the boardroom to the factory, where the money is made or lost, and the strategies diverge.
The watchword of BMW's annual press and investor conferences this month was flexibility in the face of an uncertain future. One key feature of this approach is the development of a so-called platform--essentially a blueprint for undercarriage manufacture --common to both electric and conventional vehicles. Daimler, on the other hand, is investing headlong in a dedicated electric-vehicle platform. Of the up to [euro]10 billion the company has said it would spend on its electric-vehicle project by 2025, analysts expect roughly half to go toward developing new products and half to fund the common platform.
The world's leading premium car specialists sit on opposing sides of the old tech wisdom: Invest too early and you lose money; invest too late and you lose the market. Daimler is holding itself hostage to fortune: Its margins could be eroded by underused capacity if demand for electric vehicles doesn't materialize. For BMW, analysts at UBS see the risk that Daimler and Tesla use their dedicated platforms to come up with better products at a lower cost, once the sector booms.
History offers a dual perspective on this debate. Over a 30-year period BMW has generated a return to investors more than six times as much as Daimler's. Disciplined capital management is one key reason: While Daimler wasted money on Chrysler and smart, BMW grew carefully into ever more product categories.
But the tables seem to have turned since the 2009 recession. BMW spent billions of euros developing its slow-selling electric i3 model--the scars of which are evident in management's caution today--while Daimler's Mercedes-Benz brand has enjoyed a new lease of life. Last year consumers globally bought more Mercedes than BMWs for the first time in over a decade, and over five years Daimler has now delivered better return to shareholders.
Most analysts expect the more recent trend to continue, with Daimler outperforming thanks to the newer, trendier Mercedes product range. But investors need to be mindful of a possible reversal. The truth won't out for many years, but Daimler's big bet on electric vehicles in retrospect might look like another example of the car's inventor overplaying its hand.
Write to Stephen Wilmot at stephen.wilmot@wsj.com
Get financial insights and commentary on global investing from The Wall Street Journal's Heard on the Street team. Subscribe to the podcast.
Credit: By Stephen Wilmot
Subject: Automobile industry; Product development; Electric vehicles
Company / organization: Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930; Name: Daimler AG; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Mar 24, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1880357093
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1880357093?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Elon Musk Launches Neuralink to Connect Brains With Computers; Startup from CEO of Tesla and SpaceX aims to implant tiny electrodes in human brains
Author: Winkler, Rolfe
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Mar 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Building a mass-market electric vehicle and colonizing Mars aren't ambitious enough for Elon Musk. The billionaire entrepreneur now wants to merge computers with human brains to help people keep up with machines.
The founder and chief executive of Tesla Inc. and Space Exploration Technologies Corp. has launched another company called Neuralink Corp., according to people familiar with the matter. Neuralink is pursuing what Mr. Musk calls "neural lace" technology, implanting tiny brain electrodes that may one day upload and download thoughts.
Mr. Musk has taken an active role setting up the California-based company and may play a significant leadership role, according to people briefed on Neuralink's plans, a bold step for a father of five who already runs two technologically complex businesses.
Mr. Musk didn't respond to a request for comment. Max Hodak, who said he is a "member of the founding team," confirmed the company's existence and Mr. Musk's involvement. He described the company as "embryonic" and said plans are still in flux but declined to provide additional details. Mr. Hodak previously founded Transcriptic, a startup that provides robotic lab services accessible over the internet.
Mr. Musk, 45 years old, is part businessman, part futurist. He splits his time between Tesla, which is under pressure to deliver its $35,000 sedan on time, and SpaceX, which aims to launch a satellite-internet business and a rocket that can bring humans to Mars. He is also pushing development of a super high-speed train called Hyperloop.
Somewhere in his packed schedule, he has found time to start a neuroscience company that plans to develop cranial computers, most likely to treat intractable brain diseases first, but later to help humanity avoid subjugation at the hands of intelligent machines.
"If you assume any rate of advancement in [artificial intelligence], we will be left behind by a lot," he said at a conference last June.
The solution he proposed was a "direct cortical interface"--essentially a layer of artificial intelligence inside the brain--that could enable humans to reach higher levels of function.
Mr. Musk has teased that he is developing the technology himself. "Making progress [on neural lace],"
he tweeted last August, "maybe something to announce in a few months." In January he tweeted that an announcement
might be coming shortly.
He hasn't made an official announcement, but Neuralink registered in California as a "medical research" company last July.
Mr. Musk has discussed financing Neuralink primarily himself, including with capital borrowed against equity in his other companies, according to a person briefed on the plans.
Neuralink has also discussed a possible investment from Founders Fund, the venture firm started by Peter Thiel, with whom Mr. Musk co-founded payments company PayPal, according to people familiar with the matter.
In recent weeks, Neuralink hired leading academics in the field, according to another person familiar with the matter. They include Vanessa Tolosa, an engineer at the Lawrence Livermore National Laboratory and an expert in flexible electrodes; Philip Sabes, a professor at the University of California in San Francisco, who studies how the brain controls movement; and Timothy Gardner, a professor at Boston University who is known for implanting tiny electrodes in the brains of finches to study how the birds sing.
Reached by phone, Dr. Gardner confirmed he is working for Neuralink, but declined to elaborate on its plans. Dr. Sabes declined to comment. Dr. Tolosa didn't respond to a request for comment.
It is unclear what sorts of products Neuralink might create, but people who have had discussions with the company describe a strategy similar to SpaceX and Tesla, where Mr. Musk developed new rocket and electric-car technologies, proved they work, and is now using them to pursue more ambitious projects.
These people say the first products could be advanced implants to treat intractable brain disorders like epilepsy or major depression, a market worth billions of dollars. Such implants would build on simpler electrodes already used to treat brain disorders like Parkinson's disease.
If Neuralink can prove the safety and efficacy of its technology and receive government approval, perhaps it then could move on to cosmetic brain surgeries to enhance cognitive function, these people say. Mr. Musk alluded to this possibility in his comments last June, describing how humans struggle to process and generate information as quickly as they absorb it.
"Your output level is so low, particularly on a phone, your two thumbs just tapping away," he said. "This is ridiculously slow. Our input is much better because we have a high bandwidth visual interface into the brain. Our eyes take in a lot of data."
Others pursuing the idea include Bryan Johnson, the founder of online payments company Braintree, who plans to pump $100 million into a startup called Kernel, which has 20 people and is pursuing a similar mission.
Mr. Johnson said he has spoken to Mr. Musk and that both companies want to build better neural interfaces, first to attack big diseases, and then to expand human potential.
Facebook Inc. has posted job ads for "brain-computer interface engineers" and other neuroscientists at its new secret projects division. And the Defense Advanced Research Projects Agency is investing $60 million over four years to develop implantable neural interface technology
.
The technology faces several barriers. Scientists must find a safe, minimally invasive way to implant the electrodes, and a way to keep them stable in the brain. It also isn't yet possible to record the activity of millions of the brain's neurons to decode complex decisions, or distinguish when someone wants to eat a bowl of spaghetti or go to the bathroom.
Then there is persuading people to get elective brain surgery.
In comments published by Vanity Fair on Sunday, Mr. Musk said "for a meaningful partial-brain interface, I think we're roughly four or five years away."
If Mr. Musk indeed takes an active leadership role at Neuralink, that would raise more questions about his own personal bandwidth.
Tesla is building the largest battery factory on the planet to supply its forthcoming Model 3 electric vehicle, and it will need to produce hundreds of thousands of cars to meet its goal and justify its lofty market capitalization, which is approaching that of Ford Motor Co.
SpaceX has struggled to launch rockets fast enough to send satellites into orbit for its customers. Ultimately it wants to launch an internet-access business powered by more than 4,000 low-earth orbiting satellites, ferry space tourists to the moon and then bring astronauts to Mars.
Even so, Mr. Musk has proved many naysayers wrong. Traditional auto makers said he could never sell a popular electric car. Military-industrial graybeards scoffed at the idea he could even launch a rocket.
Write to Rolfe Winkler at rolfe.winkler@wsj.com
Credit: By Rolfe Winkler
Subject: Automobile industry; Computers; Internet; Transplants & implants; Electrodes; Artificial intelligence; Brain research; Startups; Electric vehicles; Mars; Engineers
Location: California
People: Musk, Elon
Company / organization: Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Mar 27, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1881307727
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1881307727?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-18
Database: The Wall Street Journal
China's Tencent Buys 5% Stake in Tesla; The internet firm's passive stake was amassed in a stock sale earlier this month
Author: Steele, Anne
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Mar 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tencent Holdings Ltd. has bought a 5% stake in Tesla Inc., making China's most valuable company one of the largest owners of Elon Musk's cash-hungry electric car maker.
The internet giant paid about $1.8 billion to take the stake in Tesla this month, according to a filing, amid Mr. Musk's recent push to raise money. The move puts Tencent among the biggest owners of Tesla's shares, according to the latest publicly available data.
Tencent bought the shares through a combination of an offering of stock by Tesla on March 17 and open-market purchases, according to the filing. Tencent's stake is passive, meaning it likely isn't seeking to agitate Tesla for changes or seek board seats.
"Tesla is a global pioneer at the forefront of new technologies," a Tencent spokesperson said Tuesday. "Tencent's success is partly due to our record of backing entrepreneurs with capital; Elon Musk is the archetype for entrepreneurship, combining vision, ambition, and execution."
Tesla declined to comment.
Shares of Tesla, which have risen 26% so far this year, climbed 1.6% premarket to $274.60.
Earlier this month, Tesla made moves to strengthen its fragile balance sheet amid a risky ramp-up of Model 3 production. At the time, it said it was offering $250 million in common stock and $750 million in convertible notes.
The $35,000 Model 3 sedan is part of Mr. Musk's bet to transform Tesla from a luxury car maker into a sustainable energy company that sells electric vehicles to the masses, offers solar power to generate energy, and produces large batteries to store that power at home and offices.
The Silicon Valley company--which is unprofitable and deeply indebted--plans to begin Model 3 production in July , and ramp up to 5,000 vehicles a week in the fourth quarter. But the cost has been high, and Tesla needs a cushion to move ahead in the capital-intensive auto industry. The company has more than $2 billion of debt due in 2018--a year during which it aims to sell significantly more vehicles than last year. It also plans to continue investing heavily in overhead and product creation in coming years.
Tesla recently closed its $2.6 billion acquisition of SolarCity, combining Mr. Musk's electric-car and solar-energy companies, and dropped "Motors" from its name as it repositions itself as a clean-energy company.
Tencent's investment in Tesla marks the highest-profile foray into the autos sector for the Chinese internet giant. Big Chinese tech companies have backed a wave of green-car startups in the country recently, with Tencent supporting smaller outfits such as NextEV and Future Mobility Corp.
Tencent, while little known outside China, is the world's largest game publisher by revenue. It owns "League of Legends" developer Riot Games Inc. and last year teamed up with Chinese investors in an $8.6 billion acquisition of Supercell Oy, the Finnish maker of "Clash of Clans."
Within China, the Shenzhen-based company is known for its social-media platforms WeChat and Weixin, which together have close to 890 million monthly active users and are fixtures in Chinese daily life.
Tencent has been on a tear of late, with shares surging more than 40% over the past year, thrusting it ahead of e-commerce giant Alibaba Group Holding Ltd. and Industrial and Commercial Bank of China, the world's biggest bank by assets.
Write to Anne Steele at Anne.Steele@wsj.com
Credit: By Anne Steele
Subject: Automobile industry
Location: China
People: Musk, Elon
Company / organization: Name: Tencent Holdings Ltd; NAICS: 517210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Mar 28, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1881427264
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1881427264?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tencent Makes It Harder to Bet Against Tesla; Tencent's purchase of a 5% stake in Tesla makes skeptics' case against the electric-car pioneer tougher
Author: Grant, Charley; Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Mar 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: A $1.8 billion investment in Tesla Inc. isn't chump change, even for one of China's most valuable companies, Tencent Holdings. But what does it mean for the electric-car pioneer?
If one takes the view that the market is generally right, then seeing the money-losing company's value briefly past that of 113 year-old Ford Motor, the world's fifth-largest auto maker, suggests it opens up vast new possibilities for Tesla. Cynics, on the other hand, see a star-struck Asian company pouring cash into a late-stage American bubble as so many others have before it.
As with Elon Musk's business ventures themselves, the gulf between hype and reality is enormous. The truth lies somewhere in between, but probably toward the less exciting end of the spectrum.
Tencent's investment certainly shouldn't be dismissed as the company simply trying to be one of China's cool kids. Rivals Baidu and Alibaba Group Holding also have invested in autonomous vehicle ventures back home.
Given the rapid convergence between various technologies, the notion that a Chinese person may one day use Tencent's WeChat app to order an autonomous electric taxi from Didi Chuxing (China's answer to Uber, in which Tencent also has an investment) is plausible. The odds of that vehicle being a Tesla, though, look slim given China's policy of supporting its domestic electric-car industry.
Tencent, like many Chinese companies, prefers to spread its bets around and probably sees its investment as the basis for possible future cooperation, yet it implies no further commitment. And the funds it plowed into Tesla shares don't represent fresh cash for the company beyond its already announced $1.2 billion capital raise.
That amount is less than what Tesla needs to develop the Model 3 sedan on which its valuation rests. Tesla has said it expects between $2 billion and $2.5 billion on capital spending this year before the Model 3 starts production. The company also has $2.4 billion in long-term debt maturities over the next two years, at a time when operating cash flow is persistently negative.
Yet, even if Tencent doesn't put another dime into Tesla and potential synergies come to naught, Tuesday's investment slightly increased the auto maker's chances of success. That is because Tesla will have to return to the equity market many times in the future for billions, and possibly tens of billions, of dollars. Tencent's vote of confidence, like any boost to Tesla's share price, means that future capital calls will be less dilutive.
Given the onslaught of competition and execution risk, though, the weight of the evidence still argues strongly against Tesla being worth $46 billion or anything close to it, even if it raises enough cash to make the Model 3 a mass-market vehicle.
But actively making a bet against the stock is another matter. Even before Tencent took its stake, Tesla's top five shareholders collectively owned 53% of the company. Such concentrated ownership meant its stock was prone to surges when it merely hopped over financial bars that the company had recently lowered. Now another 5% of the stock is basically removed from the market.
Tesla's 30% gain so far this year has cost short sellers a pretty penny.
Write to Charley Grant at charles.grant@wsj.com and Spencer Jakab at spencer.jakab@wsj.com
Credit: By Charley Grant and Spencer Jakab
Subject: Automobile industry; Investments; Capital expenditures
Location: China
People: Musk, Elon
Company / organization: Name: Didi Chuxing; NAICS: 518210; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Mar 28, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1881505564
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1881505564?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tencent: Big in China, Looking Abroad; Chinese firm's stake in Tesla marks its latest move to buy into Western companies
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Mar 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: HONG KONG--Tencent Holdings Ltd. is the most valuable company in China, but its $1.8 billion investment in Tesla Inc. highlights ambitions beyond its home turf and the social-media and videogame businesses for which it is best known.
In China, Tencent is a behind-the-scenes fixture of daily life. The company's WeChat, known in the country as Weixin, has 889 million monthly active users world-wide who trade messages, order and pay for meals, book vacations and more through the social-media platform.
Outside the country, Tencent has plowed money into Western game makers. It has majority stakes in companies behind two of the most popular games today: "League of Legends" from U.S.-based Riot Games Inc. and "Clash of Clans" from Finland's Supercell Oy.
It also has smaller, noncontrolling stakes in other U.S. companies, including the game makers Glu Mobile Inc. and Pocket Gems Inc., as well as the website publisher Weebly Inc.
Still, Tencent remains little known in the U.S., despite keeping an office dedicated to gaming in the Silicon Valley hub of Palo Alto, Calif. One possible reason is Tencent takes a low-key approach when investing abroad.
The company tends to buy into established companies that can operate independently, said Hans Tung, managing partner at the $3.8 billion U.S.-Chinese investment firm GGV Capital, which doesn't have a relationship with Tencent.
Looking at its deals, Tencent seems to prefer self-sufficient companies that are established in their own industry, Mr. Tung said.
With Tesla, Tencent likely has bigger ambitions--even if those goals aren't fully clear yet. In a tweet Tuesday , Tesla Chief Executive Elon Musk described Tencent not only as an investor but an adviser. Tencent President Martin Lau said in a tweet that the company shares Tesla's vision to create "a better future for the planet."
One possibility is the investment opens a door for Tesla to expand in China, Mr. Tung said. The U.S. auto maker's electric vehicles already are hugely popular in Hong Kong. After sealing a deal with Supercell, Tencent began distributing the company's games in the China.
The investment also could allow Tesla and Tencent to share technology, Mr. Tung said. That potentially stands to bolster Tencent's existing investments in electric and autonomous vehicles, an area of growing interest for Chinese technology companies. While Tencent's investment in Tesla is its highest-profile foray into the autos sector, it already has supported smaller next-generation vehicle outfits such as NextEV and Future Mobility Corp.
For now, gaming remains Tencent's best-known businesses. Its acquisition of Supercell helped cement the company's position as the largest videogame publisher in the world by revenue.
Last week, Tencent posted a 47% rise in profit for the December quarter. Its shares have surged 43% in the past year, putting its market value at roughly $280 billion--bigger than rival Alibaba Group Holding Ltd.
Credit: By Dan Strumpf
Subject: Automobile industry; Vehicles
Location: China Hong Kong United States--US Finland
People: Musk, Elon
Company / organization: Name: GGV Capital; NAICS: 523910; Name: Tencent Holdings Ltd; NAICS: 517210; Name: Weebly Inc; NAICS: 518210; Name: Pocket Gems Inc; NAICS: 511210; Name: Glu Mobile Inc; NAICS: 511210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Mar 28, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1881531812
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1881531812?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tencent Backs Tesla With $1.8 Billion Stake
Author: Higgins, Tim; Steele, Anne
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Mar 2017: A.1.
ProQuest document link
Abstract:
Tencent's investment in Tesla is the latest -- and highest-profile -- foray into the auto sector for big Chinese tech companies, which have recently backed a wave of Silicon Valley green-car startups, including NextEV Ltd. and Lucid Motors Inc. Tencent acquired the stake through a combination of a recent stock offering by Tesla and shares purchased on the open market, according to a securities filing Tuesday.
Full text: Tesla Inc. gained a potential ally in China after the country's most valuable company, Tencent Holdings Ltd., revealed it had bought a 5% stake in the Silicon Valley electric-vehicle maker.
The $1.8 billion investment marks a vote of confidence in Tesla Chief Executive Elon Musk, who is facing questions by analysts about whether he can meet his ambitious goals of delivering the $35,000 Model 3 sedan on time later this year and at the scale he has projected.
In a tweet Tuesday, Mr. Musk said he was "glad to have Tencent as an investor and advisor to Tesla," suggesting a possible deeper relationship between the companies could come. Tesla declined further comment.
Best known for its ownership of China's largest social network, WeChat, Tencent could play an instrumental role in helping Tesla set up a manufacturing operation in China, said Michael Dunne, a longtime auto-industry consultant who spent years in the country. Tencent and Foxconn Technology Group, best known for manufacturing Apple Inc.'s iPhones, are investors in a startup called Future Mobility Corp., which aims to make its own electric vehicles by 2020.
"This is highly significant," Mr. Dunne said of Tencent's new investment.
China is the world's largest auto market and an important one for luxury-car makers. Tesla has held discussions with the government in the past about assembly in China, and Mr. Musk has said local production of vehicles in the country could cut the sales price of Tesla vehicles by one-third, with savings from items such as import duties.
"Tencent's success is partly due to our record of backing entrepreneurs with capital," a Tencent spokeswoman said Tuesday. "Elon Musk is the archetype for entrepreneurship, combining vision, ambition and execution."
Tencent's investment in Tesla is the latest -- and highest-profile -- foray into the auto sector for big Chinese tech companies, which have recently backed a wave of Silicon Valley green-car startups, including NextEV Ltd. and Lucid Motors Inc.
Tencent acquired the stake through a combination of a recent stock offering by Tesla and shares purchased on the open market, according to a securities filing Tuesday. Tencent's stake is passive, meaning the company likely isn't seeking board seats or agitating for change.
Mr. Musk, who is also chairman, remains Tesla's largest shareholder, with about 20% of the company.
Tesla's revenue in China more than tripled last year to $1.07 billion -- a faster rate of growth than in the U.S., where sales about doubled to $4.2 billion. China made up 15% of Tesla's $7 billion in revenue last year, compared with about 8% in 2015. The U.S. accounted for 60% of the company's 2016 revenue, up from 48% in 2015.
Tesla has been looking to grow bigger rather than reduce costs, and remains unprofitable and deeply indebted. The company plans to begin production of its Model 3 sedan in July and ramp up to 5,000 vehicles a week in the fourth quarter.
But the cost of expanding production has been high, and Tesla needs a cushion to move ahead in the capital-intensive auto industry. Tesla finished 2016 with $8.59 billion in outstanding debt, according to S&P Capital IQ data. That was before the new debt offering this month.
Earlier this month, Tesla moved to strengthen its fragile balance sheet. At the time, it said it was offering $250 million in common stock and $750 million in convertible notes.
Shares of Tesla, which have surged 26% this year, rose 2.7% Tuesday in New York. With a market value of about $45.3 billion, according to FactSet, Tesla is approaching Ford Motor Co. to become the second-most valuable car maker in the U.S. Ford's market value stood at about $46.3 billion, behind leader General Motors Co. with about $52 billion.
Tesla's rise underscores the premium that investors are placing on Silicon Valley's bold attempt to loosen traditional auto makers' grip on personal transportation.
Tech giants, including Alphabet Inc. and Uber Technologies Inc., are investing heavily in technology that one day could remove drivers from vehicles and open new ways of making money off transportation.
The Model 3 launch is part of Mr. Musk's bet to transform Tesla from a luxury car maker into a company that offers a mass-market electric vehicle, along with solar panels to generate energy to power its vehicles, and batteries to store that power at home and offices.
Tesla closed its $2.6 billion acquisition of SolarCity in November, combining Mr. Musk's electric-car and solar-energy companies, and dropped "Motors" from its name to signal it is more than just a car company.
---
Dan Strumpf contributed to this article.
Credit: By Tim Higgins and Anne Steele
Subject: Automobile industry; Startups; Equity stake
Location: China
Company / organization: Name: Tesla Inc; NAICS: 336999; Name: Tencent Holdings Ltd; NAICS: 517210
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2017
Publication date: Mar 29, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1881641516
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1881641516?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tencent Hits a Speed Bump With Tesla; Chinese tech giant's $1.8 billion stake in U.S. electric-vehicle company looks wasteful
Author: Wong, Jacky
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Mar 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: China's most valuable company, Tencent, has become global tech giant in less than two decades thanks to its dominance of China's computer gaming industry and the phenomenal success of its instant messaging app WeChat. So its $1.8 billion investment in electric-vehicle maker Tesla for a 5% stake is a bit of a head-scratcher.
There's an element of 'me too' about this. Tencent is often grouped with search-engine company Baidu and e-commerce giant Alibaba as the holy trinity of Chinese tech. The latter two have already made strides in electric vehicles: Baidu, aims to roll out commercially viable autonomous vehicles next year, while Alibaba is developing "internet-connected cars" in a joint venture with local car maker SAIC. The three companies have all invested in Didi Chuxing, China's successful answer to Uber.
Tencent itself has invested in several domestic electric-vehicle startups. It's a backer of Shanghai-based NextEV, which is aiming to bring its autonomous electric vehicles to the U.S. by 2020.
But it's unclear how taking a minority stake in Tesla, with no specific plans for joint ventures or other projects with the Elon Musk-run outfit, will help Tencent crack the electric-vehicle scene. Mr. Musk may hope Tencent will aid Tesla in navigating the Middle Kingdom , but Beijing has a bias toward supporting local car makers and battery producers . The cash-hungry electric-car company may happily take Tencent's investment dollars, but may not offer much in return if it doesn't get any further benefit.
Sure, Tencent can afford this: the company generated nearly $10 billion of cash from operations last year, and it's already sitting on a nice $490 million paper profit on its Tesla stake.
But Tencent's investors aren't buying its shares for its stock-market acumen. Having built a reputation as one of China's best-run tech businesses, Tencent should be careful to avoid becoming known as just another sprawling Chinese company wasting its money on vanity investments with little obvious strategic value.
Write to Jacky Wong at jacky.wong@wsj.com
Related
* Tesla Gets Backing of Chinese Internet Giant Tencent (March 29, 2017)
* Tencent: Big in China, Looking Abroad (March 28, 2017)
* Heard on the Street: Tencent Makes It Harder to Bet Against Tesla (March 28, 2017)
* Heard on the Street: Raising the Bar for China's Most Valuable Company (March 23, 2017)
* Chinese Tech Firms Charge Into Electric Cars (April 29, 2016)
Get financial insights and commentary on global investing from The Wall Street Journal's Heard on the Street team. Subscribe to the podcast.
Credit: By Jacky Wong
Subject: Automobile industry; Investments; Electric vehicles
Location: China Beijing China United States--US
People: Musk, Elon
Company / organization: Name: Didi Chuxing; NAICS: 518210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Mar 29, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1881682304
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1881682304?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Why China Can't Get Enough of Elon Musk; Tencent's $1.8 billion investment in Elon Musk's Tesla comes as no surprise to China's tech-industry leaders
Author: Li, Yuan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Mar 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Elon Musk's futuristic ventures and risk-taking often draw mixed receptions in the U.S. In China, tech-industry leaders and investors hail him as a genius and visionary worth cheering on.
They buy Tesla cars and stock, and see investing in his projects as an honor. In the cult of personality that surrounds Mr. Musk in China, tech leaders are proud to be members.
So it comes as no surprise to them that China's most valuable company by market capitalization, the social-networking and games juggernaut Tencent Holdings, invested $1.8 billion
in Mr. Musk's electric-car maker, Tesla.
"He's not an ordinary genius: There are less than 10 people alive who can do what he does and think what he thinks. He is most likely the next Thomas Edison or Jeff Bezos in this generation," says Joe Chen, chief executive of social-networking and financial-technology company Renren.
Zeng Liqing, a Tencent co-founder and angel investor, says he has built a large position in Tesla stock in the past few years. He spent over $150,000 for a deep-blue Tesla Model S with almost every accessory on offer. He invested in Hyperloop One--a venture that uses a technology conceptualized by Mr. Musk: a levitating pod inside a tube to zip people and cargo between cities at near-sonic speeds.
When The Wall Street Journal broke the news this week about Mr. Musk launching Neuralink
, a startup that aims to connect brains with computers, Mr. Zeng kicked himself. He has had a similar idea for years but only talked about it. With Mr. Musk getting a jump, "now I need to find a channel to invest in this project," says Mr. Zeng, who retired from Tencent in 2007.
The adulation seems paradoxical for an industry whose success up to this point has come largely from imitation--building the Google of China, the YouTube of China and the Facebook of China. Firewalls, regulations and other barriers kept foreigners from penetrating the Chinese market. Tencent's first popular product, instant messenger QQ, was a copycat of Israel's ICQ. QQ was initially named QICQ.
In many cases, these Chinese imitators made notable improvements on the originals.
But market forces are laying bare their innovation deficit and make Mr. Musk's boldness compelling.
Growth in online users is slowing, and smartphone penetration is already high. Many tech businesses have to work harder to survive. True innovation, not just incremental tweaks in efficiency, is needed for those who want to leave a mark on the world.
Pony Ma, Tencent's co-founder and CEO, said at a press conference in March that the No. 1 thing that keeps him up at night is being left behind technologically.
Tencent's investment in Tesla is passive, so it doesn't come with a board seat. Neither company is saying anything about helping each other in technology. (Asked to comment for this column, Tencent didn't respond and Tesla declined.) Tencent is already invested in several new-energy vehicle ventures.
By taking a stake in Tesla, Tencent is signaling to the global tech community its eagerness to invest in cutting-edge technologies, people close to the company say. "The signal is, 'Come to us if you've got an innovative idea,' " a person close to Tencent says.
Besides, that person says, "Pony is known to have a soft spot for geeks."
Chinese have been obsessed with foreign tech leaders for decades. Bill Gates was treated like a rock star when he visited China in the 1990s and still draws crowds at conferences.
Such admiration is rooted in the Chinese education system's utilitarian approach to knowledge. Scientists and engineers are considered more useful to society than writers and artists. Scientists and engineers who can make money? They're the greatest.
Lei Jun, co-founder and chief executive of smartphone maker Xiaomi, idolized Apple co-founder Steve Jobs and adopted his signature black turtlenecks and bluejeans at product launches.
After meeting with Mr. Musk in Silicon Valley in 2014, Mr. Lei gushed on social media: "Compared with Elon Musk, we're doing what everybody else can do. He's doing what nobody can think of." Mr. Lei was one of the earliest Tesla owners in China.
Even Mr. Musk's wealthy, successful detractors in China's tech world use their money to be part of an expensive, exclusive club: his investors.
Cai Wensheng, chairman of the photo-editing app Meitu, sees Jobs as a greater innovator than Mr. Musk, noting that over a billion iPhones have been sold, compared with a few hundred thousand cars for Tesla.
"Elon Musk has got grand ideas," Mr. Cai says. "But his products haven't touched many people's lives."
One of Mr. Cai's companies bought several Teslas, but he found the battery charging inconvenient and the interior design too simple. He prefers his BMW or Porsche SUV.
Still, Mr. Cai owns Tesla stock because, he says, "It will be a successful business in the future."
Follow Li Yuan on Twitter @LiYuan6
or write to li.yuan@wsj.com
.
Write to Li Yuan at li.yuan@wsj.com
Related
* SpaceX Reused Booster Lifts Off
* Tesla Gets Backing of Chinese Internet Giant Tencent
(March 29)
* Elon Musk Sets Ambitious Goals at Tesla--and Often Falls Short
(Aug. 15)
Credit: By Li Yuan
Subject: Innovations; Investments; Smartphones; Social networks; Angel investors
Location: United States--US Israel China
People: Edison, Thomas Alva (1847-1931) Bezos, Jeffrey Musk, Elon
Company / organization: Name: YouTube Inc; NAICS: 519130; Name: Tencent Holdings Ltd; NAICS: 517210; Name: Facebook Inc; NAICS: 518210, 519130; Name: Google Inc; NAICS: 334310, 519130; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Mar 30, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1882063070
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1882063070?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-18
Database: The Wall Street Journal
Why China Can't Get Enough of Elon Musk; Tencent's $1.8 billion investment in Elon Musk's Tesla comes as no surprise to China's tech-industry leaders
Author: Li, Yuan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Apr 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Corrections & Amplifications
QQ was initially named OICQ. An earlier version of this article misspelled it as QICQ. In addition, Xiaomi co-founder Lei Jun visited Tesla in 2013. The photo caption in an earlier version of this article misstated the year that the visit occurred. (4/1)
Elon Musk's futuristic ventures and risk-taking often draw mixed receptions in the U.S. In China, tech-industry leaders and investors hail him as a genius and visionary worth cheering on.
They buy Tesla cars and stock, and see investing in his projects as an honor. In the cult of personality that surrounds Mr. Musk in China, tech leaders are proud to be members.
So it comes as no surprise to them that China's most valuable company by market capitalization, the social-networking and games juggernaut Tencent Holdings, invested $1.8 billion
in Mr. Musk's electric-car maker, Tesla.
"He's not an ordinary genius: There are less than 10 people alive who can do what he does and think what he thinks. He is most likely the next Thomas Edison or Jeff Bezos in this generation," says Joe Chen, chief executive of social-networking and financial-technology company Renren.
Zeng Liqing, a Tencent co-founder and angel investor, says he has built a large position in Tesla stock in the past few years. He spent over $150,000 for a deep-blue Tesla Model S with almost every accessory on offer. He invested in Hyperloop One--a venture that uses a technology conceptualized by Mr. Musk: a levitating pod inside a tube to zip people and cargo between cities at near-sonic speeds.
When The Wall Street Journal broke the news this week about Mr. Musk launching Neuralink
, a startup that aims to connect brains with computers, Mr. Zeng kicked himself. He has had a similar idea for years but only talked about it. With Mr. Musk getting a jump, "now I need to find a channel to invest in this project," says Mr. Zeng, who retired from Tencent in 2007.
The adulation seems paradoxical for an industry whose success up to this point has come largely from imitation--building the Google of China, the YouTube of China and the Facebook of China. Firewalls, regulations and other barriers kept foreigners from penetrating the Chinese market. Tencent's first popular product, instant messenger QQ, was a copycat of Israel's ICQ. QQ was initially named OICQ.
In many cases, these Chinese imitators made notable improvements on the originals.
But market forces are laying bare their innovation deficit and make Mr. Musk's boldness compelling.
Growth in online users is slowing, and smartphone penetration is already high. Many tech businesses have to work harder to survive. True innovation, not just incremental tweaks in efficiency, is needed for those who want to leave a mark on the world.
Pony Ma, Tencent's co-founder and CEO, said at a press conference in March that the No. 1 thing that keeps him up at night is being left behind technologically.
Tencent's investment in Tesla is passive, so it doesn't come with a board seat. Neither company is saying anything about helping each other in technology. (Asked to comment for this column, Tencent didn't respond and Tesla declined.) Tencent is already invested in several new-energy vehicle ventures.
By taking a stake in Tesla, Tencent is signaling to the global tech community its eagerness to invest in cutting-edge technologies, people close to the company say. "The signal is, 'Come to us if you've got an innovative idea,' " a person close to Tencent says.
Besides, that person says, "Pony is known to have a soft spot for geeks."
Chinese have been obsessed with foreign tech leaders for decades. Bill Gates was treated like a rock star when he visited China in the 1990s and still draws crowds at conferences.
Such admiration is rooted in the Chinese education system's utilitarian approach to knowledge. Scientists and engineers are considered more useful to society than writers and artists. Scientists and engineers who can make money? They're the greatest.
Lei Jun, co-founder and chief executive of smartphone maker Xiaomi, idolized Apple co-founder Steve Jobs and adopted his signature black turtlenecks and bluejeans at product launches.
After meeting with Mr. Musk in Silicon Valley in 2014, Mr. Lei gushed on social media: "Compared with Elon Musk, we're doing what everybody else can do. He's doing what nobody can think of." Mr. Lei was one of the earliest Tesla owners in China.
Even Mr. Musk's wealthy, successful detractors in China's tech world use their money to be part of an expensive, exclusive club: his investors.
Cai Wensheng, chairman of the photo-editing app Meitu, sees Jobs as a greater innovator than Mr. Musk, noting that over a billion iPhones have been sold, compared with a few hundred thousand cars for Tesla.
"Elon Musk has got grand ideas," Mr. Cai says. "But his products haven't touched many people's lives."
One of Mr. Cai's companies bought several Teslas, but he found the battery charging inconvenient and the interior design too simple. He prefers his BMW or Porsche SUV.
Still, Mr. Cai owns Tesla stock because, he says, "It will be a successful business in the future."
Follow Li Yuan on Twitter @LiYuan6
or write to li.yuan@wsj.com
.
Write to Li Yuan at li.yuan@wsj.com
Related
* SpaceX Reused Booster Lifts Off
* Tesla Gets Backing of Chinese Internet Giant Tencent
(March 29)
* Elon Musk Sets Ambitious Goals at Tesla--and Often Falls Short
(Aug. 15)
Credit: By Li Yuan
Subject: Innovations; Investments; Internet stocks; Smartphones; Social networks; Angel investors
Location: United States--US Israel China
People: Lei Jun Edison, Thomas Alva (1847-1931) Bezos, Jeffrey Musk, Elon
Company / organization: Name: YouTube Inc; NAICS: 519130; Name: Facebook Inc; NAICS: 518210, 519130; Name: Google Inc; NAICS: 334310, 519130; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Apr 1, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1882741448
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1882741448?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-17
Database: The Wall Street Journal
Tesla Global Vehicle Sales Rose 69% in First Quarter to 25,000; Auto maker aims to deliver 50,000 vehicles in first half
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Apr 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. on Sunday said its global sales rose 69% in the first quarter, its best quarter of sales yet, putting the auto maker on a path to meet its goal of 50,000 deliveries in the first half of the year.
The Silicon Valley electric-car maker said it delivered roughly 25,000 vehicles--about 13,450 Model S sedans and about 11,550 Model X sport-utility vehicles--in the quarter, compared with a total of 14,820 a year earlier.
It was Tesla's best quarter of sales on record, topping the third quarter of 2016, when it delivered 24,500 vehicles, which helped the company post its second-ever profitable quarter .
The results should help fuel further investor confidence in Chief Executive Elon Musk as he works to bring out later this year a $35,000 sedan called the Model 3. Tesla shares have risen about 30% this year, pushing the company's market value to almost as much as 113-year-old Ford Motor Co., the second-largest U.S. auto maker by market capitalization.
Tesla is aiming to sell about as many vehicles in the first half of 2017 as it delivered during the final six months of last year.
Much of the first-quarter gain came from the continued rollout of the Model X, which had 2,400 sales a year earlier. The Model S increased about 8% from a year ago. Tesla, unlike other major auto makers, doesn't break out sales by region. In 2016, revenue from U.S. activities made up 60% of the company's business.
Other auto makers are expected to release U.S. results Monday. General Motors Co. could report deliveries rose 9.6% in March from a year ago, while Ford could show an 8.2% decline, according to Edmunds, which tracks auto sales. The industry is expected to show a 2.1% increase, according to Edmunds.
During the first three months of this year, Tesla built 25,148 vehicles, the company said.
Tesla received a vote of confidence last week when Chinese tech giant Tencent Holdings Ltd. revealed it had acquired a 5% stake in the auto maker.
Tesla is trying to better position the Model 3 within its product lineup. The company is ending sales of the cheapest version of the Model S, which costs about $69,000. The new lowest-priced offering of that vehicle will be the Model S 75, starting at $75,700, likely clearing some room in Tesla's portfolio for versions of the Model 3 that cost more than the starting price of $35,000.
Mr. Musk weighed in on Twitter during the final days of the quarter about the coming Model 3, including a brief video showing a preproduction version of the Model 3 accelerating.
"Am noticing that many people think Model 3 is the `next version' of a Tesla, like iPhone 2 vs 3. This is not true," he said on Twitter. The Model 3 "is just a smaller, more affordable version of Model S," with less range and power and fewer features, he said. Instead, the CEO wrote the differences between the Model 3 and Model S will be similar to the differences between BMW's 3 Series compact and its midsize 5 or 6 Series vehicles.
To drive home the point that the Model S will remain the top-of-the line car for Tesla, Mr. Musk added: "Let me put it this way: it is the car I will keep driving even after Model 3 arrives."
Write to Tim Higgins at Tim.Higgins@WSJ.com
Read more
* Why China Can't Get Enough of Elon Musk (April 1)
* Tencent Makes It Harder to Bet Against Tesla (March 28)
* Tesla Raises Additional Funds for Model 3 Debut (March 15)
Credit: By Tim Higgins
Subject: Automobile industry; Automobile sales; Vehicles
Location: United States--US
People: Musk, Elon
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Apr 2, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1882967519
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1882967519?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Tesla Sales Rise 69% in Best-Ever Quarter
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Apr 2017: B.3.
ProQuest document link
Abstract:
Tesla shares have risen about 30% this year, pushing the company's market value to almost as much as 113-year-old Ford Motor Co., the second-largest U.S. auto maker by market capitalization.
Full text: Tesla Inc. on Sunday said its global sales rose 69% in the first quarter, its best quarter of sales yet, putting the auto maker on a path to meet its goal of 50,000 deliveries in the first half of the year.
The Silicon Valley electric-car maker said it delivered roughly 25,000 vehicles -- about 13,450 Model S sedans and about 11,550 Model X sport-utility vehicles -- in the quarter, compared with a total of 14,820 a year earlier.
It was Tesla's best quarter of sales on record, topping the third quarter of 2016, when it delivered 24,500 vehicles, which helped the company post its second-ever profitable quarter.
The results should help fuel further investor confidence in Chief Executive Elon Musk as he works to bring out later this year a $35,000 sedan called the Model 3. Tesla shares have risen about 30% this year, pushing the company's market value to almost as much as 113-year-old Ford Motor Co., the second-largest U.S. auto maker by market capitalization.
Tesla aims to sell about as many vehicles in the first half of 2017 as it delivered during the final six months of last year.
Much of the first-quarter gain came from the continued rollout of the Model X, which had 2,400 sales a year earlier.
Other auto makers are expected to release U.S. results Monday. General Motors Co. could report deliveries rose 9.6% in March from a year ago, while Ford could show an 8.2% decline, according to Edmunds, which tracks auto sales. The industry is expected to show a 2.1% increase, according to Edmunds.
Credit: By Tim Higgins
Subject: Automobile industry; Automobile sales
Location: United States--US
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Apr 3, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1883084349
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1883084349?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla, on a Hot Streak, Passes Ford in Investor Value; Change reflects a growing belief that electric motors and autonomous driving are the wave of the future for cars
Author: Higgins, Tim; Rogers, Christina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Apr 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Elon Musk has steered past Henry Ford in the minds of investors, the latest sign that the auto industry is undergoing a seismic shift.
Tesla Inc., the upstart Silicon Valley electric-car maker run by Mr. Musk, has overtaken Ford Motor Co., the automotive pioneer that is exactly 100 years older, as the second-largest U.S. auto maker by stock-market value.
Shares in Tesla were up 7.3% at $298.52 Monday, pushing the California auto maker's market capitalization to $48.7 billion, above the Michigan company's roughly $45.5 billion, according to FactSet. The next milestone for Tesla would be General Motors Co., valued at roughly $51.2 billion.
This milestone was achieved as the broader auto industry delivered disappointing March sales results , reinforcing widespread investor concern that the profitable U.S. market has plateaued after seven years of growth.
Wall Street has soured on blue-chip auto stocks as discounts to sell cars soar and inventories balloon, fearful that established players are headed into the prolonged downturns that have long plagued the boom-and-bust car business.
Tesla is among the few companies showing the potential to defy that cycle. Its sales of electric cars, while relatively modest, have skyrocketed in a period when low gasoline prices have sunk demand for other electric vehicles. On Sunday, the company said its global sales rose 69% in the first quarter, putting the car maker on the path to meet its goal of 50,000 deliveries in the first half.
GM launched its Chevrolet Bolt in January with none of the fanfare Tesla's forthcoming Model 3 received; and the 3,000 Bolts sold through March indicate that the battery-powered Chevrolet will struggle to be more than a niche car.
Tesla shares, which had already received a vote of confidence last week with Chinese tech company Tencent Holdings Ltd. revealing it had taken a 5% stake , were boosted by the auto maker's vehicle sales record .
The changing of the guard reflects a growing belief that internal-combustion engines will eventually be replaced by electric motors as the primary power source for automobiles. It is the latest threat to Detroit's once-dominant stranglehold on personal transportation, a role that was diminished by Japanese car companies in the 1980s and is now being challenged by Silicon Valley's technological might. While Mr. Ford's Model T ushered in a wave of affordable mobility for the middle class, Mr. Musk is promising the same with the coming Model 3. It is a sleek, computerized $35,000 sedan that can drive nearly the distance from New York City to Washington on a single charge.
Tesla is a bet that Mr. Musk--who is 45 years old, the same age as Mr. Ford was in 1908 when he released the Model T--can reshape transportation not only with electric vehicles, but with cars that drive themselves.
A Tesla spokesman declined to comment on the new market value. In a tweet Monday , Mr. Musk defended against critics of his company's valuation, saying it reflects Tesla's future potential. "Tesla is absurdly overvalued if based on the past, but that's irrelevant," Mr. Musk wrote. "A stock price represents risk-adjusted future cash flows."
In a statement, Ford said it doesn't run its business based on daily stock changes. "What we are doing is focusing our business on what drives value creation, which is profitable growth, minimizing risk and delivering strong returns."
Some investors believe Tesla is better positioned than auto makers and tech giants to bring advanced self-driving technology to the roadway.
"Other auto makers really have to make this transition to electric and autonomous, and it is almost like twice as hard for them to get there than it is for Tesla," said Tasha Keeney, an analyst for ARK Invest, which owns shares in Tesla, GM and Toyota Motor Corp.
Tesla remains a shaky bet. The 13-year-old company is unprofitable, deeply indebted and delivered just 76,000 cars last year. Its Autopilot mode is untested as a fully autonomous feature and has raised safety concerns.
Ford has over 20 times the annual revenue, billions of dollars in profit and sells millions of cars each year. It isn't standing still under Chief Executive Mark Fields, promising to deliver self-driving cars by 2021. It is buying and investing in tech startups: It invested $1 billion in Argo AI , a company consisting of engineers from the autonomous vehicle programs of Uber Technologies Inc. and Alphabet Inc. Ford is coming off one of its most profitable periods in history, after a restructuring effort led by former Chief Executive Alan Mulally that eliminated brands, closed plants and streamlined the company's global operations.
Under Mr. Fields, who took over Ford in 2014, the company has benefited from strong truck demand but struggled to persuade investors that brighter days are ahead, particularly as important markets plateau. He has proposed a number of ways to reshape Ford, but his vision is weighed down by a century-old business model that will be expensive to reshape.
Ford is forecasting leaner results for 2017, further confirming Wall Street's view that traditional car makers are still too exposed to the auto industry's boom-bust cycles. On Monday, Ford reported March sales plunged 7.2% amid a decline in fleet and passenger-car sales. GM posted a softer-than-expected 1.6% sales increase for the month.
Ford's market value is roughly the same as it was in late 2010, when a newly public Tesla was valued at less than $2 billion. Ford's stock has fluctuated since then, while Tesla's has steadily risen and has surged more than 50% since the company acquired SolarCity Corp. in November.
The acquisition was part of Mr. Musk's vision to have under one roof a company that could offer customers solar-roof panels, battery-storage units and electric-powered cars. It is a vision he highlighted in February when he removed the word "Motors" from Tesla's official name.
Mr. Musk is betting that a less-expensive Model 3 will help Tesla evolve from a luxury-car maker into one with mass-market appeal. He is aiming to make 500,000 vehicles next year, a projection doubted by some of his biggest supporters.
Still, Morgan Stanley autos analyst Adam Jonas has a price target of $305 a share for Tesla, estimating the added value could come from a ride-hailing service that Mr. Musk has hinted will work with future vehicles. "Tesla is distinctively positioned to commercialize an app-based, on-demand mobility service," Mr. Jonas wrote in a note to investors.
Some old-timers disagree.
"Its market cap is based on hype and promises versus substance," said David Cole, an outspoken supporter and investor in Detroit auto makers, and chairman emeritus of the Center for Automotive Research in Ann Arbor, Mich.
Write to Tim Higgins at Tim.Higgins@WSJ.com and Christina Rogers at christina.rogers@wsj.com
More
* Google Shifts Up Driverless-Car Suit
* Wall Street's Prediction: Tesla Won't Be Bigger Than Ford for Long
* Auto Makers Post Mixed Sales Results in March
* Tesla Vehicle Sales Up 69% in First Quarter
* Tesla Gets Backing of Chinese Internet Giant Tencent
Credit: By Tim Higgins and Christina Rogers
Subject: Automobile industry; Investments; Vehicles
Location: California United States--US New York Michigan Washington DC
Company / organization: Name: Tencent Holdings Ltd; NAICS: 517210; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Apr 3, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1883174184
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1883174184?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Shares Surpass $300 Mark; In market-value race, electric-car maker has Ford in its rearview mirror and is closing the gap with GM
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Apr 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc., which overtook Ford Motor Co. as the second-largest U.S. auto maker by market value, continued its run Tuesday by eclipsing $300 a share for the first time and closing the gap with General Motors Co.
The Palo Alto, Calif., electric-car maker is on a hot streak with investors ahead of the introduction of the company's Model 3 sedan, a mainstream electric car expected to be priced at $35,000 and roll out later this year.
Tesla Chief Executive Elon Musk's success with the pricier Model S sedan and Model X sport-utility vehicle has helped make a case for the future of electric cars.
Tesla shares rose to $303.70 at 4 p.m. in New York, up 1.7% from Monday's close and equaling a $49.53 billion market value, according to FactSet. That compares with GM's $34.27 share price and $51.34 billion market value.
GM is currently the U.S. auto maker with the highest market capitalization, but still trails global heavyweights such as Toyota Motor Corp.
Tesla on Monday surpassed Ford's market value , which stands at $45.19 billion. Disappointing sales announced by traditional auto makers on Monday were in contrast to Tesla reporting a record quarter on Sunday.
GM on Monday reported a modest sales gain for March, lifted by truck demand, and said Chief Executive Mary Barra earned $22.6 million in 2016, a decline of 21% from 2015 when she was awarded a sizable retention package. Ms. Barra, at the helm since 2014, has said her goal is to make GM the most valued auto maker in the world.
Mr. Musk faces huge challenges in accomplishing all that he is claiming to do--including making 500,000 vehicles next year after building just 84,000 last year and creating software that would enable a vehicle to drive itself. Tesla sold 76,230 vehicles last year while GM delivered 10 million.
Mr. Musk's plans for the Model 3 were given a vote of confidence last week when Chinese tech company Tencent Holdings Ltd. revealed it had taken a 5% stake in Tesla .
Tesla shares are approaching a $305 price target set by Morgan Stanley autos analyst Adam Jonas, who has said the value is based in part on the potential for the company to be part of future on-demand mobility services.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Stock prices; Electric vehicles
Location: United States--US
People: Barra, Mary
Company / organization: Name: Tencent Holdings Ltd; NAICS: 517210; Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Apr 4, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1883637660
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1883637660?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Steps on the Gas, Overtakes Ford in Value
Author: Higgins, Tim; Rogers, Christina
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Apr 2017: A.1.
ProQuest document link
Abstract:
Tesla Inc., the upstart Silicon Valley electric-car maker run by Mr. Musk, has overtaken Ford Motor Co., the automotive pioneer that is exactly 100 years older, as the second-largest U.S. auto maker by stock-market value.
Full text: Elon Musk has steered past Henry Ford in the minds of investors, the latest sign that the auto industry is undergoing a seismic shift.
Tesla Inc., the upstart Silicon Valley electric-car maker run by Mr. Musk, has overtaken Ford Motor Co., the automotive pioneer that is exactly 100 years older, as the second-largest U.S. auto maker by stock-market value.
Shares in Tesla were up 7.3% at $298.52 Monday, pushing the California auto maker's market capitalization to $48.7 billion, above the Michigan company's roughly $45.5 billion, according to FactSet. The next milestone for Tesla would be General Motors Co., valued at roughly $51.2 billion.
This milestone was achieved as the broader auto industry delivered disappointing March sales results, reinforcing widespread investor concern that the profitable U.S. market has plateaued after seven years of growth.
Wall Street has soured on blue-chip auto stocks as discounts to sell cars soar and inventories balloon, fearful that established players are headed into the prolonged downturns that have long plagued the boom-and-bust car business.
Tesla is among the few companies showing the potential to defy that cycle. Its sales of electric cars, while relatively modest, have skyrocketed in a period when low gasoline prices have sunk demand for other electric vehicles. On Sunday, the company said its global sales rose 69% in the first quarter, putting the car maker on the path to meet its goal of 50,000 deliveries in the first half.
GM launched its Chevrolet Bolt in January with none of the fanfare Tesla's forthcoming Model 3 received; and the 3,000 Bolts sold through March indicate that the battery-powered Chevrolet will struggle to be more than a niche car.
Tesla shares, which had already received a vote of confidence last week with Chinese tech company Tencent Holdings Ltd. revealing it had taken a 5% stake, were boosted by the auto maker's vehicle sales record.
The changing of the guard reflects a growing belief that internal-combustion engines will eventually be replaced by electric motors as the primary power source for automobiles. It is the latest threat to Detroit's once-dominant stranglehold on personal transportation, a role that was diminished by Japanese car companies in the 1980s and is now being challenged by Silicon Valley's technological might. While Mr. Ford's Model T ushered in a wave of affordable mobility for the middle class, Mr. Musk is promising the same with the coming Model 3. It is a sleek, computerized $35,000 sedan that can drive nearly the distance from New York City to Washington on a single charge.
Tesla is a bet that Mr. Musk -- who is 45 years old, the same age as Mr. Ford was in 1908 when he released the Model T -- can reshape transportation not only with electric vehicles, but with cars that drive themselves.
A Tesla spokesman declined to comment on the new market value. In a tweet Monday, Mr. Musk defended against critics of his company's valuation, saying it reflects Tesla's future potential. "Tesla is absurdly overvalued if based on the past, but that's irrelevant," Mr. Musk wrote. "A stock price represents risk-adjusted future cash flows."
In a statement, Ford said it doesn't run its business based on daily stock changes. "What we are doing is focusing our business on what drives value creation, which is profitable growth, minimizing risk and delivering strong returns."
Some investors believe Tesla is better positioned than auto makers and tech giants to bring advanced self-driving technology to the roadway.
"Other auto makers really have to make this transition to electric and autonomous, and it is almost like twice as hard for them to get there than it is for Tesla," said Tasha Keeney, an analyst for ARK Invest, which owns shares in Tesla, GM and Toyota Motor Corp.
Tesla remains a shaky bet. The 13-year-old company is unprofitable, deeply indebted and delivered just 76,000 cars last year. Its Autopilot mode is untested as a fully autonomous feature and has raised safety concerns.
Ford has over 20 times the annual revenue, billions of dollars in profit and sells millions of cars each year. It isn't standing still under Chief Executive Mark Fields, promising to deliver self-driving cars by 2021. It is buying and investing in tech startups: It invested $1 billion in Argo AI, a company consisting of engineers from the autonomous vehicle programs of Uber Technologies Inc. and Alphabet Inc. Ford is coming off one of its most profitable periods in history, after a restructuring effort led by former Chief Executive Alan Mulally.
Under Mr. Fields, who took over Ford in 2014, the company has benefited from strong truck demand but struggled to persuade investors that brighter days are ahead, particularly as important markets plateau. He has proposed a number of ways to reshape Ford, but his vision is weighed down by a century-old business model that will be expensive to reshape.
Ford is forecasting leaner results for 2017, further confirming Wall Street's view that traditional car makers are still too exposed to the auto industry's boom-bust cycles. On Monday, Ford reported March sales plunged 7.2% amid a decline in fleet and passenger-car sales. GM posted a softer-than-expected 1.6% sales increase for the month.
Ford's market value is roughly the same as it was in late 2010, when a newly public Tesla was valued at less than $2 billion. Ford's stock has fluctuated since then, while Tesla's has steadily risen and has surged more than 50% since the company acquired SolarCity Corp. in November.
The acquisition was part of Mr. Musk's vision to have under one roof a company that could offer customers solar-roof panels, battery-storage units and electric-powered cars. It is a vision he highlighted in February when he removed the word "Motors" from Tesla's official name.
Mr. Musk is betting that a less-expensive Model 3 will help Tesla evolve from a luxury-car maker into one with mass-market appeal. He is aiming to make 500,000 vehicles next year, a projection doubted by some of his biggest supporters.
Still, Morgan Stanley analyst Adam Jonas has a target of $305 a share for Tesla, estimating the added value could come from a ride-hailing service that Mr. Musk has hinted will work with future vehicles. "Tesla is distinctively positioned to commercialize an app-based, on-demand mobility service," Mr. Jonas wrote in a note to investors.
Some old-timers disagree.
"Its market cap is based on hype and promises versus substance," said David Cole, an outspoken supporter and investor in Detroit auto makers, and chairman emeritus of the Center for Automotive Research in Ann Arbor, Mich.
Credit: By Tim Higgins and Christina Rogers
Subject: Automobile industry; Investments; Automobile sales; Electric vehicles; Market value
Location: United States--US California
Company / organization: Name: Tencent Holdings Ltd; NAICS: 517210; Name: Ford Motor Co; NAICS: 336111, 333924, 336 390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2017
Publication date: Apr 4, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1883996729
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1883996729?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Tesla's Share Price Tops $300 for First Time
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Apr 2017: B.3.
ProQuest document link
Abstract:
Tesla Inc., which overtook Ford Motor Co. as the second-largest U.S. auto maker by market value, continued its run Tuesday by eclipsing $300 a share for the first time and closing the gap with General Motors Co. The Palo Alto, Calif., electric-car maker is on a hot streak with investors ahead of the introduction of the company's Model 3 sedan, a mainstream electric car expected to be priced at $35,000 and roll out later this year.
Full text: Tesla Inc., which overtook Ford Motor Co. as the second-largest U.S. auto maker by market value, continued its run Tuesday by eclipsing $300 a share for the first time and closing the gap with General Motors Co.
The Palo Alto, Calif., electric-car maker is on a hot streak with investors ahead of the introduction of the company's Model 3 sedan, a mainstream electric car expected to be priced at $35,000 and roll out later this year.
Tesla Chief Executive Elon Musk's success with the pricier Model S sedan and Model X sport-utility vehicle has helped make a case for the future of electric cars.
Tesla shares rose to $303.70 at 4 p.m. in New York, up 1.7% from Monday's close and equaling a $49.53 billion market value, according to FactSet. That compares with GM's $34.27 share price and $51.34 billion market value.
GM is currently the U.S. auto maker with the highest market capitalization, but still trails global heavyweights such as Toyota Motor Corp.
Tesla on Monday surpassed Ford's market value, which stands at $45.19 billion. Disappointing sales announced by traditional auto makers on Monday were in contrast to Tesla reporting a record quarter on Sunday.
GM on Monday reported a modest sales gain for March.
Mr. Musk's plans for the Model 3 were given a vote of confidence last week when Chinese tech company Tencent Holdings Ltd. revealed it had taken a 5% stake in Tesla.
Tesla shares are approaching a $305 price target set by Morgan Stanley autos analyst Adam Jonas.
Credit: By Tim Higgins
Subject: Financial performance; Stock prices; Automobile industry
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Apr 5, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1883993962
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1883993962?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Rivals GM as the Most Valuable Auto Maker in U.S. Shares of Elon Musk's electric-car maker continue their ascent
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Apr 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Silicon Valley overtook the Motor City on Monday.
A surge in Tesla Inc. stock during morning trading gave it the title of largest U.S. auto maker by market value--a feat that would have seemed highly improbable 13 years ago when the electric-car maker based in Palo Alto, Calif., first began tinkering with the idea of making a sports car.
Shares in Tesla rose as high as $313.73 Monday, helped by an upgrade by Piper Jaffray, pushing the company's market capitalization to $51.17 billion. That high-water mark exceeded Detroit-based General Motors Co., which at its lowest point Monday was worth $50.93 billion. By the market's close in New York, however, Tesla's gains had faded, leaving its market value at $50.95 billion compared with GM's $51.18 billion. Ford Motor Co. closed the day at $44.8 billion.
Market values are calculated using data provided by FactSet, which draws information from public filings.
Still, that Tesla was valued higher than GM underscores the profound change occurring in the global automotive industry as Silicon Valley pursues a vision for transportation--including self-driving cars and vehicles on demand--that could upend century-old competitors. Last week's disappointing monthly sales results by traditional auto makers served as a further example to investors concerned that the profitable U.S. new-car market is plateauing.
"We've built a track record of strong financial performance," a GM spokeswoman said in an email. "We'll stay focused on delivering outstanding results and making decisions to deploy capital where it will generate the strongest returns, to enhance shareholder value."
Tesla declined to comment.
GM is the largest auto maker in the U.S. by market share, making up 17.3% of the sales last year, according to Autodata Corp. Tesla had a 0.2% share, which beat Ferrari and Maserati.
"What's fun about following this company now is that anything can happen," Chaim Siegel, an analyst for Investing.com, said in an email about Tesla that aligns with investor sentiment even as the auto maker remains unprofitable and deeply in debt. "The potential is huge. The hopes are huge."
Even some of Tesla's most optimistic followers didn't expect the extent of the recent surge in value. "We're pretty surprised by the recent run in Tesla's share price to over $300 so quickly," Adam Jonas, an analyst for Morgan Stanley, wrote in a note to investors as Tesla's market cap neared GM's. He had been targeting a $305 price for Tesla. "Such is the power of technical factors over fundamental drivers," he said.
Tesla shares are up more than 40% this year, a move that last week led Chief Executive Elon Musk's company to surpass Ford as the second-largest auto maker. The exuberance comes even as Mr. Musk faces huge challenges in accomplishing all he is claiming to do, including making 500,000 vehicles next year after building just 84,000 last year and creating software that would enable a vehicle to drive itself.
"It's indicative of the market wanting to pay for potential, including into markets that don't exist yet in any large size such as [electric vehicles], home energy generation and storage, rather than profits and cash flow today that the large auto makers generate," said David Whiston, an analyst for Morningstar Research.
Mr. Musk, who has struggled to bring out new products before, faces the daunting challenge of later this year rolling out the $35,000 Model 3 sedan , the linchpin in his plans to take the company into the mainstream from the rarefied air of selling luxury vehicles.
His acquisition of SolarCity Corp. late last year and removal of the word "Motors" from the company's official name are part of a broader vision of being able to offer solar panels to generate energy and batteries to store that power at home or the office--all for the benefit of the vehicles being sold. He has also begun shipping vehicles equipped with the hardware he says is needed to make them fully self-driving once the software is completed, aiming to demonstrate the prowess by year-end.
It is a vision that received a strong endorsement late last month with the revelation that Chinese technology company Tencent Holdings Ltd., best known for China's largest social network, WeChat, had acquired a 5% stake in Tesla.
"The sooner investors view Tesla as a transportation/infrastructure company rather than just a car company, the more we believe the industry events to come over the next 12 to 18 months will make sense," Mr. Jonas wrote.
Investors continued to push Tesla shares higher last week after the announcement of a record quarter of vehicle sales. Meanwhile, GM reported a modest U.S. sales gain for March, lifted by truck demand, and said Chief Executive Mary Barra earned $22.6 million in 2016, a decline of 21% from 2015 when she was awarded a sizable retention package. Ms. Barra, at the helm since 2014, has said her goal is to make GM the most valued auto maker in the world.
For GM, Tuesday was particularly painful. The Detroit auto maker, which sold 10 million vehicles last year globally, has been rushing to develop its own self-driving technology, acquiring Cruise Automation last year in a deal that could be worth $1 billion, and investing in ride-hailing service Lyft.
Ms. Barra's predecessor, Dan Akerson, a former telecommunications executive, was concerned about Tesla's potential, setting up a team to study how the electric-car maker could threaten GM and challenging his senior executives to war-game-like scenarios.
GM has been especially aggressive in recent years in trying to thwart Tesla, pushing legislation in states in an attempt to block the company's strategy of selling directly to customers instead of using franchised dealers like the rest of the auto industry has done for generations. In preparing the new Chevrolet Bolt all-electric small car, seen by some as GM's answer to the Model 3, Ms. Barra said in January 2016 at CES, the annual consumer-electronics show in Las Vegas, that GM's dealer network gave it a competitive edge. Tesla's belief in having the ability to control its own stores is prized highly among the company's senior leaders.
GM's vision of a world with self-driving cars dates to concepts it introduced at the 1939 New York World's Fair, but innovation took a back seat among many recent leaders as the company fought to avoid bankruptcy.
Ultimately, GM's debt load and the 2007-09 recession led to what was then-unthinkable years earlier: GM's U.S. government-backed bankruptcy-court reorganization in 2009.
Financially, the company has roared back, reporting record profits and developing some of its best vehicles in a generation. But investors have largely yawned. Shares in GM closed at $33.71 on Friday, compared with the company's postbankruptcy-court initial-public-offering price of $33 in 2010.
"It's absolutely mind-boggling that we're even discussing GM and Tesla reaching a parallel," said Dave Sullivan, an industry analyst with AutoPacific. "It's not as if they are sitting on some sort of blockbuster drug that isn't available in generic form. The wide rollout of electric vehicles by Jaguar, Daimler, BMW and Audi is right around the corner."
Write to Tim Higgins at Tim.Higgins@WSJ.com
Tesla rising
* Tesla: Have Investors Taken the Blue Pill? (April 6)
* Tesla vs. Ford: Understanding Wall Street's Math (April 4)
* Tesla Shares Surpass $300 Mark (April 4)
* Tesla, on a Hot Streak, Passes Ford in Investor Value (April 3)
* Why China Can't Get Enough of Elon Musk (April 1)
Credit: By Tim Higgins
Subject: Automobile industry; Corporate profits; Automobile sales; Bankruptcy reorganization; Vehicles
Location: China United States--US Palo Alto California
People: Musk, Elon
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Apr 10, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1885886801
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1885886801?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Tesla Vies to Top GM Value
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Apr 2017: B.3.
ProQuest document link
Abstract:
A surge in Tesla Inc. stock during morning trading gave the company the title of largest U.S. auto maker by market value -- a feat that would have seemed highly improbable 13 years ago when the electric-car maker based in Palo Alto, Calif., first began tinkering with the idea of making a sports car.
Full text: Silicon Valley overtook the Motor City on Monday.
A surge in Tesla Inc. stock during morning trading gave the company the title of largest U.S. auto maker by market value -- a feat that would have seemed highly improbable 13 years ago when the electric-car maker based in Palo Alto, Calif., first began tinkering with the idea of making a sports car.
Shares in Tesla rose as high as $313.73 Monday, helped by an upgrade by Piper Jaffray, pushing the company's market capitalization to $51.17 billion. That high-water mark exceeded Detroit-based General Motors Co., which at its lowest point Monday was worth $50.93 billion. By the market's close in New York, however, Tesla's gains had faded, leaving its market value at $50.95 billion, compared with GM's $51.18 billion. Ford Motor Co. closed the day at $44.8 billion.
Market values are calculated using data provided by FactSet, which draws information from public filings.
Still, that Tesla was valued higher than GM underscores the profound change occurring in the automotive industry as Silicon Valley pursues a vision for transportation -- including self-driving cars and vehicles on demand -- that could upend century-old competitors. Last week's disappointing monthly sales results by traditional auto makers served as a further example to investors concerned that the profitable U.S. new-car market is plateauing.
"We've built a track record of strong financial performance," a GM spokeswoman said in an email. "We'll stay focused on delivering outstanding results and making decisions to deploy capital where it will generate the strongest returns, to enhance shareholder value."
Tesla declined to comment.
GM is the largest auto maker in the U.S. by market share, making up 17.3% of the sales last year, according to Autodata Corp. Tesla held a 0.2% share, to beat Ferrari and Maserati.
"What's fun about following this company now is that anything can happen," Chaim Siegel, an analyst for Investing.com, said in an email about Tesla that aligns with investor sentiment even as the auto maker remains unprofitable and deeply in debt. "The potential is huge. The hopes are huge."
Even some of Tesla's most optimistic followers didn't expect the extent of the recent surge in value. "We're pretty surprised by the recent run in Tesla's share price to over $300 so quickly," Adam Jonas, an analyst for Morgan Stanley, wrote in a note to investors as Tesla's market cap neared GM's. He had been targeting a $305 price for Tesla. "Such is the power of technical factors over fundamental drivers," he said.
Tesla shares are up more than 40% this year, a move that last week led Chief Executive Elon Musk's company to surpass Ford as the second-largest auto maker. The exuberance comes even as Mr. Musk faces huge challenges in accomplishing all he is claiming to do, including making 500,000 vehicles next year after building just 84,000 last year and creating software that would enable a vehicle to drive itself.
"It's indicative of the market wanting to pay for potential, including into markets that don't exist yet in any large size such as [electric vehicles], home energy generation and storage, rather than profits and cash flow today that the large auto makers generate," said David Whiston, an analyst for Morningstar Research.
Mr. Musk, who has struggled to bring out new products before, faces the daunting challenge of later this year rolling out the $35,000 Model 3 sedan, the linchpin in his plans to take the company into the mainstream from the rarefied air of selling luxury vehicles.
His acquisition of SolarCity Corp. late last year and removal of the word "Motors" from the company's official name are part of a vision of being able to offer solar panels to generate energy and batteries to store that power at home or the office -- all for the benefit of the vehicles being sold. He has begun shipping vehicles equipped with the hardware he says is needed to make them fully self-driving once the software is completed, aiming to demonstrate the prowess by year-end.
Credit: By Tim Higgins
Subject: Automobile industry; Market value
Company / organization: Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Apr 11, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1886198918
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1886198918?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Elon Musk Has an Awkward Problem at Tesla: Employee Parking; With more employees competing for limited spaces, cars are often jammed diagonally in spots, propped up on curbs or left on gravelly medians; 'you're getting your tires slashed'
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Apr 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Billionaire entrepreneur Elon Musk is reimagining the future of transportation
by attempting to build self-driving cars, invent a supersonic railway and launch private citizens into outer space.
What keeps him up at night, though, is the parking lot outside his office window.
"Parking is, like, one of my biggest nightmares--like, where do we park everyone?" said the Tesla Inc. chief executive, on a recent earnings call with analysts who were trying to probe concerns about the electric-car maker's year ahead.
At Tesla's Palo Alto, Calif., headquarters, uniformed valets dashed about on a recent morning directing traffic and cramming in as many cars as possible. A bumper-to-bumper formation of parked cars snaked through the lanes of the lot, boxing in other vehicles.
At the Tesla factory 30 miles away in Fremont, which has 6,000 employees over the course of various shifts competing for 4,500 vehicle spaces, photos show parking is a free-for-all. Cars are jammed diagonally in spots, propped up on curbs or resting on gravelly medians.
One employee documents the worst offenders at both locations on Instagram
, using photos sent in by co-workers and including snarky and often profane comments.
In one, an old Cadillac is parked in spaces marked for motorcycles--"He thought it said boat parking." Another shows an assortment of cars completely outside of the lines--"parking spot lines are just a suggestion." A truck fully on the median--"This one is called: despair."
There is even a shot of the plentiful parking at an office of SpaceX--the rocket company
also run by Mr. Musk--with the comment, when "you realize Papa Elon picked a favorite child...and it wasn't you."
The Instagramming employee said the account began a year ago out of frustration. Tesla recently tried to improve parking in Fremont by repainting the lines to clarify spaces, the employee said, adding that before, "They used to have two sets of faded lines."
Tesla says it's taken steps to improve parking, such as offering Wi-Fi-enabled shuttles to both locations, and that the Palo Alto situation has improved in recent months while Fremont has more spaces than employees when factoring in overflow parking and shift work.
In Silicon Valley, parking is a classic barometer of booms and busts. Desolate lots at sprawling office complexes symbolized the dot-com implosion in 2000. Today, shuttle buses from Tesla, Alphabet Inc.'s Google and Facebook Inc. rumble across San Francisco and down Highway 101 to relieve congestion at ever-expanding corporate campuses. Yahoo Inc.'s empty parking spaces in recent years were said to illustrate its troubled times.
Tesla's parking hell reflects a hiring binge that has expanded its head count by about 75% over the past two years to more than 17,000, not including employees of SolarCity Corp., which it acquired late last year. Its market value has soared
to about the same level as the largest U.S. auto maker, General Motors Co.
When Tesla announced in 2009 it was leasing the former Hewlett-Packard facility in Palo Alto for its headquarters, it said it planned to have about 350 employees there, with room for as many as 650. Tesla won't disclose how many people work there now, but says it has 600 striped parking spots.
The chaos has forced employees to come up with clever workarounds, including secret deals at the factory to share spots with workers on opposite shifts. "Employees would enter into exclusive relationships, and payment would be made in the form of cash or a barter deal," such as cigarettes or help rebuilding a car on the weekend, said Marissa Peretz, who spent five years as a recruiter for the auto maker until 2015, when she left to cofound her own headhunting firm.
Some workers arrive early to find spaces, and then go back to sleep in their cars until work begins, employees said. Others idle in their cars waiting for co-workers to leave, so they can pounce when spaces come open.
Tesla factory worker Jose Moran, who has spoken out against the company's working conditions
, said in an interview he tries to arrive an hour before his 5:25 a.m. shift to find a parking spot. That means leaving his home in Manteca, about 60 miles from Fremont, at 3:25 a.m.
Getting out of the parking lot is a mess, too. Double-parked cars often box others in, causing employees to blow a gasket. The Instagram account captured a photo of a note left on a windshield that read, with some pointed expletives: "Next time you block 100+ people from getting out of the parking lot you're getting your tires slashed"--signed, "Everyone."
Tesla is trying to build self-driving cars that could in theory help alleviate parking headaches, since they might one day be able to drive away and park themselves at distant lots, an irony that isn't lost on employees. One Instagram commenter theorized the disarray was a plot by Tesla management: "It provides motivation to achieve [fully] autonomous driving as soon as physically possible."
Palo Alto's deputy fire chief, Catherine Capriles, calls Tesla's parking situation a "nightmare." The Palo Alto fire department has responded to at least three medical emergencies at the headquarters in the past year and ran into trouble when parked vehicles blocked the fire engine from turning or backing out, Ms. Capriles said.
Tesla says it works closely with the fire department to maintain pathways in case of emergencies.
Other visitors also struggle. At a recent lunchtime at the headquarters, a Paddy Wagon Sliders food truck squeezed into the lot and appeared to block the entrance for a delivery truck, which ended up parking in the middle of a road. The delivery man dodged oncoming traffic as he carted packages on a dolly. Tesla says food trucks don't interfere with deliveries or the loading area.
Tesla has tried to encourage alternatives to driving, such as biking, public transportation and the shuttle buses provided from around the Bay Area, and the company also tickets the scalawags. Parking offenders at the factory can return to find boots on their tires or their cars towed to a distant overflow lot.
A favorite topic of conversation, employees said, is how Mr. Musk manages parking. "We joked about him coming in on a helicopter," said the Instagramming employee. Tesla says Mr. Musk parks in the lot.
Mr. Musk may have a fix coming for Fremont, related to his plans to double the size of the factory to meet projected sales of one million a year by 2020, fueled in large part by the Model 3 sedan that begins production this year. The plan includes new bike lanes and expanded shuttle routes to mass transit.
The CEO told workers in a memo in February that he is working on adding a "Tesla electric pod car roller coaster (with an optimal loop the loop route, of course!) that will allow fast and fun travel throughout our Fremont campus, dipping in and out of the factory and connecting all the parking lots."
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Credit: By Tim Higgins
Subject: Automobile industry; Fires; Professional recruitment; Employees; Workers; Traffic congestion; Vehicles
Location: Palo Alto California
People: Musk, Elon
Company / organization: Name: Alphabet Inc; NAICS: 551114; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Apr 11, 2017
Section: Page One
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1886370735
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1886370735?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-17
Database: The Wall Street Journal
Tesla Value 'Inexplicable,' Says AutoNation CEO; Mike Jackson's remarks come after electric-vehicle maker briefly overtook GM as largest U.S. auto maker
Author: Spector, Mike; Rogers, Christina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Apr 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: The head of the U.S.'s largest car-dealership chain called Tesla Inc.'s market value "inexplicable," a day after investors pushed the Silicon Valley auto maker ahead of General Motors Co.
Tesla "is either one of the great Ponzi schemes of all time" or will eventually work out for investors, said AutoNation Inc. Chief Executive Mike Jackson during an interview at a New York automotive event held by J.D. Power and the National Automobile Dealers Association on Tuesday.
Mr. Jackson, among the auto industry's more outspoken executives, called Tesla overvalued and GM undervalued at roughly $33 a share, arguing the former will continue to struggle to make money selling electric vehicles despite a loyal following.
Competition would eventually lead to a correction to the Palo Alto, Calif., company's market value, he said. GM and other auto makers are investing billions of dollars in electric vehicles that are set to hit showrooms in coming years.
A Tesla spokeswoman didn't immediately respond to a request to comment.
Tesla briefly leapfrogged GM
as the most valuable auto maker in the U.S. on Monday when the company's stock price surged to $313.73, valuing it at $51.17 billion. Tesla last week also surpassed
Ford Motor Co. in market value.
Investor enthusiasm for Tesla has continued throughout the year, pushing shares up more than 40% while Detroit auto makers' stock prices have been stuck in neutral. That is despite Tesla's unprofitable operations selling expensive electric cars and sport-utility vehicles, and questions about whether the company can successfully deliver on a mass-market Model 3 car for around $35,000, ramp up production to 500,000 vehicles overall next year and master software enabling self-driving cars.
Mr. Jackson said Tesla Chief Executive Elon Musk deserves accolades for establishing a valued brand that enthusiasts embrace. "You have to tip your hat," Mr. Jackson said. "He has created a brand that has a strong cultlike following."
But Mr. Jackson emphasized that Tesla remains unprofitable selling rarefied luxury vehicles that can run $100,000, so the company's bottom line isn't likely to get a lift from the more-affordable Model 3. "What would impress me about Tesla? Selling vehicles at a profit," Mr. Jackson said. He said it wasn't a good idea to be "giving away vehicles at below the cost of what you have to make them."
With cheap gasoline, electric vehicles remain a sliver of U.S. sales, while fuel-thirsty trucks and SUVs have surged to a 60% share. "This shift to sport-utility vehicles--it is permanent, it is structural, it is long term, because customers passionately love these vehicles," Mr. Jackson said.
Mr. Jackson said he voted for Democrat Hillary Clinton in the November presidential election, concerned about Donald Trump's temperament.
He said Mr. Trump's early days in office have validated his determination. "One minute he's a 70-year-old, the next minute he's a petulant 7-year-old," Mr. Jackson said. He criticized Mr. Trump and congressional Republicans for their recent legislative defeat on health-care overhaul after years of promising to undo the Affordable Care Act passed under President Barack Obama.
But Mr. Jackson painted a positive business landscape under the Trump administration, lauding the president's efforts to curtail regulations and attempts to boost the economy. He praised the White House's recent decision to reopen a review of tough emissions standards requiring companies to sell vehicles averaging 54.5 miles a gallon, or 40 mpg in real-world driving, by 2025. Consumers are turning to trucks and SUVs amid cheap gas, and the advent of fracking is likely to help keep fuel prices low, Mr. Jackson said.
Tim Higgins contributed to this article
Write to Mike Spector at mike.spector@wsj.com and Christina Rogers at christina.rogers@wsj.com
Related
* A-Hed: Musk Has an Awkward Problem at Tesla: Employee Parking
* Tesla Rivals GM as the Most Valuable Auto Maker in U.S.
* Tesla Shares Surpass $300 Mark
* Tesla, on a Hot Streak, Passes Ford in Investor Value
Credit: By Mike Spector and Christina Rogers
Subject: Automobile industry; Investments; Health care policy; Automobile dealers; Electric vehicles; Trucks
Location: New York United States--US Detroit Michigan Palo Alto California
People: Musk, Elon
Company / organization: Name: J D Power & Associates; NAICS: 541910; Name: AutoNation Inc; NAICS: 441110; Name: National Automobile Dealers Association; NAICS: 441110; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Republican Party; NAICS: 813940
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Apr 11, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1886425737
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1886425737?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-01-23
Database: The Wall Street Journal
Like Chaos? Try Tesla's Parking Lot --- Scarce employee spots make curbs, medians fair game
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Apr 2017: A.1.
ProQuest document link
Abstract:
"Employees would enter into exclusive relationships, and payment would be made in the form of cash or a barter deal," such as cigarettes or help rebuilding a car on the weekend, said Marissa Peretz, who spent five years as a recruiter for the auto maker until 2015, when she left to cofound her own headhunting firm.
Full text: Billionaire entrepreneur Elon Musk is reimagining the future of transportation by attempting to build self-driving cars, invent a supersonic railway and launch private citizens into outer space.
What keeps him up at night, though, is the parking lot outside his office window.
"Parking is, like, one of my biggest nightmares -- like, where do we park everyone?" said the Tesla Inc. chief executive, on a recent earnings call with analysts who were trying to probe concerns about the electric-car maker's year ahead.
At Tesla's Palo Alto, Calif., headquarters, uniformed valets dashed about on a recent morning directing traffic and cramming in as many cars as possible. A bumper-to-bumper formation of idle cars snaked through the lanes of the lot, boxing in other vehicles.
At the Tesla factory 30 miles away in Fremont, which has 6,000 employees over the course of various shifts competing for 4,500 vehicle spaces, photos show parking is a free-for-all. Cars are jammed diagonally in spots, propped up on curbs or resting on gravelly medians. One employee documents the worst offenders at both locations on Instagram, using photos sent in by co-workers with snarky and often profane comments.
In one, an old Cadillac is parked in spaces marked for motorcycles -- "He thought it said boat parking." Another shows a haphazard assortment of cars -- "parking spot lines are just a suggestion." A truck fully on the median -- "This one is called: despair."
There is even a shot of the plentiful parking at an office of SpaceX -- the rocket company also run by Mr. Musk -- with the comment, when "you realize Papa Elon picked a favorite child . . . and it wasn't you."
The Instagramming employee said the account began a year ago out of frustration. Tesla recently tried to improve parking in Fremont by repainting the lines to clarify spaces, the employee said, adding that before, "they used to have two sets of faded lines."
Tesla says it's taken steps to improve things, such as offering Wi-Fi-enabled shuttles to both locations, that have improved the Palo Alto situation in recent months -- and that Fremont has more spaces than employees when factoring in overflow parking and shift work.
In Silicon Valley, parking is a classic barometer of booms and busts. Today, shuttle buses from Tesla, Alphabet Inc.'s Google and Facebook Inc. rumble across San Francisco and down Highway 101 to relieve congestion at ever-expanding corporate campuses. Yahoo Inc.'s empty parking spaces in recent years were said to illustrate its troubled times.
Tesla's parking hell reflects a hiring binge that has expanded its head count by about 75% over the past two years to more than 17,000, not including employees of SolarCity Corp., which it acquired late last year. Its market value has soared to about the same level as the largest U.S. auto maker, General Motors Co.
When Tesla announced in 2009 it was leasing the former Hewlett-Packard facility in Palo Alto for its headquarters, it said it planned to have about 350 employees there, with room for as many as 650. Tesla won't disclose how many people work there now, but says it has 600 striped parking spots.
The chaos has forced employees to come up with clever workarounds, including secret deals at the factory to share spots with workers on opposite shifts. "Employees would enter into exclusive relationships, and payment would be made in the form of cash or a barter deal," such as cigarettes or help rebuilding a car on the weekend, said Marissa Peretz, who spent five years as a recruiter for the auto maker until 2015, when she left to cofound her own headhunting firm.
Some workers arrive early to find spaces, and then go back to sleep in their cars until work begins, employees said. Tesla factory worker Jose Moran, who has spoken out against the company's working conditions, said in an interview he tries to arrive an hour before his 5:25 a.m. shift to find parking. That means leaving his home in Manteca, about 60 miles from Fremont, at 3:25 a.m.
Getting out of the lot is a mess, too. Double-parked cars often box others in, causing employees to blow a gasket. The Instagram account captured a photo of a note left on a windshield that read, with some pointed expletives: "Next time you block 100+ people from getting out of the parking lot you're getting your tires slashed" -- signed, "Everyone."
Palo Alto's deputy fire chief, Catherine Capriles, calls Tesla's parking situation a "nightmare." The department has responded to at least three medical emergencies at the headquarters in the past year and ran into trouble when parked vehicles blocked the fire engine from turning or backing out, Ms. Capriles said.
Tesla says it works closely with the fire department to maintain pathways in case of emergencies. Tesla has tried to encourage alternatives to driving. It also tickets scalawags: Parking offenders at the factory can find boots on their tires or their cars towed to a distant overflow lots.
In theory, the self-driving cars Tesla is trying to build could one day alleviate parking headaches by parking themselves at distant lots -- an irony that isn't lost on employees. One Instagram commenter theorized the disarray was a Management plot: "It provides motivation to achieve [fully] autonomous driving as soon as physically possible."
Credit: By Tim Higgins
Subject: Automobile industry; Professional recruitment; Automation; Employees; Automobile parking
Location: Palo Alto California United States--US
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2017
Publication date: Apr 12, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1886561720
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1886561720?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: AutoNation's CEO Calls Tesla Overvalued
Author: Spector, Mike; Rogers, Christina
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Apr 2017: B.3.
ProQuest document link
Abstract:
The head of the U.S.'s largest car-dealership chain called Tesla Inc.'s market value "inexplicable," a day after investors pushed the Silicon Valley auto maker ahead of General Motors Co. Tesla "is either one of the great Ponzi schemes of all time" or will eventually work out for investors, said AutoNation Inc. Chief Executive Mike Jackson during an interview Tuesday at a New York automotive event held by J.D. Power and the National Automobile Dealers Association.
Full text: The head of the U.S.'s largest car-dealership chain called Tesla Inc.'s market value "inexplicable," a day after investors pushed the Silicon Valley auto maker ahead of General Motors Co.
Tesla "is either one of the great Ponzi schemes of all time" or will eventually work out for investors, said AutoNation Inc. Chief Executive Mike Jackson during an interview Tuesday at a New York automotive event held by J.D. Power and the National Automobile Dealers Association.
Mr. Jackson, among the auto industry's more outspoken executives, called Tesla overvalued and GM undervalued at roughly $33 a share, arguing the former will continue to struggle to earn money selling electric vehicles despite a loyal following.
Competition would eventually lead to a correction to the Palo Alto, Calif., company's market value, he said. GM and other auto makers are investing billions of dollars in electric vehicles that are set to hit showrooms in coming years.
A Tesla spokeswoman didn't immediately respond to a request to comment.
Tesla briefly leapfrogged GM as the most valuable auto maker in the U.S. on Monday when the company's stock price surged to $313.73, valuing it at $51.17 billion. Tesla last week also surpassed Ford Motor Co. in market value.
Shares in Tesla fell 1.2% to $308.71 each on Tuesday.
Investor enthusiasm for Tesla has continued throughout the year, pushing shares up more than 40% while Detroit auto makers' stock prices have been stuck in neutral. That is despite Tesla's unprofitable operations selling expensive electric cars and sport-utility vehicles, and questions about whether it can successfully deliver on a mass-market Model 3 car for $35,000, increase production to 500,000 vehicles overall next year and master software enabling self-driving cars.
Mr. Jackson said Tesla Chief Executive Elon Musk deserves accolades for creating a valued brand.
"You have to tip your hat," Mr. Jackson said. "He has created a brand that has a strong cultlike following."
But Mr. Jackson emphasized that Tesla remains unprofitable selling rarefied luxury vehicles that can run $100,000, so the company's bottom line isn't likely to get a lift from the more-affordable Model 3. "What would impress me about Tesla? Selling vehicles at a profit," he said.
With cheap gasoline, electric vehicles remain a sliver of U.S. sales, while fuel-thirsty trucks and SUVs have surged to a 60% share. "This shift to sport-utility vehicles -- it is permanent, it is structural, it is long-term, because customers passionately love these vehicles," Mr. Jackson said.
Mr. Jackson said he voted for Democrat Hillary Clinton in the November presidential election, concerned about Donald Trump's temperament.
He said Mr. Trump's early days in office have validated his determination. "One minute he's a 70-year-old, the next minute he's a petulant 7-year-old," Mr. Jackson said.
But Mr. Jackson offered a positive view of the business landscape under the Trump administration, lauding the president's efforts to curtail regulations and attempts to boost the economy.
---
Tim Higgins contributed to this article.
Credit: By Mike Spector and Christina Rogers
Subject: Automobile dealers; Electric vehicles; Market value; Automobile industry
People: Musk, Elon Jackson, Mike
Company / organization: Name: AutoNation Inc; NAICS: 441110; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Apr 12, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1886568864
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1886568864?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Ford Keeps Its Eyes on the Road Despite Tesla's Passing It; CEO Mark Fields says Ford remains focused on its own business
Author: Rogers, Christina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Ford Motor Co. Chief Executive Mark Fields said Wednesday the company will continue to remain "laser focused" on improving its own business and creating value for shareholders.
He declined to respond directly to questions about Tesla Inc. overtaking Ford last week to become the second-most valuable car maker in the U.S.
"I can only speak about Ford," Mr. Fields said at the New York International Auto Show. "As we've said, we don't manage our company on day-to-day stock movements.
"I'm confident over time we're going to create value for our shareholders," he added.
Ford's stock price has slumped more than 30% since Mr. Fields took over as CEO in mid-2014, despite the car company reporting a string of record profits in recent years and investing billions in emerging technologies, such as electric vehicles and self-driving cars.
The steep decline has allowed Tesla, a 13-year-old electric car maker that sold only 76,000 cars globally last year, to surge pass its much larger rival in market value.
Mr. Fields is working to reshape Ford, including expanding into new services businesses that could potentially deliver higher profit margins, but investors aren't convinced of the company's growth prospects as the U.S. new-car market slows and growth in China tapers off.
Tesla's stock continues to rally, though, defying broader market concerns. On Monday, Tesla briefly leapfrogged General Motors, when the company's stock price climbed to $313.73 a share, pushing the market value to $51 billion.
Tesla shares are up more than 40% this year, while Ford's stock has declined 10% since January amid concerns on Wall Street that the Dearborn, Mich., car maker's profits have peaked and the auto industry is headed into a cyclical downturn.
Ford is forecasting lower pretax operating results in 2017 and estimates U.S. industry sales volumes will fall through this year and next. Company executives expected profits to rebound in 2018, after further belt-tightening and Ford moving passed a period of heavy investment this year.
Tesla's recent stock rally has surprised many in the car business and comes as Chief Executive Elon Musk faces numerous challenges accomplishing the goals he has set out, including building 500,000 vehicles next year. Tesla's output last year was just 84,000 cars.
While the brand has attracted a loyal fan base for its pricey electric cars, the Silicon Valley car company remains deeply in debt and is still struggling to turn a profit.
Ford's North America chief, Joe Hinrichs, said Tuesday that cash flow should influence a company's market value, but that just hasn't been the case in the auto industry. "The market isn't totally rational," he said, when asked about Tesla's market valuation.
Mike Jackson, the head of the nation's largest dealership chain, AutoNation Inc., also described Tesla's stock value as "inexplicable" and said GM is undervalued at $33 a share.
Write to Christina Rogers at christina.rogers@wsj.com
Credit: By Christina Rogers
Subject: Automobile industry; Corporate profits; Profit margins; Stockholders; Electric vehicles
Location: China United States--US
People: Musk, Elon Hinrichs, Joseph R
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Apr 12, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1886781881
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1886781881?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Musk Promises Two New Directors for Tesla Amid Shareholder Criticism; Auto maker's stock has soared in recent months, pushing its valuation past that of Ford Motor Co.
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Chief Executive Elon Musk on Wednesday suggested the Silicon Valley auto maker plans to add two independent directors, responding to pressure from a group of shareholders complaining about the electric-car company's governance.
The criticism came in a letter dated April 10 signed by five investors including the California State Teachers' Retirement System and CtW Investment Group, an arm of the union federation Change to Win. It comes as Tesla's stock has soared in recent months, pushing its valuation past that of Ford Motor Co. to a level rivaling the market capitalization of General Motors Co., the largest U.S. auto maker.
"As long-term investors, we want Tesla to succeed and believe that the company will be most effective if it has the benefit of an updated board and some good governance standards in place," the letter said. It called for recruiting two new directors that don't have prior personal or professional relationships with Mr. Musk and eliminating the staggering of board elections.
Mr. Musk took to Twitter to push back, initially with a snarky riposte saying "This investor group should buy Ford stock. Their governance is amazing..." He added that Tesla had already committed last year to adding more independent members during the process of acquiring SolarCity Corp., where he had also previously served as chairman prior. Asked on Twitter if two more members would be appointed, Mr. Musk responded, "Yeah."
Tesla, unprofitable and in debt, faces many challenges to meet Mr. Musk's ambitious goals, including bringing on a $35,000 Model 3 sedan later this year, boosting production to 500,000 next year from about 84,000 last year and demonstrating a fully self-driving car that can cross the U.S. by the end of this year.
In addition to Mr. Musk, who is chairman, Tesla's seven-member board currently includes his brother, a former top executive for SolarCity, two venture-capital investors, a private-equity investor, and a telecommunications executive.
"The company faces many risks inherent in the execution of its strategy, including the resolution of production challenges in the face of expanding product lines, the successful integration of SolarCity, and increasing competition from traditional car manufacturers," the five investors wrote. "Given the current context, we believe that, now more than ever, having a sound governance foundation will aid in guiding the company as it wrestles with these challenges."
An official Tesla statement said: "We regularly engage with our shareholders and value their feedback. We are actively engaged in a search process for independent board members, which is something we committed to do several months ago, and expect to announce new additions fairly soon."
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Social networks; Professional relationships; Automobile industry; Stockholders; Investments
Location: California United States--US
Company / organization: Name: CtW Investment Group; NAICS: 525110; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Apr 12, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1886850143
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1886850143?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
What Is Tesla Really Worth? Auto maker rivals Ford, GM in market cap; profits are far behind
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Apr 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. is valued as though it will soon conquer the U.S. auto market. Now, it has the small task of actually doing so.
Tesla shares have been unstoppable ahead of the Model 3 launch, having gained 40% this year. The upstart auto maker is more valuable than Ford and slightly less valuable than General Motors on a market cap basis. The crux of the excitement is the all-electric Model 3 sedan that Tesla says will start at $35,000. Production is scheduled to begin this summer.
Tesla now trades at 271 times projected 2018 adjusted earnings, according to FactSet. Ford and GM, in contrast, trade at less than seven and six times the 2018 estimate, respectively. Tesla gets that valuation because it is expected to upend the auto industry, while earning big profits that would bring down the multiple.
But to actually earn enough profits to reduce Tesla's multiple to something in the realm of reasonable would require almost heroic assumptions. First, the basics: Say Tesla's valuation should be 10 times higher than GM and Ford's, and say Tesla's share price stays constant at about $300. That means Tesla would need to earn $4.29 a share in 2018, which equals $700 million in total net income, assuming the current share count doesn't change.
For perspective , Tesla sold about 76,000 cars in 2016 and lost $675 million on sales of $7 billion.
Now the assumptions: CEO Elon Musk forecasts Tesla can produce 500,000 cars in 2018, while analysts, a bullish lot, peg the number of deliveries at 302,000. Let's say the delivery number is 380,000. Pencil in an average selling price of $50,000--Tesla will still be selling high-priced Model S and Model X vehicles along with the Model 3. That scenario yields just under $21 billion in automotive revenue. Add another $2 billion in sales from its residential solar and energy businesses.
Tesla has never generated a positive operating margin for a full year, but assume it gets savings on battery costs and realizes economies of scale. If Tesla gets the same 5.4% operating margin that GM and Ford averaged last year, it would generate operating income of $1.1 billion. Subtract $200 million for interest expense and tax the remainder at 25%: The result is $700 million in net income, giving Tesla a multiple roughly 10 times bigger than GM and Ford.
To get there, the company would have to quintuple the number of cars it sells, earn margins equivalent to those of its highly efficient competitors and not sell new shares. Tweak any of these variables--lower sales, lower margin, lower selling price--and Tesla doesn't come close to earning enough to get to 10 times the multiple of its bigger rivals by the end of 2018.
Valuation has never mattered before for Tesla's investors and it may not matter at the end of next year. Shareholders may be willing to wait five years instead of two for Tesla to generate big profits, or they may continue to figure that valuation doesn't matter for a game-changer like Tesla.
Tesla's cars have always outshone its financials. That needs to change soon for its valuation to make sense.
Write to Charley Grant at charles.grant@wsj.com
Get financial insights and commentary on global investing from The Wall Street Journal's Heard on the Street team. Subscribe to the podcast.
Credit: By Charley Grant
Subject: Profits; Financial performance; Valuation; Competition
Location: United States--US
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Apr 17, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1888557434
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1888557434?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Google Makes Nevada Land Grab for Data Center; Alphabet unit pays $29.1 million for 1,210 acres a few miles south of Tesla's battery 'gigafactory'
Author: Nicas, Jack; Carlton, Jim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Apr 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Corrections & Amplifications
Apple Inc. has a data center near the Tahoe Reno Industrial Center. Also, Alphabet limits the speeds of its self-driving cars on a test track in Merced County, Calif. An earlier version of this article about Google buying land in the center incorrectly said Apple's operations were in it as well. It also incorrectly stated Alphabet's self-driving cars were specifically limited to 35 miles an hour on the test track and on public roads. (April 17, 2017)
Tesla Inc.'s "gigafactory" has a big new neighbor: Google.
Google last week bought land stretching across 1,210 acres at a private industrial park east of Reno, Nev., for $29.1 million, according to people familiar with the deal and documents filed late Friday in Storey County, Nev.
The Alphabet Inc. unit aims eventually to build a data center at the 107,000-acre Tahoe Reno Industrial Center, according to these people. Google, which made the deal through a subsidiary called Silver Slate LLC--created in Delaware in August--has no immediate plans to build, according to a person close to the company.
The vacant desert tract near Electric Avenue is several miles south of the 3,200 acres where Tesla is building its $5 billion battery factory, which could be the world's biggest building at 10 million square feet when it is completed in the next several years.
Once known for casinos and brothels, Reno is now attracting corporations drawn by its low costs, lenient permitting rules and relative proximity to Silicon Valley . Other big corporations that have recently built data centers, factories and distribution centers at the industrial park include Wal-Mart Stores Inc. and eBay Inc.
Google is aggressively expanding its network of computers--likely already the biggest in the world--to support its core internet business and its push into selling computing power over the internet, known as cloud computing .
The company believes its cloud business could one day eclipse the advertising business that accounted for 88% of Alphabet's $90 billion in sales last year. Google and cloud rivals Amazon.com Inc. and Microsoft Corp. are collectively spending billions of dollars each year on data centers , vast warehouses of computer servers.
A Google data center near Reno would likely leverage new fiber-optic connections at the industrial park. Internet-infrastructure company Switch LPD recently connected Silicon Valley, Los Angeles, Las Vegas and the Tahoe Reno Industrial Center with high-speed cable that can deliver data around the loop in less than 14 milliseconds, or thousandths of a second.
Some officials in Reno said rumors of Google's expansion there have swirled for two years. The deal was cloaked in secrecy, with some officials saying they had been required to sign multiple nondisclosure agreements. "The company that shall remain unnamed" is how one person referred to Google when asked about it. Others around town have called the sale "the megadeal."
The industrial center has been a big draw. Its top pitchman, Lance Gilman, is a cowboy-hatted real-estate broker and county politician who also owns the World Famous Mustang Ranch--as it is labeled on Google Maps--a legally licensed bordello near the edge of the park.
In 2014, Reno won a multicity competition to become home to Tesla's battery plant . A year later, Switch said it was spending $1 billion to build the world's largest data center at the park. Numerous deals like these since 2011 have added more than 30,000 jobs in the metropolitan area, home to about a half million people.
Google's expanse of land is so large that it could easily house more than just a data center, which has led to speculation among people connected to the deal that it may eventually be used for driverless-car research or operations. Some officials believe Alphabet will use the new land for a track where it could test its self-driving cars at highway speeds. Speeds are limited on a private track in Merced County, Calif., where Alphabet now tests, a former employee said.
Nevada Gov. Brian Sandoval is sponsoring legislation that would allow self-driving cars to operate as taxis. Alphabet, Ford Motor Co. and Uber Technologies Inc. are among the companies backing the bill.
Auto- and tech-industry analysts expect Alphabet to eventually operate its self-driving cars as taxis, a service that would likely require a depot for storing and servicing the vehicles--which could make owning land in Nevada useful in the near future.
Richard Teitelbaum contributed to this article.
Write to Jack Nicas at jack.nicas@wsj.com and Jim Carlton at jim.carlton@wsj.com
Credit: Jack Nicas; Jim Carlton
Subject: Computer centers; Automobile industry; Internet; Factories
Location: Los Angeles California Delaware Las Vegas Nevada Merced County California
Company / organization: Name: Amazon.com Inc; NAICS: 454111; Name: Wal-Mart Stores Inc; NAICS: 452112, 452910; Name: Microsoft Corp; NAICS: 334614, 511210; Name: eBay Inc; NAICS: 454112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Apr 17, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1888940386
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1888940386?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla's Robotics Unit Faces Threat of Strike in Germany; The labor dispute is over wages for the workforce at Grohmann Engineering
Author: Boston, William; Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Apr 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Elon Musk is getting a quick introduction to the bare-knuckle world of German labor unions as the country's largest industrial union mulls a strike at Tesla Inc.'s recently acquired industrial robotics subsidiary.
The labor dispute is over wages for the workforce at Grohmann Engineering, a German manufacturing automation designer that Tesla acquired in a $150 million deal that closed in January.
IG Metall, the country's powerful industrial trade union, could decide later Tuesday to call a strike in an attempt to force Tesla to negotiate a wage deal, a union official said in an interview.
"We don't want to strike," said Patrick Georg, the IG Metall official responsible for Tesla. "We will only do so if Tesla refuses to agree to a wage contract with us."
The threat of labor unrest in Germany looms over Tesla as the electric-car company prepares to begin initial production of the Model 3, a $35,000 sedan that holds the promise of giving the auto maker a broader appeal beyond its niche luxury market.
Disruptions to Mr. Musk's plans to boost annual production to 500,000 next year from about 84,000 last year could shake investor confidence, which has pushed shares to new heights and lifted Tesla's market value to rival General Motors Co. as the largest U.S. auto maker.
Grohmann, rebranded Tesla Grohmann Automation, is part of Mr. Musk's plans to boost the young auto maker's production capabilities for the Model 3 sedan and his vision of creating a highly automated and efficient factory able to quickly adapt production to rising demand that he likes to call "machine that builds the machine."
Tesla disputes that it pays Grohmann workers 30% below union wages following changes made by the auto maker after taking over. It noted an announcement last week that everyone would be granted [euro]10,000 ($10,644) worth of Tesla shares that vest over four years. Plus, employees were given a [euro]1,000 cash bonus.
Those changes were described as among the first made by Tesla as it reviews compensation compared to industry standards and the local cost-of-living. The auto maker also disputes a surge of union interest among its German employees, saying more than 100 employees have signed a petition against the union.
"We continue to work directly with Tesla Grohmann employees and are prepared in the event there is an action initiated by the union," Tesla said in a statement. "We don't anticipate any impact on the Model 3 timeline."
Write to William Boston at william.boston@wsj.com and Tim Higgins at Tim.Higgins@WSJ.com
Credit: William Boston; Tim Higgins
Subject: Labor disputes; Automobile industry; Wages & salaries; Labor unions; Automation; Employees; Robotics
Location: United States--US Germany
Company / organization: Name: General Motors Corp; NAICS: 333415, 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Apr 18, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1888938186
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1888938186?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Faces Labor Unrest in German Subsidiary
Author: Boston, William; Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]19 Apr 2017: B.4.
ProQuest document link
Abstract:
The threat of labor unrest in Germany looms over Tesla as the electric-car company prepares to begin initial production of the Model 3, a $35,000 sedan that holds the promise of giving the auto maker a broader appeal beyond its niche luxury market.
Full text: Elon Musk is getting a quick introduction to the bare-knuckle world of German labor unions as the country's largest industrial union mulls a strike at Tesla Inc.'s recently acquired industrial robotics subsidiary.
The labor dispute is over wages for the workforce at Grohmann Engineering, a German manufacturing automation designer that Tesla acquired in a $150 million deal that closed in January.
IG Metall, the country's powerful industrial trade union, met at the Tesla unit on Tuesday to discuss how to proceed, said Patrick Georg, the IG Metall official responsible for Tesla. It's unclear whether the union reached a decision to strike.
"We don't want to strike," Mr. Georg said. "We will only do so if Tesla refuses to agree to a wage contract with us."
The threat of labor unrest in Germany looms over Tesla as the electric-car company prepares to begin initial production of the Model 3, a $35,000 sedan that holds the promise of giving the auto maker a broader appeal beyond its niche luxury market.
Disruptions to Mr. Musk's plans to boost annual production to 500,000 next year from about 84,000 last year could shake investor confidence, which has pushed shares to new heights and lifted Tesla's market value to rival General Motors Co. as the largest U.S. auto maker. Grohmann, rebranded Tesla Grohmann Automation, is part of Mr. Musk's plans to boost the young auto maker's production capabilities for the Model 3 sedan and his vision of creating a highly automated and efficient factory.
Tesla disputes that it pays Grohmann workers 30% below union wages following changes made by the auto maker after taking over. It noted an announcement last week that everyone would be granted 10,000 euros ($10,644) of Tesla shares that vest over four years. Plus, employees were given a 1,000 euro cash bonus. Those changes were described as among the first made by Tesla as it reviews compensation. The auto maker also disputes a surge of union interest among its German employees, saying more than 100 employees have signed a petition against the union. Grohmann employs 700 people, and more than half of them are union members, said IG Metall.
"We continue to work directly with Tesla Grohmann employees and are prepared in the event there is an action initiated by the union," Tesla said. "We don't anticipate any impact on the Model 3 timeline."
Credit: William Boston, Tim Higgins
Subject: Automation; Automobile industry; Robotics; Labor disputes; Wages & salaries; Automobile production
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2017
Publication date: Apr 19, 2017
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1889348732
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1889348732?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Settles Lawsuit Against Former Autopilot Director; Sterling Anderson had left car maker to form an autonomous vehicle startup
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Apr 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. has settled a lawsuit against the former director of its semiautonomous Autopilot system, clearing the way for a prominent self-driving car executive to build a company that could become a threat to the Silicon Valley car maker.
Sterling Anderson, who left Tesla in January to form an autonomous-vehicle startup with the former head of Alphabet Inc.'s Google car project, was accused by the electric-car maker of taking proprietary documents and improperly colluding to recruit Autopilot workers.
The lawsuit cast a cloud over the fledgling Aurora Innovation LLC, whose pedigree could draw the eye of auto makers and tech companies looking to catch up in the self-driving space.
Tesla and Aurora said on Wednesday they reached a settlement agreement. Aurora agreed to a nonsolicitation agreement with Tesla employees and to audits of its files to ensure any data allegedly taken wasn't used by Aurora. The startup also agreed to pay Tesla $100,000.
Aurora called the lawsuit meritless and said the agreement finds no wrongdoing, pointing to a third-party forensics review that found no confidential Tesla information on its systems or evidence that it had used or accessed the auto maker's files.
"In spite of this distraction, we've made great progress [these] last few months and are excited to now focus all of our energy on making transportation safer and better for all," Aurora said in a statement. "We've been developing self-driving vehicles since long before it was trendy, and remain committed to bringing this important technology to market with the right team, doing things the right way."
Tesla said in a statement that the settlement "establishes a process to allow Tesla to recover all of the proprietary information that was taken from the company, and it provides for Aurora's computer systems to be subject to ongoing audits to monitor for any improper retention or use of Tesla's property."
The competition for self-driving tech is intense as most major auto makers and tech giants--including Uber Technologies Inc. and Waymo LLC, the self-driving unit of Google-parent Alphabet--are fighting for a technological edge that could reshuffle the players among the $2 trillion in annual revenue tied to the U.S. automotive industry, according to estimates by Deloitte Consulting. Many of these companies are aiming to put commercial vehicles on roadways in the next few years.
Tesla filed the lawsuit in January , exposing a rift between Mr. Anderson and Chief Executive Elon Musk, who had been pushing the Autopilot team to update the software and hardware after a May 2016 fatal crash that raised questions about safety. In January, U.S. regulators closed their investigation of the crash after finding no defects in the technology.
Among the allegations in the lawsuit against Mr. Anderson, Tesla accused him of scheming with Chris Urmson, the former head of the Google self-driving project, to improperly recruit Autopilot team members for their new startup. Tesla accused them of trying to cash in on the intense interest in self-driving technology.
Traditional auto makers have been stepping up their efforts in the space. General Motors Co. acquired San Francisco startup Cruise Automation last year in a deal that could be valued at about $1 billion to accelerate its bid to bring out self-driving vehicles. Ford Motor Co. is investing $1 billion into Argo AI, a startup co-founded by Bryan Salesky, another star from the Google self-driving project.
Other tech players are paying high prices to be competitive. Intel Corp., for example, has a deal to pay a 34% premium to buy Mobileye NV, an auto supplier that has created a vision-based system for cars to see the world. Samsung Electronics Co. agreed to pay a 28% premium to acquire Harman International Industries Inc. to help bolster its efforts to expand in the car business.
Waymo is waging a legal battle of its own against Uber and another former Google executive, Anthony Levandowski, accusing him of stealing secret files for his self-driving truck maker, Otto, which he quickly sold to Uber.
The ride-hailing startup has called the claims unfounded , and attorneys for Mr. Levandowski have invoked his Fifth Amendment rights because of potential criminal charges. The spat has erupted into a high-profile court case that threatens to impede Uber's efforts to bring out a self-driving service that its executives see as crucial to its long-term survival.
Mr. Anderson, who oversaw a team developing Autopilot since November 2015, was seen as a key talent for Tesla. Autopilot has fueled investor interest in Tesla as a leading contender to develop a fully automated driving system. Shares of Tesla have soared this year, pushing the company's market value to rival GM as the largest U.S. auto maker despite being unprofitable, deeply in debt and having a fraction of vehicle sales.
In the lawsuit, Tesla said Mr. Anderson gave notice of his intent to leave the auto maker in December and that he agreed to stay on board while the company raced to complete updates to software for the new hardware. Tesla had said it didn't know he planned to create a competing startup.
In January, Tesla named Chris Lattner from Apple Inc. to serve as vice president of Autopilot software.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Agreements; Automobile industry; Startups; Autonomous vehicles
Location: United States--US
People: Anderson, Sterling
Company / organization: Name: Alphabet Inc; NAICS: 551114; Name: Google Inc; NAICS: 519130; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Apr 19, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place ofpublication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1889529099
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1889529099?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Reaches Settlement
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Apr 2017: B.2.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. has settled a lawsuit against the former director of its semiautonomous Autopilot system.
Sterling Anderson, who left Tesla in January to form an autonomous-vehicle startup with the former head of Alphabet Inc.'s Google car project, was accused by the electric-car maker of taking proprietary documents and improperly colluding to recruit Autopilot workers.
Aurora Innovation LLC agreed to a nonsolicitation agreement with Tesla employees and to audits of its files to ensure any data allegedly taken wasn't used by Aurora. The startup also agreed to pay Tesla $100,000.
Credit: By Tim Higgins
Subject: Settlements & damages
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2017
Publication date: Apr 20, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1889638054
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1889638054?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Recalls Model S and Model X Vehicles Over Faulty Parking Brakes; The voluntary recall involves about 53,000 vehicles
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Apr 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. said Thursday it is recalling 53,000 Model S sedan and Model X sport-utility vehicles over an issue with electric-parking brakes that could prevent them from being released.
The Silicon Valley auto maker said it is issuing the voluntary recall "to be overly cautious" despite no reported accidents or injuries. The recall covers vehicles made between February and October 2016 and involves a small gear that, if it were to break, would keep the brake stuck in place, Tesla said.
Tesla said the issue affects less than 5% of vehicles being recalled.
"We do not believe this issue could ever lead to a safety concern for our customers, and we have not seen a single accident or injury relating to it," Tesla said on its website.
Tesla's shares were down about 1.2% in afternoon trading in New York. The stock has soared in recent months ahead of Tesla's planned release of a lower-price sedan, sending the company's market capitalization near that of General Motors Co., the largest U.S. auto maker.
Tesla this month reported its best sales quarter , delivering roughly 25,000 vehicles in the first period thanks in part to a new SUV. Last year it sold about 76,000 vehicles globally, just shy of its 80,000 sales estimate.
Chief Executive Elon Musk is preparing the company to bring out the Model 3, a $35,000 sedan that he is betting will shift the auto maker from a luxury niche to a more mainstream brand.
Mr. Musk has faced difficulties launching vehicles in the past, and investors are alert to any production issues at the auto maker's Fremont, Calif., factory.
"Our initial take on Tesla's announcement today is that the selloff in shares may be overdone and would generally view this as a relative nonevent," Jamie Albertine, an analyst for Consumer Edge Research, said in a note to investors.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Product recalls
Location: United States--US New York
People: Musk, Elon
Company / organization: Name: General Motors Corp; NAICS: 333415, 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Apr 20, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1889836151
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1889836151?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproducti on or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla to Double Number of EV Chargers at Stations; Tesla addresses complaints from owners of its electric vehicles about long waits
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Apr 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. plans to double the number of chargers for its electric cars at its stations globally, after owners complained of long wait times and crowds at popular locations.
The Silicon Valley auto maker began the year with more than 5,000 individual chargers at its 790 so-called Supercharger stations globally. The plan announced on Monday calls for increasing the number of chargers to more than 10,000 this year. The company declined to say how many additional sites would be added, while saying it would broaden locations within city centers.
Plans for the build-out come ahead of the introduction later this year of the Model 3, a $35,000 sedan that Tesla Chief Executive Elon Musk is betting will make his company more mainstream and less of a niche luxury player. He is targeting overall production, including the existing Model S sedans and Model X SUVs, of 500,000 vehicles next year, up from about 84,000 last year.
"The ongoing expansion of the networks will ensure that Tesla drivers are able to quickly and easily charge their vehicles no matter what, and that a seamless charging experience remains our priority," the company said in a statement.
Ahead of the Model 3 introduction, Mr. Musk has been working to alleviate complaints about overcrowding at the Supercharger stations, which recharge Tesla electric vehicles far faster than conventional chargers and are intended for long-distance travelers. The network began in 2012 and has served as a unique perk of ownership; but in November Tesla announced that this year it would stop providing unlimited free access to the charging stations for buyers of new vehicles.
Tesla understands the danger of having too few places to charge its vehicles. In a March filing, it said the growing number of its vehicles on the road "will require us to continue to increase the number of our Supercharger stations significantly." It added that the expansion will require "significant cash investments," and that "if we fail to do so, our customers could become dissatisfied, which could adversely affect sales of our vehicles."
Colin Langan, an analyst for UBS, in March estimated that it could cost Tesla between $1.9 billion and $7.5 billion to build out its fast-charging stations in the U.S. to provide a coverage area similar to gas stations. "Investors are underestimating the capex in Supercharger and store/service infrastructure required for Tesla to meet high volume demand in the future," Mr. Langan wrote in a note to investors.
Tesla plans to increase the number of chargers by 150% in North America and by more than 1,000 in California, it said on Monday.
"Tesla will build larger sites along our busiest travel routes that will accommodate several dozen Teslas supercharging simultaneously," the company said. "Many sites will be built further off the highway to allow local Tesla drivers to charge quickly when needed, with the goal of making charging ubiquitous in urban centers."
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Electric vehicles
Location: California United States--US
People: Musk, Elon
Company / organization: Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Apr 24, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1891161614
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1891161614?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla to Bulk Up EV Stations
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]25 Apr 2017: B.4.
ProQuest document link
Abstract:
Ahead of the Model 3 introduction, Mr. Musk has been working to alleviate complaints about overcrowding at the Supercharger stations, which recharge Tesla electric vehicles far faster than conventional chargers and are intended for long-distance travelers.
Full text: Tesla Inc. plans to double the number of chargers for its electric cars at its stations globally, after owners complained of long wait times and crowds at popular locations.
The Silicon Valley auto maker began the year with more than 5,000 individual chargers at its 790 so-called Supercharger stations globally. The plan announced on Monday calls for increasing the number of chargers to more than 10,000 this year. The company declined to say how many additional sites would be added, while saying it would broaden locations within city centers.
Plans for the build-out come ahead of the introduction later this year of the Model 3, a $35,000 sedan that Tesla Chief Executive Elon Musk is betting will make his company more mainstream and less of a niche luxury player. He is targeting overall production, including the existing Model S sedans and Model X SUVs, of 500,000 vehicles next year, up from about 84,000 last year.
"The ongoing expansion of the networks will ensure that Tesla drivers are able to quickly and easily charge their vehicles no matter what, and that a seamless charging experience remains our priority," the company said.
Ahead of the Model 3 introduction, Mr. Musk has been working to alleviate complaints about overcrowding at the Supercharger stations, which recharge Tesla electric vehicles far faster than conventional chargers and are intended for long-distance travelers. The network began in 2012 and has served as a unique perk of ownership; but in November Tesla announced that this year it would stop providing unlimited free access to the charging stations for buyers of new vehicles.
Tesla understands the danger of having too few places to charge its vehicles. In a March filing, it said the growing number of its vehicles on the road "will require us to continue to increase the number of our Supercharger stations significantly." It added that the expansion will require "significant cash investments," and that "if we fail to do so, our customers could become dissatisfied, which could adversely affect sales of our vehicles."
Colin Langan, an analyst for UBS, in March estimated that it could cost Tesla between $1.9 billion and $7.5 billion to build out its fast-charging stations in the U.S. to provide a coverage area similar to gas stations. "Investors are underestimating the capex in Supercharger and store/service infrastructure required for Tesla to meet high volume demand in the future," Mr. Langan wrote in a note to investors.
Tesla plans to increase the number of chargers by 150% in North America and by more than 1,000 in California.
"Tesla will build larger sites along our busiest travel routes that will accommodate several dozen Teslas supercharging simultaneously," it said.
Credit: By Tim Higgins
Subject: Electric vehicles; Automobile industry
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2017
Publication date: Apr 25, 2017
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1891313590
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1891313590?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
The Long and Short of Tesla's Business Model; Holman Jenkins wonders if Tesla's massive market cap may perhaps be justified by its batteries becoming a "near-monopoly standard.
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Apr 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: "Tesla Bulls Are Betting on Musk, Not the Car Business " (Business World, April 15), Holman Jenkins wonders if Tesla's massive market cap may perhaps be justified by its batteries becoming a "near-monopoly standard." In fact, Tesla's battery cells are made by Panasonic (within a roof and four walls known as the Gigafactory 1 provided by Tesla). Tesla just assembles them into packs, a business which in Q4 of 2016 (the most recent financial statement available) brought Tesla a double-digit negative gross margin. Storage batteries are in fact a near commodity produced by scores of Tesla competitors, many of which are much deeper-pocketed than Tesla (albeit nowhere near as dominant in the hype department). There will never be a "near-monopoly standard" because a kilowatt-hour of electricity is a kilowatt-hour of electricity.
This is one of myriad reasons why I'm short Tesla's stock, with the primary one being the massive amount of automotive competition the company will soon face. Yet even before that competition arrives, Tesla will have seen four consecutive quarters (Q3 of 2016 through Q2 of 2017) of zero growth in its money-losing automotive business.
Mark Spiegel
New York
Elon Musk is building a vertically integrated company designed to be the big player in the coming revolution of electric cars, solar panels and home-energy storage. Consider: Tesla will soon be marketing a $35,000 car for which it has 400,000 reservations. Tesla has the world's largest battery plant, the Gigafactory 1, which will supply all the batteries for Tesla and sell them to other car makers as well. Tesla sells the PowerWall, a home battery that will store energy from solar panels that look like roof tiles, a business that Tesla has entered with its recent purchase of SolarCity. I would be surprised if Mr. Musk isn't already negotiating with home builders to incorporate solar roofs into their new buildings, eliminating the obstacle of upfront cost for the home buyer who wants solar. I submit that, contrary to Mr. Jenkins's opinion, some of us have a very clearly defined vision of the future.
Kerry Smith
Woodbury, Minn.
Subject: Automobile industry; Batteries
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Apr 26, 2017
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1892041893
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1892041893?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
The Long and Short of Tesla's Business Model
Author: Anonymous
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 Apr 2017: A.16.
ProQuest document link
Abstract:
[...]Tesla's battery cells are made by Panasonic (within a roof and four walls known as the Gigafactory 1 provided by Tesla).
Full text: "Tesla Bulls Are Betting on Musk, Not the Car Business" (Business World, April 15), Holman Jenkins wonders if Tesla's massive market cap may perhaps be justified by its batteries becoming a "near-monopoly standard." In fact, Tesla's battery cells are made by Panasonic (within a roof and four walls known as the Gigafactory 1 provided by Tesla). Tesla just assembles them into packs, a business which in Q4 of 2016 (the most recent financial statement available) brought Tesla a double-digit negative gross margin. Storage batteries are in fact a near commodity produced by scores of Tesla competitors, many of which are much deeper-pocketed than Tesla (albeit nowhere near as dominant in the hype department). There will never be a "near-monopoly standard" because a kilowatt-hour of electricity is a kilowatt-hour of electricity.
This is one of myriad reasons why I'm short Tesla's stock, with the primary one being the massive amount of automotive competition the company will soon face. Yet even before that competition arrives, Tesla will have seen four consecutive quarters (Q3 of 2016 through Q2 of 2017) of zero growth in its money-losing automotive business.
Mark Spiegel
New York
---
Elon Musk is building a vertically integrated company designed to be the big player in the coming revolution of electric cars, solar panels and home-energy storage. Consider: Tesla will soon be marketing a $35,000 car for which it has 400,000 reservations. Tesla has the world's largest battery plant, the Gigafactory 1, which will supply all the batteries for Tesla and sell them to other car makers as well. Tesla sells the PowerWall, a home battery that will store energy from solar panels that look like roof tiles, a business that Tesla has entered with its recent purchase of SolarCity. I would be surprised if Mr. Musk isn't already negotiating with home builders to incorporate solar roofs into their new buildings, eliminating the obstacle of upfront cost for the home buyer who wants solar. I submit that, contrary to Mr. Jenkins's opinion, some of us have a very clearly defined vision of the future.
Kerry Smith
Woodbury, Minn.
Subject: Automobile industry; Batteries
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.16
Publication year: 2017
Publication date: Apr 27, 2017
Section: Letters to the Editor
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1892101617
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1892101617?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Elon Musk, Mark Zuckerberg, Satya Nadella, Irene Rosenfeld: People to Watch This Week; CEOs of Tesla, Facebook, Microsoft and Mondelez will be providing business insights in the week ahead
Author: Jamerson, Joshua
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Apr 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Elon Musk, whose Tesla Inc. will report earnings Wednesday afternoon, is expected to give fresh insight on the launch of the Model 3. Mr. Musk hopes the sedan will make his electric-car company more mainstream and less of a niche luxury player. In a talk Friday, Mr. Musk didn't back down from his aggressive target date to begin production, saying July is "looking quite good ." Many stocks have ridden a market rally to fresh highs, but Tesla's shares have been on a hot streak, outperforming the broader market. The S&P 500 has climbed 6.5% this year, while Tesla's stock has jumped by 47%. It recently passed Ford Motor Co. and now rivals General Motors Co. as the biggest auto maker in the U.S. by market value.
Microsoft Corp. Chief Executive Satya Nadella is scheduled to provide a keynote address Tuesday at an event in New York, where the company plans to unveil education offerings. While few details have been revealed, there is industry speculation that the software giant and its partners will debut low-cost laptops and tablets to compete with the Chromebooks from Alphabet Inc.'s Google. Devices running Chrome OS accounted for 58% of operating-system shipments to the U.S. kindergarten through 12th-grade market in 2016, according to Futuresource Consulting Ltd. Microsoft's Windows registered a 22% share. Its hardware operations have been plagued by weakness in its Surface line of computers, where revenue dropped 26% in the quarter reported Thursday . Mr. Nadella spoke at the last big Windows launch event: the unveiling of the Windows 10 Creators Update last fall in New York. Microsoft also is likely to unveil software designed for students and teachers.
Investors in Mondelez International Inc. will look to Chief Executive Irene Rosenfeld for updates on her company's new growth plan, which includes focusing more on its core snacks brands, such as Oreos, Cadbury chocolate and Trident gum. Mondelez's plan also includes expanding its e-commerce operations. Mondelez is set to report earnings Tuesday afternoon during a tough time for the confectionary space, which has been pressured by more consumers shifting their eating habits to items they see as more nutritious. Growth is hard to come by--Mondelez's revenue fell about 13% in 2016, in part due to currency headwinds--and the company has looked to acquisitions to help lift results and streamline operations. But its bid for rival Hershey was rejected, and Mondelez eventually walked away from a deal.
Mark Zuckerberg's Facebook Inc. has come under fire lately for how the social network can be used to broadcast disturbing or violent videos, a grisly reality brought back into public discourse when a man in Thailand on Monday live-streamed himself on Facebook killing his baby daughter . Following the filmed shooting death of an elderly man in Cleveland earlier in April, the company has said it would conduct a deeper review of how it handles objectionable content. Mr. Zuckerberg likely will face questions about his plans for addressing those issues during an earnings call with analysts on Wednesday. Investors also will be looking to see if Facebook, which boasted 1.86 billion monthly active users as of the end of last year, can show it can preserve profits or present a convincing case it will be able to shore them up down the road. Facebook said its growth in ad revenue would drop "meaningfully" in 2017 as it stops stuffing more ads in users' news feeds, but Instagram is thought to be a major source of new growth.
Jay Greene contributed to this article.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
Credit: By Joshua Jamerson
Subject: Automobile industry; Investments; Social networks; Competition
Location: United States--US New York
People: Rosenfeld, Irene Nadella, Satya Musk, Elon
Company / organization: Name: Alphabet Inc; NAICS: 551114; Name: Microsoft Corp; NAICS: 334614, 511210; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Facebook Inc; NAICS: 518210, 519130; Name: Google Inc; NAICS: 519130; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Mondelez International Inc; NAICS: 311821; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Apr 29, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1892950489
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1892950489?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla's Musk Dreams Big About Traffic --- Startup would create underground network of roadways designed to curb congestion
Author: Winkler, Rolfe
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]01 May 2017: B.4.
ProQuest document link
Abstract:
Mr. Musk, chief executive of electric-car maker Tesla Inc., rocket company Space Exploration Technologies Corp., or SpaceX, and the nascent brain-computer company Neuralink Corp., used an appearance at the TED 2017 conference in Vancouver to show the first concept video for the Boring Co., a startup he hopes would help kick-start a tunnel network underneath Los Angeles to alleviate traffic congestion.
Full text: Silicon Valley entrepreneur Elon Musk showed off more ambitious, often head-scratching projects Friday, including an underground roadway system beneath cities that would zip cars through tunnels.
Mr. Musk, chief executive of electric-car maker Tesla Inc., rocket company Space Exploration Technologies Corp., or SpaceX, and the nascent brain-computer company Neuralink Corp., used an appearance at the TED 2017 conference in Vancouver to show the first concept video for the Boring Co., a startup he hopes would help kick-start a tunnel network underneath Los Angeles to alleviate traffic congestion.
He also reiterated Tesla's plan to announce "probably four" more of its giant battery factories by year-end and showed a photo of an electric semi truck, which the company has said would reveal in more detail in September.
The talk also included previous animations Mr. Musk has shown of a rocket SpaceX proposes to build to send people to Mars.
He didn't discuss his newest company, Neuralink.
Mr. Musk is a hero to technology types who believe he can usher in a science fiction-inspired future, and often criticized by some Wall Street investors for making what they see as ridiculous promises. He has delivered highly popular electric vehicles and built the first company to return a rocket booster from orbit and launch it again. On the other hand, he has burned through billions in capital and routinely misses aggressive product-release schedules.
He said he is devoting just 2% to 3% of his time to the Boring Co., which he said is staffed today with interns and part-timers and works with secondhand machinery. But TED audience members seemed no less wowed by the company's first concept video.
The animation showed elevators built into the street that would lower cars to a tunnel network running on many levels, where they would travel on high-speed "skates" along what appear to be magnetic rails.
These skates, Mr. Musk said, would top out at roughly 130 miles an hour.
To lower the cost of current tunneling technology, and make his network possible, Mr. Musk said he would decrease tunnel diameter and develop boring machines that could reinforce tunnels as they go, speeding the digging process.
Days after Uber Technologies Inc. revealed plans to test flying carsin three years, Mr. Musk criticized the idea of taking to the skies to alleviate road traffic.
"If something is flying over your head . . . that is not an anxiety-reducing situation," he said. As a person walking down the street, "you're thinking, 'Did they service their hubcap, or is it going to come off and guillotine me?' "
---
Eliot Brown contributed to this article.
Credit: By Rolfe Winkler
Subject: Traffic congestion
Location: Los Angeles California
Company / organization: Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Uber Technologies Inc; NAICS: 511210, 518210; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2017
Publication date: May 1, 2017
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1893442888
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1893442888?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Earnings: What to Watch; The auto maker is coming off its best-ever sales period
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc.'s first-quarter financial results are expected to be released after the market closes on Wednesday. Here's what you need to know:
EARNINGS FORECAST: Tesla is expected to post an adjusted loss of 81 cents a share, according to the average estimate of 17 analysts surveyed by Thomson Reuters. That compares to an adjusted loss of 57 cents a share a year earlier.
REVENUE FORECAST: First-quarter revenue is forecast to rise to $2.61 billion from $1.15 billion during the same period a year ago. Deliveries of the Model S sedan and Model X sport-utility vehicle rose to about 25,000 during the quarter, a 69% gain from the same quarter in 2016. It was the best quarter of sales for the auto maker founded in 2003, topping its previous record during the third quarter of 2016.
WHAT TO WATCH:
-MODEL 3. Investor enthusiasm ahead of the rollout of the Model 3 sedan later this year has pushed the company's stock to record highs, taking its market cap above those of General Motors Co. and Ford Motor Co., the two largest U.S. auto makers by sales. Wall Street will be looking for any updates on Tesla's progress to meet its July production deadline for the electric sedan that is meant for the masses.
-ROBOTS. Tesla has been tangling with labor at the robotics factory in acquired in Germany, pushing back against the powerful IG Metall's effort to impose a labor contract on the new subsidiary. The founder has left after a reported clash with Mr. Musk. Investors will be looking for reassurance that troubles in Germany won't affect Tesla's effort to scale operations at its assembly plant in California as Mr. Musk aims to make a total of 500,000 vehicles next year from about 84,000 last year.
-CASH. In March, Tesla announced it was raising $1 billion in capital by offering common stock and debt aimed at shoring up its cash pile ahead of the expensive Model 3 rollout. The company has said it expects to spend as much as $2.5 billion ahead of introducing the sedan and it ended the fourth quarter with $3.39 billion in cash on hand. In addition to tooling up the factory, Mr. Musk also faces the cost this year of doubling the number of charges among his fast-charging network, a goal announced last month. The company hasn't said how much that will cost and analysts likely will be asking about spending plans.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Financial performance; Factories; Automobile sales
Location: California United States--US Germany
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: May 3, 201 7
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1894494756
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1894494756?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Musk Says Tesla on Track to Meet Model 3 Production Goal; The car company posted a wider loss despite more than doubling revenue
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: With just weeks left for Tesla Inc. to meet his tight production deadline for its first mass-market vehicle, Chief Executive Elon Musk sounded confident the goal will be met.
Mr. Musk said Wednesday in a quarterly letter to shareholders that Tesla is on track to begin production of the Model 3 sedan in July in what will be a critical test for the company to shift from a niche luxury brand to a mainstream auto maker.
Buyer enthusiasm for the $35,000 electric car is mounting, and investors are pouring into Tesla as Wall Street sours on traditional auto makers, fearing their swelling inventories are a prelude to a cyclical downturn after seven consecutive years of robust U.S. sales. Tuesday was just another reminder as General Motors Co. joined Ford Motor Co. and other car companies in reporting disappointing U.S. sales results for April, the fourth consecutive month of year-over-year of declines .
Tesla, which is coming off its best quarterly sales period, is helping fuel the belief that Silicon Valley can revive lagging interest in car buying, igniting imaginations about a future where vehicles drive themselves. At stake is a U.S. auto industry that generates some $2 trillion in annual revenue.
"Model 3 vehicle development is nearly complete as we approach the start of production," Mr. Musk wrote in the letter. "Preparations at our production facilities are on track to support the ramp of Model 3 production to 5,000 vehicles per week at some point in 2017, and to 10,000 vehicles per week at some point in 2018."
Shares of Tesla have risen this year by 50%, pushing its market value to greater heights than both GM and Ford, the two largest U.S. auto makers by sales. Tesla currently owns the market-value crown despite the fact the company sells a fraction of 10 million vehicles GM sold last year, is deeply in debt and has never turned an annual profit.
"We don't think earnings matters," Brian Johnson, an analyst with Barclays, advised clients in a note Wednesday ahead of Tesla reporting. "...The stock seems so disconnected from any form of fundamentals, and right now is purely driven by momentum--making earnings less relevant."
Tesla continued its unprofitable ways during the first three months of the year despite more than doubling revenue to $2.7 billion. The company said Wednesday its loss attributable to common shareholders widened to $330 million from $283 million a year earlier as it moves toward Model 3 production.
On an adjusted basis, the company's per-share loss of $1.33 missed the 81-cent-a-share loss predicted by a consensus estimate of analysts surveyed by Thomson Reuters.
Tesla's automotive business was helped by a 69% increase in the sale of Model S sedans and Model X sport-utility vehicles during the quarter compared with a year earlier. The company delivered about 25,000 vehicles in the January through March period, its best ever and a remarkable change of fortune from a year earlier when Mr. Musk was struggling to work out the kinks in the new Model X SUV, which had been plagued with production and quality issues.
The sales growth puts the company on pace to meet Mr. Musk's goal of selling 50,000 vehicles in the first half of the year. He aims to begin initial production of the Model 3, its first mass-market electric sedan, in July with the goal of ramping up production to 5,000 a week during the fourth quarter.
On a call with analysts, Mr. Musk suggested he aims for Tesla to build 100,000 Model X and S vehicles this year, though he gave some wiggle room in the shareholder letter. "Given that we will be ramping Model 3 production so quickly, as we've noted before, even a couple-week shift in timing can have a meaningful impact on total deliveries," Mr. Musk wrote.
Mr. Musk is betting the Model 3, a four-door sedan, will broaden the company's appeal and help increase production to 500,000 vehicles next year toward a goal of 1 million in 2020. Tesla made about 84,000 vehicles last year.
That 1 million goal is dependent on Tesla bringing out another vehicle, the Model Y, a compact SUV, in late 2019 or 2020, Mr. Musk told analysts.
Hedge-fund manager David Einhorn, a longtime shareholder of GM who has shorted Tesla's stock, on Wednesday expressed doubt that Tesla will be able to reach a mass market with its Model 3 at a level that would justify its market value. "For the time being, investors remain hypnotized by Tesla's CEO," said Mr. Einhorn, the founder of hedge fund Greenlight Capital Inc., on a conference call with his firm's investors.
To support plans to spend more than $2 billion ahead of the Model 3 rollout, Mr. Musk worked in the first quarter to shore up a continuing issue for Tesla--its cash balance. During the quarter, Tesla raised $1.22 billion by issuing new debt and stock.
Tesla spent $553 million during the period on expenses for the Model 3 and giant battery factory in Nevada, finishing the quarter with $4 billion in cash, which is the highest amount in its 13-year history.
Mr. Musk received a vote of confidence this year when Tencent Holdings Ltd., China's most valuable company, revealed it had taken a 5% stake in Tesla .
To prepare for more people driving Tesla cars, Mr. Musk said he plans to add almost 100 retail, delivery and service facilities, a 30% increase. Tesla will also add more mobile repair trucks during this quarter to address customers concerns in the field. Those efforts comes after announcing plans to at least double the number of fast chargers across its network for cars, following complaints about crowded stations.
Write to Tim Higgins at tim.higgins@wsj.com
Credit: By Tim Higgins
Subject: Automobile industry; Stockholders; Investments; Automobile sales; Electric vehicles
Location: United States--US
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: May 3, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1894620015
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1894620015?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Tesla Presses Ahead With Model 3
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 May 2017: B.3.
ProQuest document link
Abstract:
Tuesday was just another reminder, as General Motors Co. joined Ford Motor Co. and other car companies in reporting disappointing U.S. sales results for April, the fourth consecutive month of year-over-year declines.
Full text: With just weeks left for Tesla Inc. to meet his tight production deadline for its first mass-market vehicle, Chief Executive Elon Musk sounded confident the goal will be met.
Mr. Musk said Wednesday in a quarterly letter to shareholders that Tesla is on track to begin production of the Model 3 sedan in July in what will be a critical test for the company to shift from a niche luxury brand to a mainstream auto maker.
Buyer enthusiasm for the $35,000 electric car is mounting, and investors are pouring into Tesla as Wall Street sours on traditional auto makers, fearing their swelling inventories are a prelude to a cyclical downturn after seven consecutive years of robust U.S. sales. Tuesday was just another reminder, as General Motors Co. joined Ford Motor Co. and other car companies in reporting disappointing U.S. sales results for April, the fourth consecutive month of year-over-year declines.
Tesla, which is coming off its best quarterly sales period, is helping fuel the belief that Silicon Valley can revive lagging interest in car buying, igniting visions of a future where vehicles drive themselves. At stake is a U.S. auto industry that generates some $2 trillion in annual revenue.
"Model 3 vehicle development is nearly complete as we approach the start of production," Mr. Musk wrote in the letter. "Preparations at our production facilities are on track to support the ramp of Model 3 production to 5,000 vehicles per week at some point in 2017, and to 10,000 vehicles per week at some point in 2018."
Shares of Tesla have risen this year by 50%, pushing its market value to greater heights than both GM and Ford, the two largest U.S. auto makers by sales. Tesla currently owns the market-value crown despite the fact the company sells a fraction of the 10 million vehicles GM sold last year, is deeply in debt and has never turned an annual profit.
Shares fell 2.6% to $303 in after-hours trading Wednesday.
"We don't think earnings matters," Brian Johnson, an analyst with Barclays, advised clients in a note Wednesday ahead of Tesla reporting. "...The stock seems so disconnected from any form of fundamentals, and right now is purely driven by momentum -- making earnings less relevant."
Tesla continued its unprofitable ways during the first three months of the year despite more than doubling revenue to $2.7 billion. The company said Wednesday its loss attributable to common shareholders widened to $330 million from $283 million a year earlier as it moves toward Model 3 production.
On an adjusted basis, the company's per-share loss of $1.33 missed the 81-cent-a-share loss predicted by a consensus estimate of analysts surveyed by Thomson Reuters.
Tesla's automotive business was helped by a 69% increase in the sale of Model S sedans and Model X sport-utility vehicles during the quarter compared with a year earlier. The company delivered about 25,000 vehicles in the January-March period, its best ever and a remarkable change of fortune from a year earlier when Mr. Musk was struggling to work out the kinks in the new Model X SUV, which had been plagued with production and quality issues.
Credit: By Tim Higgins
Subject: Vehicles; Automobile industry
Location: United States--US
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: May 4, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1894803822
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1894803822?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Elon Musk's Desire for S-E-X Leads to Confusion With Model 3; Elon Musk, Tesla's CEO, countered a slight misunderstanding in the marketplace about the new car model and its name
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 May 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Elon Musk's desire for S-E-X is causing problems for Tesla Inc.
The chief executive of the Silicon Valley auto maker thought it would be funny for the names of his vehicle models to spell out something cool. He had the Model S sedan and Model X sport-utility vehicle. But when it came to naming a new, cheaper car, the Model E, Ford Motor Co. blocked Tesla over trademark issues. So he instead went with Model 3, which is essentially a backwards "E."
It's a story he has told often, as Tesla prepares to bring out the Model 3, which will be its least expensive car, starting at $35,000. But it seems the choice is backfiring, as many customers think the Model 3 is the next version of a high-end Tesla car, similar to the way the Apple iPhone 6 was replaced by the improved iPhone 7.
"We have seen a belief among some that Model 3 is the newest and more advanced generation of Model S," Mr. Musk wrote in a letter Wednesday to shareholders. "This is not correct. Model S will always have more range, more acceleration, more power, more passenger cargo room, more displays (two), and more customization choices, and Model S, X and 3 will all have equivalent Autopilot functionality."
During a conference call with analysts, Mr. Musk said the naming scheme was having some impact on orders of more expensive vehicles. The Model 3 is part of Mr. Musk's plans to broadly expand the luxury brand and help fuel production of 500,000 vehicles next year compared with about 84,000 last year. Auto makers traditionally want to have various models of cars with different, increasing price points in order to appeal to more customers. BMW AG, for example has a compact car called the 3 Series, a midsize car named 5 Series and the flagship 7 Series.
Shares of Tesla fell about 6% in midday trading Thursday in New York, a day after the company reported its first-quarter losses widened despite more than doubling revenue. The stock began sliding in after-hours trading during Wednesday's conference call while analysts repeatedly asked executives about the product confusion.
"New product freezing sales of existing product--it's a lesson we forget," Erik Gordon, a University of Michigan business-school professor, said. "In the pre-PC days of 8-bit computers, Adam Osborne destroyed his company when he announced that an Osborne 2 was on its way and sales of the Osborne 1, the first luggable computer, went to zero."
On Tuesday, Apple Inc. Chief Executive Tim Cook suggested anticipation for the upcoming iPhone 8 was affecting current iPhone 7 sales
. "We're seeing what we believe to be a pause in purchases on iPhone, which we believe are due to the earlier and much more frequent reports about future iPhones," Mr. Cook said.
The confusion about where the Model 3 sits in the Tesla lineup helps explain why Mr. Musk took to Twitter in late March with a similar message
: "Am noticing that many people think Model 3 is the 'next version' of a Tesla, like iPhone 2 vs 3. This is not true."
To add emphasis, he wrote, that the Model S "is the car I will keep driving even after Model 3 arrives."
Tesla followed those tweets up with a blog post on April 6 explaining the naming confusion, saying it often gets questions from its customers such as, "Should I trade in my Model S for a Model 3?"
On Wednesday, Mr. Musk suggested he's going to be talking a lot about this in an attempt to clear up the miscommunication. "I thought we're being all clever by calling it the Model 3, but actually the joke's on me because it caused confusion in the marketplace," he said.
But the joke can continue. Mr. Musk plans to name one of his next vehicles, the Model Y, making the lineup, S-3-X-Y. That vehicle, slated to be a compact SUV, must begin production in late 2019 or 2020 in order for him to meet his goal of making one million vehicles in 2020.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Vehicles
Location: New York
People: Osborne, Adam Musk, Elon
Company / organization: Name: Model E; NAICS: 441110; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Ford Motor Co; NAICS: 333924, 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: May 4, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1894840519
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1894840519?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-18
Database: The Wall Street Journal
Tesla's 'Anti-Selling' Has Investors Selling; Model 3 production is on schedule, but profits will continue to elude Elon Musk
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 May 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc.'s adoption of the soft sell ahead of its most important product yet has raised a few eyebrows.
In other ways, though, first quarter results out Wednesday evening had everything a stock bull could want. Tesla reiterated that the Model 3 sedan, Tesla's first car aimed at the mass market, is set to enter production in July. Though Tesla lost $1.33 a share on an adjusted basis, greater than analyst expectations, short-term profits have never concerned its investors. Tesla also ended the quarter with $4 billion in cash, a record balance. Though the stock traded lower Thursday morning, gains of more than 40% year to date cushion that blow.
Still, there are reasons to worry despite that happy backdrop. Take chief executive Elon Musk's unorthodox statement that the company is "anti-selling" the new Model 3 relative to its more expensive Model S sedan.
"As Model 3 becomes available, one of our challenges will be to eliminate any misperception about the differences between Model S and Model 3," he wrote in a letter to shareholders. "We have seen a belief among some that Model 3 is the newest and more advanced generation of Model S. This is not correct."
It is possible that this confusion is crimping demand for Tesla's existing, higher-margin product line. Customer deposits fell to $616 million, down nearly $50 million from the start of the year. Tesla has given delivery guidance for its existing automobile line only through June 30.
Tesla's free cash outflow, long a problem, was more than $600 million in the quarter, meaning the company spent about half the money it raised in March. Capital needs are due to accelerate. An extra $1.5 billion in capital spending is on tap before the Model 3 enters production.
More capital raises seem inevitable , especially since Mr. Musk said that the future Model Y crossover, which is expected by 2019, will likely be built on a different platform than the Model 3. That means significantly more capital spending than if Tesla chose to use the same platform.
Meanwhile, Wall Street analysts covering the company have been doing a little anti-selling of their own. Analysts now project, on average, an adjusted loss of 78 cents a share for 2018, the first full year in which the Model 3 is expected to be for sale. A year ago, that consensus called for a profit of $6.51 a share.
Longer-term profit estimates are headed lower as well. Consensus calls for $10.88 a share in 2020 profit; last year, that number was $17.51.
The stock is up nearly 30% over that period. Investors holding the shares should consider whether they are pushing their luck.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Corporate profits; Financial performance; Investments
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: May 4, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: News papers
Language of publication: English
Document type: News
ProQuest document ID: 1894967990
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1894967990?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Ford Spoils Tesla Chief's Name Joke
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 May 2017: B.4.
ProQuest document link
Abstract:
Elon Musk's desire for S-E-X is causing problems for Tesla Inc. The chief executive of the Silicon Valley auto maker thought it would be funny for the names of his vehicle models to spell out something cool.
Full text: Elon Musk's desire for S-E-X is causing problems for Tesla Inc.
The chief executive of the Silicon Valley auto maker thought it would be funny for the names of his vehicle models to spell out something cool. He had the Model S sedan and Model X sport-utility vehicle. But when it came to naming a new, cheaper car, the Model E, Ford Motor Co. blocked Tesla over trademark issues. So he insteadwent with Model 3, which is essentially a backward "E."
It is a story he has told often, as Tesla prepares to bring out the Model 3, which will be its least expensive car, starting at $35,000. But it seems the choice is backfiring, as many customers think the Model 3 is the next version of a high-end Tesla car, similar to the way the Apple iPhone 6 was replaced by the improved iPhone 7.
"We have seen a belief among some that Model 3 is the newest and more advanced generation of Model S," Mr. Musk wrote in a letter on Wednesday to shareholders. "This is not correct. Model S will always have more range, more acceleration, more power, more passenger cargo room, more displays (two), and more customization choices, and Model S, X and 3 will all have equivalent Autopilot functionality."
During a conference call with analysts, Mr. Musk said the naming convention was having some impact on orders of more expensive vehicles. The Model 3 is part of Mr. Musk's plans to broadly expand the luxury brand and help fuel production of 500,000 vehicles next year, compared with about 84,000 last year.
Auto makers traditionally want to have various models of cars with different, increasing price points to appeal to more customers. BMW AG, for example, has a compact car called the 3 Series, a midsize car named 5 Series and the flagship 7 Series.
Shares of Tesla fell 5% on Thursday, a day after the company reported its first-quarter loss widened despite more than doubling revenue. The stock began sliding in after-hours trading during Wednesday's conference call while analysts repeatedly asked executives about the product confusion.
"New product freezing sales of existing product; it's a lesson we forget," Erik Gordon, a University of Michigan business-school professor, said. "In the pre-PC days of eight-bit computers, Adam Osborne destroyed his company when he announced that an Osborne 2 was on its way and sales of the Osborne 1, the first luggable computer, went to zero."
On Tuesday, Apple Inc. Chief Executive Tim Cook suggested anticipation for the coming iPhone 8 was affecting current iPhone 7 sales. "We're seeing what we believe to be a pause in purchases on iPhone, which we believe are due to the earlier and much more frequent reports about future iPhones," Mr. Cook said.
The confusion about where the Model 3 sits in the Tesla lineup helps explain why Mr. Musk took to Twitter in late March with a similar message: "Am noticing that many people think Model 3 is the `next version' of a Tesla, like iPhone 2 vs 3. This is not true."To add emphasis, he wrote, that the Model S "is the car I will keep driving even after Model 3 arrives."
Credit: By Tim Higgins
Subject: Vehicles; Automobile sales; Names; Automobile industry
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2017
Publication date: May 5, 2017
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1895131461
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1895131461?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
How GM Might Unlock a Tesla-Like Valuation; Separating future-technology projects from core production business could appeal to investors
Author: Wilmot, Stephen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 May 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla being worth more than Ford or--as of this week--GM is the most visible implication of the valuation gap between old car tech and new car tech. But a bigger one for executive teams concerns portfolio management: It has become harder to own both in the same listed entity. As long as the gap remains, calls for GM to split will grow only louder.
An example was set this week by component supplier Delphi Automotive, which was itself spun out of GM in 1999. Delphi announced Wednesday that it was splitting its engine-parts business from its other divisions, which are focused on the kind of electronics necessary to turn cars into self-driving mobile devices. The shares jumped 11% as investors factored in a higher stand-alone valuation for the "RemainCo," which doesn't face the same questions around the transition to electric vehicles as the "SpinCo."
The potential for GM to do something similar is on Wall Street's radar. Chief Executive Mary Barra sounded more open to a spinoff last week, when GM announced first-quarter numbers, than she did three months earlier. "We continue to evaluate" the possibilities, she said. Her comments hinted that Cruise Automation, a San Francisco self-driving technology startup GM bought for $581 million last year, might provide a means to do so.
The problem GM faces is its rock-bottom valuation. Its shares trade at 5.5 times prospective earnings, or roughly $5,000 for every car it sold last year. Tesla's almost identical market value is equivalent to about $500,000 a car, based on the annualized first-quarter run-rate of deliveries.
Investors that buy GM stock are inclined to see investments in electric and autonomous vehicles as a cost, while those that buy Tesla stock focus on their potential. Spinning off a chunk of Cruise Automation, together with GM's electric-vehicle projects and perhaps its stake in ride hailing app Lyft, could attract tech-hungry shareholders that would never buy into GM, giving it a much cheaper source of equity capital to compete with Tesla. This capital could also incentivize flighty Silicon Valley staff.
There are risks. A spinoff would incur transaction fees and duplicate some costs, while bringing only minor commercial advantages. It could therefore erode economic value even as it engineered a higher valuation. If the car-tech bubble burst, it would end up looking like an expensive, faddy mistake.
Still, as long as the costs can be contained, it makes sense for GM to pursue the idea. Ms. Barra is under pressure to do something about the company's valuation, not least from activist David Einhorn, who is pushing the less convincing notion of creating two GM share classes . Tesla's valuation partly reflects the extreme scarcity of stocks offering pure-play exposure to the car industry's technological transition. Intel's purchase of self-driving tech leader Mobileye eliminated one of the few alternatives.
By providing a new outlet for investor demand, a GM spinoff might even come with the added bonus of knocking froth out of Tesla's stock.
Write to Stephen Wilmot at stephen.wilmot@wsj.com
Credit: By Stephen Wilmot
Subject: Automobiles; Investments; Automation; Valuation; Vehicles
Location: San Francisco California
People: Barra, Mary
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: May 5, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1895204887
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1895204887?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Hedge Funds Pitch 'Teletubbies,' Tesla at Sohn; Highlights from the Sohn Investment Conference
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 May 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Some of the biggest names of the hedge-fund world gathered Monday at the Sohn Investment Conference in New York to pitch their new investment ideas.
The closely watched annual gathering featured a range of bullish and bearish calls on everything from master-planned communities to the entire S&P 500.
Here were some of the highlights:
DHX Media Ltd.
Debra Fine, founder of hedge fund Fine Capital Partners, is bullish on "Teletubbies."
The long-only value manager is bullish on DHX Media, a Canadian firm that buys children's content that was popular a generation ago and banks on its value growing over the long term.
One of those shows is "Teletubbies," which centered around the adventures of four colorful, vaguely psychedelic creatures. "If Teletubbies is only half as successful as it was in 1999, its profits alone would more than double DHX's" earnings before interest, taxes, depreciation and amortization, she said.
"The value of children's content does not diminish" after the first run, Ms. Fine said, because, unlike their parents, kids don't mind watching the same show more than once. DHX also holds the rights to "Caillou," "Bob the Builder," "Inspector Gadget" and "Strawberry Shortcake."
Ms. Fine said DHX, which has a market capitalization of about $100 million, could rise as high as $20 to $30. Shares rose 6.9% to $4.20 on Nasdaq Monday.
Akane Otani
Core Laboratories NV
Greenlight Capital Inc. founder David Einhorn said he is shorting Core Laboratories NV, which provides analysis for petroleum-industry drilling.
The stock trades at a big premium to peers, he said, adding that there is a misunderstanding about Core being a secular growth company. Core's management continues to predict a V-shaped rebound in the oil market despite evidence to the contrary, Mr. Einhorn said in his presentation, which was littered with old New Yorker cartoons.
"Reading Core's annual reports is like opening up a time capsule," preserving the peak of oil market hype, he said. The stock, he said, is worth $62 a share. It closed down 2.4% at $110.75. Core declined to comment.
David Benoit
Tesla Inc.
Social Capital LP founder Chamath Palihapitiya thinks Elon Musk, founder of electric-car company Tesla Inc., is "our generation's Thomas Edison."
He pitched a bet on Tesla's convertible bonds. The securities, which can be converted into stock, rise in value along with shares but retain their downside protection if prices fall.
Mr. Palihapitiya said the company could be worth hundreds of billions of dollars within a decade, comparing it with Apple Inc., whose market cap passed the $800 billion mark Monday. But Tesla's heavy capital needs make the stock a tough bet right now, he said.
Tesla's convertible bonds have jumped around a bit lately, trading at 111.374 cents on the dollar Monday, up from 107.682 on May 4. They traded above 115 on May 1.
It wasn't Mr. Palihapitiya's first time pitching a tech company. At last year's Sohn conference, he said Amazon.com Inc. could one day become a $3 trillion company. The online retailer's shares are up about 40% since.
Ben Eisen
Subject: Laboratories; Convertible bonds; Annual reports; Stock prices; Children & youth; Social capital
Location: New York
People: Musk, Elon Edison, Thomas Alva (1847-1931)
Company / organization: Name: Core Laboratories NV; NAICS: 213112, 541380; Name: Apple Inc; NAICS: 334111, 334220, 511210; Name: DHX Media Ltd; NAICS: 512110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: May 8, 2017
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1896139702
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1896139702?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Banking & Finance: Funds Pitch 'Teletubbies,' Tesla
Author: Anonymous
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 May 2017: B.10.
ProQuest document link
Abstract:
"Reading Core's annual reports is like opening up a time capsule," preserving the peak of oil market hype, he said.
Full text: Corrections & Amplifications
Debra Fine is a hedge-fund manager. A Banking & Finance article on Tuesday about the Sohn Investment Conference in New York incorrectly identified Ms. Fine as a long-only value manager. Also, DHX Media Ltd.'s market capitalization was $569.7 million as of Monday's close, according to FactSet. The article incorrectly said the company's market value was about $100 million.
(WSJ May 10, 2017)
Some of the biggest names of the hedge-fund world gathered Monday at the Sohn Investment Conference in New York to pitch their new investment ideas.
The closely watched annual gathering featured a range of bullish and bearish calls on everything from master-planned communities to the entire S&P 500.
Here were some of the highlights:
DHX Media Ltd.
Debra Fine, founder of hedge fund Fine Capital Partners, is bullish on "Teletubbies."
The long-only value manager is bullish on DHX Media, a Canadian firm that buys children's content that was popular a generation ago and banks on its value growing over the long term.
One of those shows is "Teletubbies," which centered around the adventures of four colorful, vaguely psychedelic creatures. "If Teletubbies is only half as successful as it was in 1999, its profits alone would more than double DHX's" earnings before interest, taxes, depreciation and amortization, she said.
"The value of children's content does not diminish" after the first run, Ms. Fine said, because, unlike their parents, kids don't mind watching the same show more than once. DHX also holds the rights to "Caillou," "Bob the Builder," "Inspector Gadget" and "Strawberry Shortcake."
Ms. Fine said DHX, which has a market capitalization of about $100 million, could rise as high as $20 to $30. Shares rose 6.9% to $4.20 on Nasdaq Monday.
-- Akane Otani
Core Laboratories NV
Greenlight Capital Inc. founder David Einhorn said he is shorting Core Laboratories NV, which provides analysis for petroleum-industry drilling.
The stock trades at a big premium to peers, he said, adding that there is a misunderstanding about Core being a secular growth company. Core's management continues to predict a V-shaped rebound in the oil market despite evidence to the contrary, Mr. Einhorn said in his presentation, which was littered with old New Yorker cartoons.
"Reading Core's annual reports is like opening up a time capsule," preserving the peak of oil market hype, he said. The stock, he said, is worth $62 a share. It closed down 2.4% at $110.75. Core declined to comment.
-- David Benoit
Tesla Inc.
Social Capital LP founder Chamath Palihapitiya thinks Elon Musk, founder of electric-car company Tesla Inc., is "our generation's Thomas Edison."
He pitched a bet on Tesla's convertible bonds. The securities, which can be converted into stock, rise in value along with shares but retain downside protection if prices fall.
Mr. Palihapitiya said the company could be worth hundreds of billions of dollars within a decade, comparing it with Apple Inc., whose market cap passed the $800 billion mark Monday. But Tesla's heavy capital needs make the stock a tough bet right now, he said.
Tesla's convertible bonds have jumped around a bit lately, trading at 111.374 cents on the dollar Monday, up from 107.682 on May 4. They traded above 115 on May 1.
It wasn't Mr. Palihapitiya's first time pitching a tech company. At last year's Sohn conference, he said Amazon.com Inc. could one day become a $3 trillion company. The online retailer's shares are up about 40% since.
-- Ben Eisen
---
Chamath Palihapitiya, Social Capital LP
Direction: Bullish
Position: Car maker Tesla Inc.'s convertible bonds
Quote: "A chance to stand shoulder to shoulder with the guy we think is our generation's Thomas Edison."
Debra Fine, Fine Capital Partners LP
Direction: Bullish
Position: Children's media company DHX Media Ltd.'s stock
Quote: "A Polly Pocket comforter is a much bigger seller than 'House of Cards' sheets."
David Einhorn, Greenlight Capital Inc.
Direction: Bearish
Position: Petroleum drilling analysis provider Core Laboratories NV's stock
Quote: "Core's earnings will disappoint over the next few years."
Subject: Investment advisors; Hedge funds
Company / organization: Name: DHX Media Ltd; NAICS: 512110; Name: Core Laboratories NV; NAICS: 541380, 213112; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.10
Publication year: 2017
Publication date: May 9, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: Feature
ProQuest document ID: 1896216698
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1896216698?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Hedge Funds Pitch 'Teletubbies,' Tesla at Sohn; Highlights from the Sohn Investment Conference
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 May 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Corrections & Amplifications
Debra Fine is a hedge-fund manager. An earlier version of this story incorrectly identified Ms. Fine as a long-only value manager. Also, DHX's market capitalization was $569.7 million as of Monday's close, according to FactSet. An earlier version of the story incorrectly said the company's market value was about $100 million. (May 9, 2017)
Some of the biggest names of the hedge-fund world gathered Monday at the Sohn Investment Conference in New York to pitch their new investment ideas.
The closely watched annual gathering featured a range of bullish and bearish calls on everything from master-planned communities to the entire S&P 500.
Here were some of the highlights:
DHX Media Ltd.
Debra Fine, founder of hedge fund Fine Capital Partners, is bullish on "Teletubbies."
Ms. Fine is bullish on DHX Media, a Canadian firm that buys children's content that was popular a generation ago and banks on its value growing over the long term.
One of those shows is "Teletubbies," which centered around the adventures of four colorful, vaguely psychedelic creatures. "If Teletubbies is only half as successful as it was in 1999, its profits alone would more than double DHX's" earnings before interest, taxes, depreciation and amortization, she said.
"The value of children's content does not diminish" after the first run, Ms. Fine said, because, unlike their parents, kids don't mind watching the same show more than once. DHX also holds the rights to "Caillou," "Bob the Builder," "Inspector Gadget" and "Strawberry Shortcake."
Ms. Fine said DHX, which had a market capitalization of about $569.7 million as of Monday's close, according to FactSet, could rise as high as $20 to $30. Shares rose 6.9% to $4.20 on Nasdaq Monday.
--Akane Otani
Core Laboratories NV
Greenlight Capital Inc. founder David Einhorn said he is shorting Core Laboratories NV, which provides analysis for petroleum-industry drilling.
The stock trades at a big premium to peers, he said, adding that there is a misunderstanding about Core being a secular growth company. Core's management continues to predict a V-shaped rebound in the oil market despite evidence to the contrary, Mr. Einhorn said in his presentation, which was littered with old New Yorker cartoons.
"Reading Core's annual reports is like opening up a time capsule," preserving the peak of oil market hype, he said. The stock, he said, is worth $62 a share. It closed down 2.4% at $110.75. Core declined to comment.
David Benoit
Tesla Inc.
Social Capital LP founder Chamath Palihapitiya thinks Elon Musk, founder of electric-car company Tesla Inc., is "our generation's Thomas Edison."
He pitched a bet on Tesla's convertible bonds. The securities, which can be converted into stock, rise in value along with shares but retain their downside protection if prices fall.
Mr. Palihapitiya said the company could be worth hundreds of billions of dollars within a decade, comparing it with Apple Inc., whose market cap passed the $800 billion mark Monday. But Tesla's heavy capital needs make the stock a tough bet right now, he said.
Tesla's convertible bonds have jumped around a bit lately, trading at 111.374 cents on the dollar Monday, up from 107.682 on May 4. They traded above 115 on May 1.
It wasn't Mr. Palihapitiya's first time pitching a tech company. At last year's Sohn conference, he said Amazon.com Inc. could one day become a $3 trillion company. The online retailer's shares are up about 40% since.
Ben Eisen
Subject: Laboratories; Annual reports; Stock prices; Investment advisors
Location: New York
People: Musk, Elon
Company / organization: Name: Core Laboratories NV; NAICS: 213112, 541380
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: May 10, 2017
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1896505919
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1896505919?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-2 4
Database: The Wall Street Journal
Elon Musk Quits Work With White House After Trump Exits Climate Accord; Tesla chief says U.S. leaving Paris agreement is 'not good for America or the world'
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 June 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Elon Musk has had enough of working with President Donald Trump.
The chief executive of electric-car maker Tesla Inc. and rocket company Space Exploration Technologies Corp. said on Thursday he would step down from his roles working with White House advisory groups, shortly after the president announced the U.S. would withdraw from the Paris climate accord.
"Climate change is real," Mr. Musk tweeted shortly after Mr. Trump's speech at the White House. "Leaving Paris is not good for America or the world."
As soon as Mr. Trump took office in January, Mr. Musk found himself under increasing criticism for being among the U.S. business leaders trying to advise the administration. He was named to groups looking at manufacturing, government innovation and economics and was increasingly showing up in White House photos.
He wasn't alone in facing criticism for his role. Uber Technologies Inc. Chief Executive Travis Kalanick stepped down from Trump's Strategic and Policy Forum in February after calls by users to delete the ride-hailing service's app. The criticism was over the belief that he supported the Trump administration, and its order that aimed to ban citizens from seven Muslim-majority nations from entering the U.S. because of terrorism concerns.
Mr. Musk, who oversees businesses that operate in heavily regulated industries including clean energy, tried to perform a balancing act in public, arguing that engaging with the president on important issues could be more productive than attacking him. He surprised many followers by supporting Rex Tillerson, the former head of Exxon Mobil Corp., to become secretary of state.
Mr. Musk is a close associate of Peter Thiel, the tech investor and entrepreneur who backed Mr. Trump during the campaign and has helped advise the president. Mr. Thiel and Mr. Musk were both founders of payments company PayPal Inc., and Mr. Thiel's venture-capital firm Founders Fund backs SpaceX.
Mr. Musk seemed to acknowledge on Twitter in January a realization that some of his fans were unhappy with him, when one person on Twitter told him he was losing credibility. "Yeah, am hearing from a lot of people & it's getting me down," he tweeted . "I'm just trying to make a positive contribution & hope good comes of it."
In February, he said he had raised climate issues at one council meeting and would stay on. "I believe this is doing good, so will remain on council & keep at it," he tweeted . "Doing otherwise would be wrong."
But the expected withdrawal from the Paris accord was too much for Mr. Musk. The Paris accord by dozens of countries aims to reduce greenhouse-gas emissions as part of an effort to fight climate change. The U.S. had pledged to cut emissions by 2025 between 26% and 28% from their 2005 levels. Each participating country determines its own targets.
On Wednesday, Mr. Musk, Apple Inc. CEO Tim Cook and other business leaders placed urgent phone calls to the White House in an effort to persuade the president to reconsider, The Wall Street Journal reported .
Mr. Trump, who made pulling out of the accord a campaign promise, on Thursday called the climate deal "draconian" and said that he would begin negotiations to either re-enter the agreement or craft a new deal.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Climate change
Location: United States--US
People: Trump, Donald J Musk, Elon
Company / organization: Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Tesla Inc; NAICS: 336999; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jun 1, 2017
Section: Politics
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1904531849
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1904531849?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Elon Musk Quits Work With White House After Trump Exits Climate Accord; Tesla chief says leaving Paris agreement is 'not good for America or the world'; Disney CEO resigns from council
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 June 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Elon Musk has had enough of working with President Donald Trump.
The chief executive of electric-car maker Tesla Inc. and rocket company Space Exploration Technologies Corp. said on Thursday he would step down from his roles working with White House advisory groups, shortly after the president said the U.S. would withdraw
from the Paris climate accord.
"Climate change is real," Mr. Musk tweeted shortly after Mr. Trump's speech at the White House. "Leaving Paris is not good for America or the world."
Robert Iger, chief executive of Walt Disney Co., also said Thursday that he would resign from the president's business advisory council, as "a matter of principle."
When Mr. Trump took office in January, Mr. Musk and Mr. Iger were criticized for being among the U.S. business leaders trying to advise the administration. Mr. Musk was named to groups looking at
manufacturing, government innovation and economics, while Mr. Iger, a Democrat, served on the council.
Mr. Iger responded to his critics at Disney's annual meeting of shareholders in March. He said he decided to remain on the council "to have the opportunity to present specific points of view directly to the president" and said his membership didn't indicate his or his company's support for any specific policies.
"I think actually it's a privileged opportunity to have a voice in the room," he said.
Mr. Iger and Mr. Musk weren't alone in facing criticism for their roles. Uber Technologies Inc. Chief Executive Travis Kalanick stepped down
from Trump's Strategic and Policy Forum in February after calls by users to delete the ride-hailing service's app. The criticism was over the belief that he supported the Trump administration and its order that aimed to ban citizens from seven Muslim-majority nations from entering the U.S. because of terrorism concerns.
Mr. Musk, who oversees businesses that operate in heavily regulated industries including clean energy, tried to perform a balancing act in public, arguing that engaging with the president on important issues could be more productive than attacking him. He surprised many followers by supporting Rex Tillerson, the former head of Exxon Mobil Corp., to become secretary of state.
Mr. Musk is a close associate of Peter Thiel, the tech investor and entrepreneur who backed Mr. Trump during the campaign and has helped advise the president. Mr. Thiel and Mr. Musk were founders of payments company PayPal Inc., and Mr. Thiel's venture-capital firm Founders Fund backs SpaceX.
Mr. Musk seemed to acknowledge on Twitter in January a realization that some of his fans were unhappy with him, when one person on Twitter told him he was losing credibility. "Yeah, am hearing from a lot of people & it's getting me down," he tweeted
. "I'm just trying to make a positive contribution & hope good comes of it."
In February, he said he had raised climate issues at one council meeting and would stay on. "I believe this is doing good, so will remain on council & keep at it," he tweeted
. "Doing otherwise would be wrong."
But the expected withdrawal from the Paris accord was too much for Mr. Musk. The Paris accord by dozens of countries aims to reduce greenhouse-gas emissions as part of an effort to fight climate change. The U.S. had pledged to cut emissions by 2025 between 26% and 28% from their 2005 levels. Each participating country determines its own targets.
On Wednesday, Mr. Musk, Apple Inc. CEO Tim Cook and other business leaders placed urgent phone calls to the White House in an effort to persuade the president to reconsider, The Wall Street Journal reported
.
Mr. Trump, who made pulling out of the accord a campaign promise, on Thursday called the climate deal "draconian" and said he would begin negotiations to either re-enter the agreement or craft a new deal.
Ben Fritz contributed to this article.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Chief executive officers; Regulated industries; Councils; Emissions; Social networks; Political campaigns; Presidents; Shareholder meetings; Climate change
Location: United States--US
People: Trump, Donald J Kalanick, Travis Tillerson, Rex W Musk, Elon
Company / organization: Name: Uber Technologies Inc; NAICS: 511210, 518210; Name: PayPal Inc; NAICS: 522320; Name: Exxon Mobil Corp; NAICS: 211111, 447110; Name: Walt Disney Co; NAICS: 512110, 515120, 711211, 713110; Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Tesla Inc; NAICS: 336999; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jun 2, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: Unit ed States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1904646533
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1904646533?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-18
Database: The Wall Street Journal
Toyota-Tesla Tie-Up Terminated; Japanese auto maker sold stake in Tesla last year, but won't say when or how much it made
Author: McLain, Sean
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 June 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: TOKYO--Toyota Motor Corp. sold its stake in Tesla Motors Inc. some time last year, the company said, formally ending a partnership between the car makers.
A spokesman for the Japanese car maker on Saturday declined to say when the transaction occurred or how much Toyota made from the sale. But Tesla shares have been on a tear, rising more than 50% in the past year.
Toyota owned 2.3 million shares in Tesla in March last year, and its stake was valued at ¥53.1 billion ($480 million) at the time, according to the most recent disclosure from the company.
The two companies teamed up in 2010 to work on electric vehicles. Toyota took a $50 million stake in the maker of electric cars and SUVs. In return, Tesla produced components for the battery-powered version of the RAV4 crossover sport-utility vehicle.
Toyota sold a portion of its Tesla holdings in 2014, after announcing it would stop using Tesla as a supplier for the electric RAV4, which is no longer sold.
The sale of the rest of its stake marks the formal end of the relationship between one of the world's largest car makers and the Silicon Valley upstart.
It comes as Toyota President Akio Toyoda leads an effort to build a homegrown electric vehicle .
Tesla, meanwhile, is gearing up to start production of its mass market Model 3 sedan this year.
Write to Sean McLain at sean.mclain@wsj.com
Related
* Toyota Chief to Oversee New Electric-Car Project (Nov. 30, 2016)
* Toyota Sees the Battery-Power Light (Nov. 17, 2016)
* Toyota Confirms Sale of Part of Tesla Stake (Oct. 24, 2014)
* Toyota Plans Electric SUV With Tesla (July 17, 2010)
Credit: By Sean McLain
Subject: Automobile industry; Electric vehicles
People: Toyoda, Akio
Company / organization: Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jun 3, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1905136631
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1905136631?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Toyota Hit Brakes on Tesla Partnership
Author: McLain, Sean
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 June 2017: B.3.
ProQuest document link
Abstract:
Toyota Motor Corp. sold its stake in Tesla Motors Inc. some time last year, the company said, formally ending a partnership between the car makers.
Full text: Toyota Motor Corp. sold its stake in Tesla Motors Inc. some time last year, the company said, formally ending a partnership between the car makers.
A spokesman for the Japanese car maker declined to say when the transaction occurred or how much Toyota made from the sale. But Tesla shares have been on a tear, rising more than 50% in the past year.
Toyota owned 2.3 million Tesla shares in March last year, and its stake was valued at 53.1 billion yen ($480 million) at the time, according to the most recent company disclosure.
The companies teamed up in 2010 to work on electric vehicles. Toyota took a $50 million stake in the maker of electric cars and SUVs. In return, Tesla produced components for the battery-powered version of the RAV4 SUV.
Toyota sold a portion of its Tesla holdings in 2014, after announcing it would stop using Tesla as a supplier for the electric RAV4, which is no longer sold.
Credit: By Sean McLain
Subject: Automobile industry; Electric vehicles; Divestiture; Equity stake
Company / organization: Name: Tesla Motors Inc; NAICS: 336999; Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Jun 5, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1905631644
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1905631644?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla CEO Elon Musk Signals New Factory for Model Y SUV; Auto maker on track to begin production of Model 3 next month, CEO says
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 June 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. hasn't yet rolled out its new Model 3 sedan, but Chief Executive Elon Musk is already talking about plans to build a new factory for the electric-car maker's next sport-utility vehicle, the Model Y.
"There's just no room at Fremont," Mr. Musk told shareholders at Tesla's annual meeting Tuesday in Mountain View, Calif., regarding the Silicon Valley auto maker's nearby assembly plant. "We're bursting at the seams."
Mr. Musk said Tesla is on track to begin production of the Model 3 next month and then will begin taking order configurations. Mr. Musk is counting on the new $35,000 sedan to help boost production next year to 500,000 from about 84,000 last year. The price is much lower than the top-of-the-line Model S sedans and Model X SUVs, which cost more than $100,000.
Mr. Musk was typically rosy with his projections, expecting the Model Y to be on the road in 2019. "Probably demand for Model Y will exceed the demand for Model 3," Mr. Musk said.
Mr. Musk acknowledged there has been criticism over his plans to build the Model Y on a different vehicle platform than the Model 3, but he said that there are "major manufacturing improvements" that can be accomplished and that the capital expenditure can decrease "by a factor of two" between the two vehicles.
"We actually made a mistake in trying to derive the Model X from the Model S platform," he said. "It would've been better to just design an SUV the way an SUV should be designed. Design a sedan, the way a sedan should be designed. Otherwise, you're just trying to shoehorn something that doesn't make sense."
Asked how many factories are in the works, Mr. Musk said he is giving "serious consideration" to three factories and ultimately at least 10 globally and maybe as many as 20.
At the meeting, shareholders gave Mr. Musk a vote of confidence by rejecting a proposal to require an annual election of board members.
The Connecticut Retirement Plans and Trust Fund had proposed to change the Silicon Valley company's corporate governance as part of a bid, it said, to address concerns about the board's independence. It noted in a letter to shareholders that Mr. Musk's brother, Kimbal, has served on Tesla's board since 2004 and that three other members have business relationships with the CEO.
Board members serve staggered three-year terms. Mr. Musk had mocked calls for changes to Tesla's board on Twitter in April, saying investors making that claim "should buy Ford stock. Their governance is amazing..."
Mr. Musk told shareholders Tuesday that Tesla is interviewing independent director candidates and could add two or three people to the board. He said Tesla could make an announcement in the next month or two.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Design; Manufacturing; Stockholders; Factories; Corporate governance
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jun 7, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1906270676
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1906270676?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-17
Database: The Wall Street Journal
The Rising Stakes for Tesla in China; Given China's increasing importance to Tesla, Elon Musk's silence about a China strategy is a glaring omission
Author: Trivedi, Anjani
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 June 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: China has become a big part of Tesla, even if Elon Musk hasn't said much about it.
The electric-car maker is in many ways out of sync with its peers in the world's largest electric-car market. Unlike GM, Volkswagen and Ford, it doesn't have a local joint venture partner or a local dealer network to plug into. Its battery chargers don't comport with China's national standard. It doesn't produce locally, so its sticker prices are burdened with a 25% import tax in addition to the cost of shipping cars over.
Yet it has found some success. Revenue tripled last year and represents almost a fifth of the company's total. It attracted a big Chinese investor in Tencent, which took a 5% stake in March, giving it local credibility and contacts. Shortly thereafter, Chinese state media tweeted a picture of Mr. Musk and Chinese Vice Premier Wang Yang in Beijing. Talk started swirling of a Tesla factory in China, which would end the import tax and possibly qualify Tesla for generous subsidies on which Chinese rivals such as BYD thrive. It boasts an ever-expanding list of its so-called supercharger stations in China.
The question is, will whatever strategy Tesla is using to win those sales continue to work as it introduces its mass-market Model 3? Tesla hasn't said when next year it will launch the Model 3 in China and doesn't disclose sales margins there. Mr. Musk has said almost nothing in presentations or earnings calls about the China strategy, a glaring omission given China's increasing importance.
Tesla may already be hitting a rough patch there. Based on customs data, research firm JL Warren Capital figures first-quarter shipments were down 15%, a trend that continued in April. Meanwhile, inventory built up. The number of vehicles sitting at dealerships in March and April was close to the highest ever for Tesla in China--almost 5,000, a substantial count for a company that imported fewer than 12,000 vehicles last year.
Tesla has been leaning on marketing tactics that will likely be short-lived. It has raised prices twice over the past year, both times announcing the increase was imminent--which may pull demand forward, but is no way to generate new demand. It has offered discounted insurance--50% off for cars bought at a Tesla store--as well as perks like free charging across the country for a limited time.
Scalability is an issue. Tesla's success in big cities has been underpinned by another tactic: arranging coveted license plates for buyers. Plate issuance is restricted to reduce pollution and congestion, so including them with the purchase has given Tesla an edge, though not an unassailable one.
Mr. Musk has hinted at times the company could reveal plans about China production. Given Tesla's ambitions--and its lofty stock price--such a plan could carry serious importance.
Write to Anjani Trivedi at anjani.trivedi@wsj.com
Get financial insights and commentary on global investing from The Wall Street Journal's Heard on the Street team. Subscribe to the podcast.
Credit: By Anjani Trivedi
Subject: Automobile industry
Location: China Beijing China
People: Wang Yang
Company / organization: Name: Volkswagen AG; NAICS: 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jun 7, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1906330828
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1906330828?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission o f copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Elon Musk: The Man, the Myth, the Risk; Tesla's boss is a big part of the auto maker's soaring value, but his jokes are no laughing matter.
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 June 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc is one of the hottest stocks on the planet, thanks to investor belief in Elon Musk. Paradoxically, that might be the biggest risk
investors face.
Take the events at Tuesday's annual meeting, for instance. In response to a question about what the company CEO and chairman does in his time away from work, Mr. Musk said, in part, "Sometimes go crazy on Twitter. You know, sort of, red wine, vintage record player, some Ambien, magic! Magic happens." The assembled crowd burst into laughter.
Investors certainly are laughing all the way to the bank at the moment. Tesla's shares are up by about two-thirds just this year, propelling it to a significantly larger market value than more-established and profitable General Motors or Ford. The Model 3 mass market sedan is due to enter production next month, and the stock's many short sellers are under significant pressure. Shares once again ripped higher Wednesday morning.
This is a good time for investors to understand that belief in Mr. Musk's vision, not traditional financial measures, is far and away the main reason to own the stock.
Tesla loses money consistently and analysts covering the stock have lately been slashing profit projections. For example, analyst consensus called for $6.26 a share in 2018 in adjusted profits a year ago, according to FactSet. Now, analyst consensus calls for an 89 cent loss. A similar pattern can be observed out to 2020, but investors clearly don't mind.
Therein lies the danger. The stock depends on Mr. Musk working his magic. And while the audience treated those comments like a joke, Ambien, a powerful treatment for insomnia, isn't something to chuckle about. "Do not use with alcohol" warns the Food and Drug Administration. The FDA further warns
that "sleep-driving" is "more likely to occur when Ambien is taken with alcohol."
The stock now trades at 79 times the 2019 earnings estimate. At that price, Mr. Musk's utterances should be keeping shareholders up at night.
Write to Charley Grant at charles.grant@wsj.com
Related Items
* The Rising Stakes for Tesla in China
* Tesla's 'Anti-Selling' Has Investors Selling
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Credit: By Charley Grant
Subject: Market strategy; Alcohol; Investments
Location: China
People: Musk, Elon
Company / organization: Name: General Motors Corp; NAICS: 333415, 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jun 7, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1906574109
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1906574109?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-18
Database: The Wall Street Journal
Tesla Replaces Chief of Self-Driving Software; Elon Musk's Silicon Valley auto maker loses another senior leader of its autonomous-vehicle efforts
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 June 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. has parted ways with another senior leader on its self-driving technology team , adding more turmoil to a program that is under pressure to meet the grand ambitions of Chief Executive Elon Musk.
The Silicon Valley electric-car maker on Tuesday said Chris Lattner, the vice president of Autopilot software, has left the company about six months after Tesla hired him away from Apple Inc.
"Chris just wasn't the right fit for Tesla, and we've decided to make a change," Tesla said Tuesday.
Mr. Lattner followed Tesla's statement with a posting on Twitter: "Turns out that Tesla isn't a good fit for me after all. I'm interested to hear about interesting roles for a seasoned engineering leader!"
Mr. Lattner didn't respond to a request for comment.
The program, under pressure from Mr. Musk to demonstrate a Tesla vehicle can drive itself by year's end, has grappled with an exodus of talent and questions about the safety of the technology. Tesla's Autopilot system, which can assist drivers with steering, breaking and changing lanes, sparked a safety debate after a Tesla driver in Florida died in a crash a year ago while using the semiautonomous system.
U.S. regulators closed their investigation of the crash in January by concluding Autopilot didn't contain a safety defect.
Mr. Lattner's hiring in January coincided with the departure of Autopilot director Sterling Anderson, a leader in developing the system. Tesla sued Mr. Anderson over his efforts to create a competing startup ; the lawsuit was settled in April.
In March, David Nistér left his job as the vice president of Autopilot vision for chip maker Nvidia Corp.
On Tuesday, Tesla said it had elevated Jim Keller, vice president of Autopilot hardware, to also oversee Autopilot software. Mr. Keller joined Tesla in 2016 from chip maker Advanced Micro Devices Inc.
The company also said Andrej Karpathy, an expert in computer vision who worked recently as a research scientist at OpenAI--a nonprofit co-founded by Mr. Musk--would become director of AI and Autopilot vision.
The team has an ambitious agenda. Even as Mr. Musk last year dealt with safety regulators examining Autopilot, he was pushing ahead with promises to make the system more robust.
In October, he announced that vehicles coming off the assembly line were being equipped with the hardware need to make them fully self-driving once the software was ready--and promised to demonstrate that ability by driving from Los Angeles to New York by the end of 2017.
Amid the Autopilot drama, Tesla is on the eve of beginning production of the Model 3, its foray into less-expensive vehicles. The $35,000 car is supposed to help boost the company's production to 500,000 next year from about 84,000 last year.
The hard-charging Mr. Musk has seen several executives leave in recent years, including the chief financial officer.
None of the hurdles, however, seem to have damped enthusiasm for his vision among investors, who have sent the company's stock to record highs, pushing Tesla past General Motors Co. as the largest U.S. auto maker by market capitalization --despite its having just a fraction of GM's sales and no history of annual profit.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related Coverage
* The End of Car Ownership (June 20)
* Keywords: How Self-Driving Cars Could End Uber (May 7)
* Elon Musk Touts Latest Dream: Underground Roadways (April 28)
* Tesla Settles Lawsuit Against Former Autopilot Director (April 19)
* Tesla Rivals GM as the Most Valuable Auto Maker in U.S. (April 10)
Credit: By Tim Higgins
Subject: Software; Automobile industry
Location: Florida Los Angeles California United States--US New York
People: Musk, Elon Anderson, Sterling
Company / organization: Name: OpenAI; NAICS: 541712
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jun 21, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1911379639
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1911379639?accountid=7117
Copyright: (c) 2017 Dow Jon es & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Departure At Tesla Adds to Turmoil
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]22 June 2017: B.5.
ProQuest document link
Abstract:
The Silicon Valley electric-car maker on Tuesday said Chris Lattner, the vice president of Autopilot software, has left the company about six months after Tesla hired him away from Apple Inc. "Chris just wasn't the right fit for Tesla, and we've decided to make a change," Tesla said Tuesday. Mr....
Full text: The latest exit of a senior leader from Tesla Inc.'s self-driving technology team adds more turmoil to a program already under pressure to meet the grand ambitions of Chief Executive Elon Musk.
The Silicon Valley electric-car maker on Tuesday said Chris Lattner, the vice president of Autopilot software, has left the company about six months after Tesla hired him away from Apple Inc.
"Chris just wasn't the right fit for Tesla, and we've decided to make a change," Tesla said Tuesday.
Mr. Lattner followed Tesla's statement with a posting on Twitter: "Turns out that Tesla isn't a good fit for me after all. I'm interested to hear about interesting roles for a seasoned engineering leader!"
Mr. Lattner didn't respond to a request for comment.
The program, under pressure from Mr. Musk to demonstrate a Tesla vehicle can drive itself by year-end, has grappled with an exodus of talent and questions about the safety of the technology.
Tesla's Autopilot system, which can assist drivers with steering, braking and changing lanes, sparked a safety debate after a Tesla driver in Florida died in a crash a year ago while using the semiautonomous system. U.S. regulators closed their investigation of the crash in January by concluding Autopilot didn't contain a safety defect.
Mr. Lattner's hiring in January coincided with the departure of Autopilot director Sterling Anderson, a leader in developing the system. Tesla sued Mr. Anderson over his efforts to create a competing startup; the lawsuit was settled in April. In March, David Nister left his job as the vice president of Autopilot vision for chip maker Nvidia Corp.
On Tuesday, Tesla said it had elevated Jim Keller, vice president of Autopilot hardware, to also oversee Autopilot software. Mr. Keller joined Tesla in 2016 from chip maker Advanced Micro Devices Inc.
The company also said Andrej Karpathy who worked recently as a research scientist at OpenAI -- a nonprofit co-founded by Mr. Musk -- would become director of AI and Autopilot vision.
Tesla is on the eve of beginning production of the Model 3, its foray into less-expensive vehicles. The $35,000 car is supposed to help boost the company's production to 500,000 next year from about 84,000 last year.
Credit: By Tim Higgins
Subject: Automobile industry; Electronics industry; Litigation
Location: Florida United States--US
People: Anderson, Sterling
Company / organization: Name: Advanced Micro Devices Inc; NAICS: 334413; Name: OpenAI; NAICS: 541712; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2017
Publication date: Jun 22, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1912076581
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1912076581?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Explores Possibility of Manufacturing Cars in China; Auto maker plans to clearly define its production plans for China by year's end
Author: Higgins, Tim; Moss, Trefor
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 June 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. said it is exploring with government officials in Shanghai the possibility of opening a facility to build electric vehicles for the Chinese market.
The Silicon Valley auto maker reiterated Thursday it plans to define its production plans for China by year's end. China, the world's largest market for new-car sales and a big consumer of luxury vehicles, is an important market for Tesla, especially as the government pushes for more electric vehicles .
"Tesla is deeply committed to the Chinese market, and we continue to evaluate potential manufacturing sites around the globe to serve the local markets," Tesla said in a written statement. "While we expect most of our production to remain in the U.S., we do need to establish local factories to ensure affordability for the markets they serve."
Tesla didn't mention a local joint-venture partner. China requires foreign auto makers to operate factories with local partners, though officials have signaled a willingness to relax such requirements. In May, Tesla Chief Executive Elon Musk, who had recently visited China, cryptically suggested such rule changes would be "good timing."
By making cars in China, Tesla could cut the prices of its vehicles by one-third by reducing shipping costs and avoiding import duties, Mr. Musk has said.
In afternoon trading in New York on Thursday, Tesla's shares were up 2.2% at $384.57. The stock is up roughly 80% this year.
China charges a 25% duty on all imported cars, but the hefty markup hasn't deterred affluent buyers who regard a Tesla vehicle as a prestige item.
One Chinese Tesla owner, Chen Zhanchong, said he paid $176,000 for a Tesla Model S P90D in late 2015, well over the sales price in the U.S. But the 31-year-old Guangzhou resident, who recently left his job at an internet company, said it was still a good value for a high-performance electric car.
"If a cheap Model 3 is produced in China in large quantities, local companies won't be able to compete," Mr. Chen said. "Tesla will enjoy explosive growth."
Tesla reported over $1 billion in revenue in China in 2016, a figure that analysts say equates to about 11,000 vehicle sales. The company sold just over 76,000 cars globally last year.
And sales in China have accelerated in 2017: Tesla sold about 5,500 cars in China in the first four months of the year, according to EV Sales, a website that tracks the electric-vehicle market.
Yet while local manufacturing gives Tesla the opportunity to sell cars in far greater numbers, China's fast-changing regulatory environment is creating uncertainty among foreign auto makers unsure about what Beijing's requirements will be.
Current regulations also require manufacturers building electric cars in China to source all vehicle components locally. That presents a challenge for Tesla, which won't be able to use batteries made in its U.S. "gigafactory" in its Chinese-built cars, said Bill Russo, managing director of Gao Feng Advisory, a Shanghai-based auto consulting firm. Tesla might be forced to form a joint venture with a local battery maker, as well as a car maker, he said.
Even so, Tesla has no choice but to manufacture vehicles in China, despite the regulatory uncertainties, in order to achieve scale and tap what is already the world's biggest market for electric cars, Mr. Russo said.
"On a positive note, China is willing to allow the premier EV brand to plant its flag on Chinese soil," he said, referring to Tesla. "Tesla needs China. And China needs Tesla--it wants to show they're not a closed ecosystem."
Recent events signaled that Tesla is moving closer to committing to opening a factory in China, analysts said. Chinese internet company Tencent Holdings Ltd. acquired a 5% stake in Tesla for $1.78 billion in March, and Mr. Musk met with senior government officials in Beijing the following month.
Junya Qian contributed to this article.
Write to Tim Higgins at Tim.Higgins@WSJ.com and Trefor Moss at Trefor.Moss@wsj.com
Credit: By Tim Higgins and Trefor Moss
Subject: Acquisitions & mergers; Automobile industry; Manufacturing; Electric vehicles
Location: China United States--US
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jun 22, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1912234205
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1912234205?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Says It May Put Auto Plant In China
Author: Higgins, Tim; Moss, Trefor
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]23 June 2017: B.4.
ProQuest document link
Abstract:
China, the world's largest market for new-car sales and a big consumer of luxury vehicles, is a crucial market for Tesla. "Tesla is deeply committed to the Chinese market, and we continue to evaluate potential manufacturing sites around the globe to serve the local markets," Tesla said in a written...
Full text: Tesla Inc. said it is exploring with government officials in Shanghai the possibility of opening a facility to build electric vehicles for the Chinese market.
The Silicon Valley auto maker reiterated Thursday that it plans to define its production plans for China by year-end. China, the world's largest market for new-car sales and a big consumer of luxury vehicles, is a crucial market for Tesla.
"Tesla is deeply committed to the Chinese market, and we continue to evaluate potential manufacturing sites around the globe to serve the local markets," Tesla said in a written statement. "While we expect most of our production to remain in the U.S., we do need to establish local factories to ensure affordability for the markets they serve."
Tesla didn't mention a local joint-venture partner. China requires foreign auto makers to operate factories with local partners, though officials have signaled a willingness to relax such requirements.
In May, Tesla Chief Executive Elon Musk, who had recently visited China, suggested such rule changes would be "good timing."
By making cars in China, Tesla could cut the prices of its vehicles by one-third by reducing shipping costs and avoiding import duties, Mr. Musk has said.
In trading in New York on Thursday, Tesla's shares rose 1.7% to $382.61. The stock is up about 80% this year.
China charges a 25% duty on all imported cars, but the hefty markup hasn't deterred affluent buyers who regard a Tesla as a prestige item.
One Chinese Tesla owner, Chen Zhanchong, said he paid $176,000 for a Tesla Model S P90D in late 2015, well over the sales price in the U.S. But the 31-year-old Guangzhou resident, who recently left his job at an internet company, said it was still a good value for a high-performance electric car. "If a cheap Model 3 is produced in China in large quantities, local companies won't be able to compete," Mr. Chen said. "Tesla will enjoy explosive growth."
Tesla reported more than $1 billion in revenue in China in 2016, a figure that analysts say equates to about 11,000 vehicle sales. The company sold just over 76,000 cars globally last year.
---
Junya Qian contributed to this article.
Credit: By Tim Higgins and Trefor Moss
Subject: Acquisitions & mergers; Automobile industry; Electric vehicles
Location: China New York United States--US
People: Musk, Elon
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2017
Publication date: Jun 23, 2017
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1912447962
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1912447962?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Elon Musk Teases Sunday Announcement About Tesla Model 3 Timing; Enthusiasm ahead of production of the car has helped push company's shares to record highs
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 June 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. Chief Executive Elon Musk teased on his Twitter account that an announcement about the timing of the coming Model 3 sedan will come on Sunday.
Production of the $35,000 car is scheduled to begin next month and investor enthusiasm has helped push the company's shares to record highs, giving the Silicon Valley auto maker a market capitalization higher than General Motors Co. and Ford Motor Co.
At 1:51 a.m. EDT on Friday, Musk responded to a Twitter message pleading for an answer for when the final release date of the vehicle with: "News on Sunday."
The Model 3 is part of Mr. Musk's strategy to boost production next year to 500,000 from about 84,000 last year, turning the auto maker into a more mainstream player from a niche luxury brand. GM, for example, sold 10 million vehicles last year.
Tesla is expected to release its second-quarter global sales results next week. The company is projected to have sold 23,655 vehicles during the three-month period, according to the average estimate of four analysts surveyed by The Wall Street Journal.
A record first quarter of about 25,000 deliveries helped fan enthusiasm for Tesla and put the company on track to meet its goal of selling 47,000 to 50,000 Model S sedans and Model X sport-utility vehicles during the first half of this year.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Social networks; Automobile industry; Vehicles
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Twitter Inc; NAICS: 519130; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jun 30, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1914851501
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1914851501?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Musk Says Stay Tuned for Release Date of Tesla Car
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]01 July 2017: B.3.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. Chief Executive Elon Musk teased on his Twitter account Friday that an announcement about a release date for the electric car maker's Model 3 sedan will come on Sunday.
Production of the $35,000 car is scheduled to begin in July and investor enthusiasm has helped push the company's shares to record highs, giving the Silicon Valley auto maker a market capitalization that exceeds that of General Motors Co. and Ford Motor Co.
At 1:51 a.m. EDT on Friday, Mr. Musk responded to a Twitter message pleading for word of the vehicle's release with: "News on Sunday."
The Model 3 is part of Mr. Musk's strategy to boost production next year to 500,000 vehicles from about 84,000 last year, transforming the auto maker from a niche luxury brand into a more mainstream player. GM, for example, sold 10 million vehicles last year.
Tesla is expected to release its second-quarter global sales results next week. The company is expected to have sold 23,655 vehicles during the three-month period, according to the average estimate of four analysts surveyed by The Wall Street Journal.
A record first quarter of about 25,000 deliveries helped fan enthusiasm for Tesla and put the company on track to meet its goal of selling 47,000 to 50,000 Model S sedans and Model X sport-utility vehicles during the first half of this year.
Credit: By Tim Higgins
Subject: Social networks; Automobile industry; Vehicles
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Twitter Inc; NAICS: 519130; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Jul 1, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1914961279
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1914961279?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-25
Database: The Wall Street Journal
Tesla Set to Deliver First Model 3 Cars July 28; At $35,000, the new car is far less expensive than two existing Tesla models
Author: Dean, Jason
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. Chief Executive Elon Musk indicated late Sunday that the company would deliver the first batch of its new Model 3 sedans on July 28.
Customers and investors have been eager to know when the Silicon Valley company will start delivering the car, which at $35,000 is far less expensive than its two existing models and which Tesla intends to sharply increase its total sales.
Tesla had said production would start this month, but hadn't given a date for deliveries. Mr. Musk, who frequently announces plans on Twitter, teased in a tweet in the early hours of Friday morning Eastern time that there would be related news Sunday .
After being silent on the subject most of Sunday, shortly after 11 p.m. Pacific time he tweeted: "Handover party for first 30 customer Model 3's on the 28th!" He said in separate messages that the car had "passed all regulatory requirements for production," and that Tesla is on course to produce 20,000 Model 3s a month in December.
Tesla is scheduled to disclose global vehicle sales for the second quarter as early as Monday morning. The company is projected to have sold 23,655 vehicles during the three-month period, according to the average estimate of four analysts surveyed by The Wall Street Journal.
Write to Jason Dean at jason.dean@wsj.com
Credit: By Jason Dean
Subject: Automobile industry; Vehicles
People: Musk, Elon
Company / organization: Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 3, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1915404529
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1915404529?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla's Second-Quarter Sales Hit by Production Shortfall; Silicon Valley auto maker says supply issue with battery packs hindered sales
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. on Monday said production shortfalls hindered sales during the second quarter, hours after Chief Executive Elon Musk signaled an even tighter timetable for the auto maker's ambitious plans to produce its new Model 3 sedans.
The Silicon Valley auto maker said it sold about 22,000 Model S and Model X sport-utility vehicles during the period ended in June, up about 53% from a year earlier.
With 47,100 vehicles delivered in the first half, Tesla just met its goal of delivering 47,000 to 50,000 vehicles. But the quarterly results were short of the average estimate of 23,655 deliveries, according to four analysts surveyed by The Wall Street Journal.
Tesla said sales could have been stronger if not for a "severe production shortfall" of battery packs, which until early June caused production to average about 40% below demand. "Once this was resolved, June orders and deliveries were strong, ranking as one of the best in Tesla history," the company said in a statement.
The company said it expects to deliver more Model S and Model X vehicles in the second half than in the first six months, "provided global economic conditions do not worsen considerably."
Tesla's jump in second-quarter sales bucks the trend among auto makers such as General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV, which earlier Monday reported steep sales declines in June compared with a year ago.
Tesla is far smaller than those auto makers by sales, but it aims to become more of a mainstream player with the rollout of its newest car, the Model 3, which at $35,000 is far less expensive than its two existing models and is central to the company's plans to sharply increase total sales.
On Sunday night Pacific time, Mr. Musk tweeted that he aims to have 30 vehicles ready to hand over to customers on July 28, followed by 100 cars in August and 1,500 in September.
That initial plan appears slower than one Mr. Musk laid out in February, when he revealed he was pushing suppliers to be ready for a weekly run rate of 1,000 vehicles in July to 2,000 in August and 4,000 in September.
However, Mr. Musk's tweet , sent shortly after 11 p.m. PDT Sunday, said Tesla plans to hit a rate of 20,000 Model 3s a month in December, in line with his previous pledge of having 5,000 vehicles a week by year's end.
In February, Mr. Musk suggested the targets were set for suppliers, knowing they could slip. "These are parts orders and the parts need to arrive, then you can turn into a car and the car needs to be delivered to customers," he said in February on an earnings conference call. "None of these things occur instantaneously."
"This is definitely scaling back," said Rebecca Lindland, an analyst for the automotive researcher Kelley Blue Book. She likened Mr. Musk's early statements about production to stretch goals instead of plans.
The Model 3 is part of Mr. Musk's strategy to boost production next year to 500,000 from about 84,000 last year, turning the auto maker into a more mainstream player from a niche luxury brand. General Motors Co., for example, sold 10 million vehicles last year.
Enthusiasm for Tesla and its new model has helped push the company's shares to record highs, giving the Silicon Valley auto maker a market capitalization higher than GM and Ford Motor Co.
On Monday, Tesla's stock fell 2.5% to $352.62 and were trading slightly lower in the after-hours. The shares are up about 65% this year.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Social networks; Automobile industry; Financial performance; Vehicles
Company / organization: Name: General Motors Corp; NAICS: 333415, 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 3, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1915405343
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1915405343?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Part Shortfall Hurts Sales
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 July 2017: B.2.
ProQuest document link
Abstract:
Tesla's jump in second-quarter sales bucks the trend among auto makers such as General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV, which Monday reported steep sales declines in June compared with a year ago. Enthusiasm for Tesla and its new model has helped push the company's shares...
Full text: Tesla Inc. on Monday said production shortfalls hindered sales during the second quarter, hours after Chief Executive Elon Musk signaled an even tighter timetable for the auto maker's ambitious plans to produce its new Model 3 sedans.
The Silicon Valley auto maker said it sold about 22,000 Model S and Model X sport-utility vehicles during the period ended in June, up about 53% from a year earlier.
With 47,100 vehicles delivered in the first half, Tesla just met its goal of delivering 47,000 to 50,000 vehicles.
Tesla said sales could have been stronger if not for a "severe production shortfall" of battery packs, which until early June caused production to average about 40% below demand.
"Once this was resolved, June orders and deliveries were strong, ranking as one of the best in Tesla history," the company said.
The company said it expects to deliver more Model S and Model X vehicles in the second half than in the first six months, "provided global economic conditions do not worsen considerably."
Tesla's jump in second-quarter sales bucks the trend among auto makers such as General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV, which Monday reported steep sales declines in June compared with a year ago.
Tesla is far smaller than those auto makers by sales, but it aims to become more of a mainstream player with the rollout of its newest car, the Model 3, which at $35,000 is far less expensive than its two existing models and is central to the company's plans to sharply increase total sales.
The Model 3 is part of Mr. Musk's strategy to boost production next year to 500,000 from about 84,000 last year, turning the auto maker into a more mainstream player from a niche luxury brand. GM, for example, sold 10 million vehicles last year.
Enthusiasm for Tesla and its new model has helped push the company's shares to new highs, giving the Silicon Valley auto maker a market capitalization above those of GM and Ford.
Credit: By Tim Higgins
Subject: Automobile industry; Automobile sales
People: Musk, Elon
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Fiat Chrysler Automobiles NV; NAICS: 336111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2017
Publication date: Jul 5, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1915746305
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1915746305?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Reality Bites for Tesla Shares; Latest Model 3 plan from Elon Musk actually scales back prior forecasts as fresh competition emerges
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Investors started to lose patience with Tesla this week after another unkept promise. The jolt from Volvo that all its cars would be electric or hybrid by 2019 casts serious doubt on Tesla's ability to live up to its long-term expectations.
The electric car maker's shares were down more than 10% this week through Wednesday, in less than two full days of trading because of the holiday.
The belief that Tesla would generate hefty profits in the coming years led investors to forgive the company's long history of missing its own deadlines.
In the latest example, CEO Elon Musk promised earlier this week that Tesla would be able to build 20,000 of its mass-market Model 3s a month by December. Last year, he told analysts that Tesla was aiming to build at least 100,000 Model 3s in 2017. The new timeline, which calls for 100 cars built in August and more than 1,500 in September, would fall well short of the earlier forecast.
But fresh competition means patient attitudes won't last forever. In addition to Volvo, Volkswagen has promised several new electric cars by 2020. And General Motors has begun selling the all-electric Chevrolet Bolt.
The Model 3 will launch as U.S. auto sales are slowing dramatically . And sales of Tesla's two high-end models haven't grown meaningfully in a year. The company blames this in part on production issues, but Tesla produced more vehicles than it sold for the last six quarters. Tesla said Model S and X deliveries in the second half of the year would likely be higher than in the first, though it added the caveat: "provided global economic conditions do not worsen considerably."
Analysts are seemingly bracing for that possibility. They forecast an adjusted loss of $5.81 per share this year on average, according to FactSet; a year ago they predicted $2.62 a share in adjusted profit.
Analysts still expect big profits by 2020, predicting $11.93 a share, on average. But those estimates were also much higher a year ago. Meanwhile, Tesla's stock has surged more than 50% this year, and trades at more than 28 times that 2020 earnings forecast. Rival auto makers trade for a fraction of that multiple.
Investors' expectations for Tesla have gotten so disconnected from reality that even if the Model 3 succeeds and growth resumes for its other two models, the company's shares could perform terribly.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Automobile industry; Stock prices; Investments; Electric vehicles
Location: United States--US
People: Musk, Elon
Company / organization: Name: Volkswagen AG; NAICS: 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 5, 2017
column: Heard on th e Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1915927251
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1915927251?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Volvo Gives Tesla a Shock, as Others Plan Electric Push; Volvos, Jaguars, BMWs and Fords, among others, will offer a system that uses battery technology to comply with emissions rules
Author: Stoll, John D; Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Volvo, the auto maker that spent 90 years polishing a reputation for safety, indicated Wednesday it is mounting an ambitious challenge to Tesla Inc.'s electric cars.
But the even tougher news for Tesla's billionaire founder, Elon Musk, is that the Scandinavian company isn't the only deep-pocketed rival planning to compete with the Silicon Valley pioneer. Nearly all global vehicle makers are mounting their own electric-car push, powered by ever-cheaper prices for batteries, stricter emissions rules and lucrative government incentives for customers.
Tesla's shares fell more than 7% Wednesday, the steepest decline in a year in which the company passed both General Motors Co. and Ford Motor Co. in stock-market valuation.
The Volvo announcement is "the hard-reality case that Tesla will face intense competition by next decade from legacy [auto makers] expanding their electric options," Barclays auto analyst Brian Johnson said in an investor note. "Tesla may have a lead in battery costs," he said, but the "scale advantages" of multinational car companies likely means Mr. Musk's lead isn't as sizable as often believed.
Investors also were reacting to Tesla's news Monday that second-quarter sales of its luxury Model S and Model X sport-utility vehicle were lower than analysts had projected because of a supply issue with battery packs, raising new fears the company will have trouble meeting ambitious production targets for its cheaper Model 3 , which starts at $35,000.
Several analysts also questioned whether demand for Tesla's two niche products is waning as it scrambles to make the leap to the mass market. The Model S, which sells for about $100,000, "is getting a little long in the tooth," said Dave Sullivan, an analyst for AutoPacific Inc.
Owned by China's Geely Holding Group, Sweden-based Volvo on Wednesday outlined plans to transition its entire lineup of new models to vehicles powered either by batteries or hybrid electric-internal combustion engines by 2019.
While representing potentially the biggest bet yet against gasoline and diesel cars, the announcement follows a blueprint being drawn up by Toyota Motor Corp., Volkswagen AG and Daimler AG. Those companies plan to sell millions of electric cars by 2025--evidence the auto industry's incumbents believe the internal-combustion engine has an expiration date.
While Mr. Musk is broadly credited with making electric cars sexy, regulations and financial incentives in the U.S., the European Union and China are the driving force pushing most auto makers to look to batteries as the industry's silver bullet for reducing emissions.
Strict fuel-economy mandates are in place in the world's largest vehicle markets, often matched by tax breaks that can cut up to 50% off the price of an electric vehicle.
In the U.S., Mr. Musk's Tesla is the face of the electric-car movement, outpacing all-electric offerings from GM and Nissan Motor Co. that are cheaper but considered dull by comparison.
A new class of electrified or battery-assisted vehicles will soon challenge Tesla's thrust, however, with nameplates as exotic as Aston Martin, as rugged as Jeep's Wrangler or iconic as Ford's Mustang. As with Teslas, many will offer buyers a $7,500 federal tax break.
Investors have prized Tesla's focus on technology, including semi-autonomous driving and over-the-air software updates--but Volvo and others are looking to match it.
Car makers in the U.S. threatening to edge in on Tesla's turf are pressured by Obama-administration rules mandating a steep increase in miles-per-gallon performance over the next eight years.
Auto executives say a broad shift toward electrification--whether hybrids that pair high-powered batteries with conventional gasoline engines, or full-blown electric cars--will be needed to meet those regulations.
The Trump administration is reviewing federal emissions rules, but any rollback could take several years and may not address mandates at the state level. California, and several states that subscribe to its clean-air rules, demand that 15% of vehicle sales by 2025 be zero-emission cars.
Yet Americans continue to shrug off electric vehicles. While all but two states have regulations or incentives designed to promote their sales, cheap gasoline means car makers are investing in a technology that today offers meager returns.
Ford, for instance, is spending $4.5 billion to revamp its U.S. portfolio with electric or hybrid trucks and SUVs, including a hybrid version of its F-150 pickup, the best-selling vehicle in America. Meantime, Fiat Chrysler Automobiles NV's rugged Jeep lineup will soon offer battery power to tackle off-road challenges.
But less than 1% of the record 17.5 million-plus vehicles sold in the U.S. in 2016 were all-electric, says WardsAuto.com.
In Detroit, electrified vehicles have long been panned as "compliance cars" because they help the makers comply with clean-air rules--even if they don't excite many customers or turn a profit. These cars may be good for the environment, but bad for the bottom line.
Often priced significantly higher than a conventional car, vehicles like GM's Chevrolet Volt or Fiat's 500e are niche vehicles that get a fraction of the marketing support or consumer interest that profit-rich pickup trucks and SUVs achieve. Fiat Chrysler Chief Executive Sergio Marchionne has even asked buyers not to purchase the Fiat electric subcompact because the company loses thousands of dollars on each sale.
To get electrification into the mainstream, analysts say gas prices likely need to rise while government subsidies remain in place or increase, and charging stations for the vehicles become much more numerous.
In a report published earlier in this year, McKinsey & Co. noted that "auto makers face a difficult challenge" when it comes to how quickly to move away from internal combustion engines. The consulting firm estimates 30% of U.S. buyers would consider an EV purchase today, but car companies must boost consumer-education initiatives and marketing campaigns at a time when overall demand for automobiles is slipping.
"They must strike the right balance between selling enough EVs to comply with tightening regulatory fleet emissions and fuel economy targets, while also preventing the incremental cost of adding battery packs from cannibalizing corporate profits," McKinsey said.
The consulting firm estimates battery-pack prices have fallen about 80% since 2010, and an electric car and comparable gasoline-powered car could hit cost parity within a decade.
Write to John D. Stoll at john.stoll@wsj.com and Tim Higgins at Tim.Higgins@WSJ.com
Related
* Tesla's Sales Raise New Fears Ahead of Model 3
* Heard on the Street: Reality Bites for Tesla Shares
* Volvo Plans to Go Electric, to Abandon Conventional Car Engine by 2019
* Tesla Set to Deliver First of Its Lower-Cost Model 3 Cars July 28 (July 3)
Credit: By John D. Stoll and Tim Higgins
Subject: Automobile industry; Corporate profits; Emissions; Subsidies; Electric vehicles; Gasoline prices; Trucks; Consulting firms; Engines
Location: United States--US Detroit Michigan China California
Company / organization: Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110; Name: Fiat Chrysler Automobiles NV; NAICS: 336111; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Volvo Car Corp; NAICS: 336111; Name: Volkswagen AG; NAICS: 336111, 336390; Name: University of Michigan; NAICS: 611310; Name: Daimler AG; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 5, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1915936263
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1915936263?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla's Sales Raise New Fears Ahead of Model 3; Shares slide after latest sales figures prompt concerns about demand
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. shares took a beating on Wednesday after several analysts questioned whether customer demand for its two electric vehicles is waning as the company begins producing a cheaper sedan.
The Silicon Valley auto maker's shares fell nearly 5% in midday trading to $335.74--the lowest point in more than a month--after rising about 69% this year through last week on enthusiasm for the coming Model 3 sedan , which is central to Tesla's plan to sharply increase total sales.
Tesla on Monday reported sales of its Model S cars and Model X sport-utility vehicles were lower than analysts expected because of a supply issue with battery packs, raising new fears the company will have trouble meeting ambitious production targets for the Model 3.
Goldman Sachs analyst David Tamberrino reiterated a sell rating on Tesla's stock, writing in an note to clients that demand for the Model S and Model X vehicles appears to be plateauing after production exceeded second-quarter sales. "We see potential for downside as the Model 3 launch curve undershoots the company's production targets," he said.
Toni Sacconaghi, an analyst for Sanford C. Bernstein, said Tesla's sales report "raised more questions than answers" and asked why investors didn't find out sooner about the "severe production shortfall" of battery packs, which Tesla said caused production to average about 40% below demand.
"If production was so poor in April and May for its 100 kwh battery, why didn't Tesla executives discuss the issue on the company's Q1 earnings call on May 3?" Mr. Sacconaghi said in a note to investors.
Tesla spokeswoman Sarah O'Brien didn't respond to a request for comment.
Tesla said it sold about 22,000 Model S and Model X vehicles in the second-quarter, up about 53% but short of the average estimate of 23,655 deliveries, according to four analysts surveyed by The Wall Street Journal. Tesla finished the first half with sales of 47,100 vehicles, just meeting its goal of delivering 47,000 to 50,000 vehicles.
"Model S is getting a bit long in the tooth," said Dave Sullivan, an analyst for automotive consultancy AutoPacific Inc.
The discouraging analyst reports came as Volvo Cars, the auto maker owned by Chinese automotive group Geely Holding Group, said all new models starting in 2019 would be either fully electric or a hybrid . The move means Volvo would become the first major auto maker to abandon the conventional car engine , in a challenge to Tesla.
Tesla made about 84,000 fully electric cars last year, and Chief Executive Officer Elon Musk is depending upon the Model 3, which will sell for about $35,000, to help bolster his annual production to 500,000 next year. Part of that plan seemed to depend upon making a combined 100,000 Model S and Model X vehicles.
The Model S, which typically sells for $100,000, first went into production in the third quarter of 2012 and has helped fuel quarter after quarter of sales growth since. Mr. Musk has tried to keep that model fresh by making some tweaks, such as offering better batteries and software updates.
Model X went on sale in 2015 and was plagued by production problems, which Tesla addressed in its press release on Monday. "It should also be noted that production quality and field reliability of the Model X, for which Tesla has been fairly criticized, have improved dramatically," the company said. "It is now rare for a newly produced Model X to have initial quality problems."
J.D. Power, the arbitrator of initial quality, published its annual study last month but didn't include any Tesla vehicles because of a small sample size.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Investments; Automobile sales; Electric vehicles; Quality
People: Musk, Elon
Company / organization: Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 5, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1915937929
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1915937929?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Volvo Gives Tesla a Shock, As Others Plan Electric Push
Author: Stoll, John D; Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 July 2017: A.1.
ProQuest document link
Abstract:
Investors also were reacting to Tesla's news Monday that second-quarter sales of its luxury Model S and Model X sport-utility vehicle were lower than analysts had projected because of a supply issue with battery packs, raising new fears the company will have trouble meeting ambitious production targets for its cheaper Model 3, which starts at $35,000. While representing potentially the biggest bet yet against gasoline and diesel cars, the announcement follows a blueprint being drawn...
Full text: Volvo, the auto maker that spent 90 years polishing a reputation for safety, indicated Wednesday it is mounting an ambitious challenge to Tesla Inc.'s electric cars.
But the even tougher news for Tesla's billionaire founder, Elon Musk, is that the Scandinavian company isn't the only deep-pocketed rival planning to compete with the Silicon Valley pioneer. Nearly all global vehicle makers are mounting their own electric-car push, powered by ever-cheaper prices for batteries, stricter emissions rules and lucrative government incentives for customers.
Tesla's shares fell more than 7% Wednesday, the steepest decline in a year in which it passed both General Motors Co. and Ford Motor Co. in stock-market valuation.
The Volvo announcement is "the hard-reality case that Tesla will face intense competition by next decade from legacy [auto makers] expanding their electric options," Barclays auto analyst Brian Johnson said in an investor note. "Tesla may have a lead in battery costs," he said, but the "scale advantages" of multinational car companies likely means Mr. Musk's lead isn't as sizable as often believed.
Investors also were reacting to Tesla's news Monday that second-quarter sales of its luxury Model S and Model X sport-utility vehicle were lower than analysts had projected because of a supply issue with battery packs, raising new fears the company will have trouble meeting ambitious production targets for its cheaper Model 3, which starts at $35,000.
Several analysts also questioned whether demand for Tesla's two niche products is waning as it scrambles to make the leap to the mass market. The Model S, which sells for about $100,000, "is getting a little long in the tooth," said Dave Sullivan, an analyst for AutoPacific Inc.
Owned by China's Geely Holding Group, Sweden-based Volvo on Wednesday outlined ambitious plans to transition its entire lineup to vehicles powered either by batteries or hybrid electric-internal combustion engines by 2019.
While representing potentially the biggest bet yet against gasoline and diesel cars, the announcement follows a blueprint being drawn up by Toyota Motor Corp., Volkswagen AG and Daimler AG. Those companies plan to sell millions of electric cars by 2025 -- evidence the auto industry's incumbents believe the internal-combustion engine has an expiration date.
While Mr. Musk is broadly credited with making electric cars sexy, regulations and financial incentives in the U.S., the European Union and China are the driving force pushing most auto makers to look to batteries as the industry's silver bullet for reducing emissions.
Strict fuel-economy mandates are in place in the world's largest vehicle markets, often matched by tax breaks that can cut up to 50% off the price of an electric vehicle.
In the U.S., Mr. Musk's Tesla is the face of the electric-car movement, outpacing all-electric offerings from GM and Nissan Motor Co. that are cheaper but considered dull by comparison.
A new class of electrified or hybrid vehicles will soon challenge Tesla's thrust, however, with nameplates as exotic as Aston Martin, as rugged as Jeep's Wrangler or iconic as Ford's Mustang.
Investors have prized Tesla's focus on technologies, including semi-autonomous driving and over-the-air software updates -- but Volvo and others are looking to match them.
Car makers in the U.S. are threatening to edge in on Tesla's turf, pressured by Obama-administration rules mandating a steep increase in miles-per-gallon performance over the next eight years.
Auto executives say a broad shift toward electrification -- whether hybrids that pair high-powered batteries with conventional gasoline engines, or full-blown electric cars -- will be needed to meet those regulations.
The Trump administration is reviewing federal emissions rules, but any rollback could take several years and may not address mandates at the state level. California, and several states that subscribe to its clean-air rules, demand that 15% of vehicle sales by 2025 be zero-emission cars.
Yet Americans continue to shrug off electric vehicles. While all but two states have regulations or incentives designed to promote their sales, cheap gasoline means car makers are investing in a technology that today offers meager returns.
Ford, for instance, is spending $4.5 billion to revamp its U.S. portfolio with electric or hybrid trucks and SUVs, including a hybrid version of its F-150 pickup, the best-selling vehicle in America.
But less than 1% of the record 17.5 million-plus vehicles sold in the U.S. in 2016 were all-electric, says WardsAuto.com.
In Detroit, electrified vehicles have long been panned as "compliance cars" because they help the makers comply with clean-air rules -- even if they don't excite many customers or turn a profit.
To get electrification into the mainstream, analysts say gas prices likely need to rise while government subsidies remain in place or increase, and charging stations for the vehicles become much more numerous.
Credit: By John D. Stoll and Tim Higgins
Subject: Investments; Emissions; Gasoline prices; Automobile industry; Electric vehicles
Location: United States--US China
Company / organization: Name: Zhejiang Geely Holding Group Co Ltd; NAICS: 336111; Name: Volvo AB; NAICS: 336111, 336120; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2017
Publication date: Jul 6, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1916101545
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1916101545?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Big Talk From Tesla Disturbs Investors
Author: Grant, Charley
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 July 2017: B.12.
ProQuest document link
Abstract:
The electric car maker's shares were down more than 10% this week through Wednesday, in less than two full days of trading because of the holiday. Investors' expectations for Tesla have gotten so disconnected from reality that even if the Model 3 succeeds and growth resumes for its other two...
Full text: [Financial Analysis and Commentary]
Investors started to lose patience with Tesla Motors this week after another unkept promise.
The jolt from Volvo that all its cars would be electric or hybrid by 2019 casts serious doubt on Tesla's ability to live up to its long-term expectations. The electric car maker's shares were down more than 10% this week through Wednesday, in less than two full days of trading because of the holiday.
The belief that Tesla would generate hefty profits in the coming years led investors to forgive the company's long history of missing its own deadlines.
In the latest example, CEO Elon Musk promised earlier this week that Tesla would be able to build 20,000 of its mass-market Model 3s a month by December. Last year, he told analysts that Tesla aimed to build at least 100,000 Model 3s in 2017.
The new timeline, which calls for 100 vehicles manufactured in August and more than 1,500 in September, would fall well short of the earlier forecast.
But fresh competition means patient attitudes won't last forever. In addition to Volvo, Volkswagen has promised several new electric cars by 2020. And General Motors has begun selling the all-electric Chevrolet Bolt.
The Model 3 will launch as U.S. auto sales are slowing dramatically. And sales of Tesla's two high-end models haven't grown meaningfully in a year. The company blames this in part on production issues, but Tesla produced more vehicles than it sold for the past six quarters.
Analysts still expect big profits by 2020, predicting $11.93 a share, on average. But those estimates were also much higher a year ago.
Meanwhile, Tesla's stock has surged more than 50% this year and trades at more than 28 times that 2020 earnings forecast. Rival auto makers trade for a fraction of that multiple.
Investors' expectations for Tesla have gotten so disconnected from reality that even if the Model 3 succeeds and growth resumes for its other two models, the company's shares could perform terribly.
Credit: By Charley Grant
Subject: Automobile industry; Investments; Electric vehicles; Heard on the street (wsj)
Location: United States--US
People: Musk, Elon
Company / organization: Name: Volkswagen AG; NAICS: 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.12
Publication year: 2017
Publication date: Jul 6, 2017
column: Heard on the Street
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1916101859
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1916101859?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-05
Database: The Wall Street Journal
Tesla to Build World's Biggest Lithium-Battery System; The 100-megawatt storage system in Australia showcases the technology's potential but raises questions about the company's focus
Author: Stewart, Robb M; Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: MELBOURNE, Australia--Tesla Inc. Chief Executive Elon Musk has agreed to build the world's largest lithium-ion battery system in Australia, a bid to showcase the technology's potential but one that raises questions about the company's focus on ramping up production of its Model 3 sedan.
The plan, revealed Friday, is to build a 100-megawatt storage system in the state of South Australia, which has been hit by a string of blackouts over the past year. The system will collect power generated by a wind farm built by French energy company Neoen.
Mr. Musk said the project will be three times more powerful than any other battery system in the world. He pledged to complete it within 100 days of signing an agreement or it would be free.
"This is not a minor foray into the frontier, this is like going three times further than anyone has gone before," Mr. Musk said.
The Silicon Valley auto maker didn't detail how it plans to handle the ambitious goals of meeting the needs of battery packs for Australia while also scaling up battery production for the Model 3 at its new giant battery factory in Nevada .
Dennis Virag, a manufacturing consultant who has worked in the automotive industry for 40 years, said the move is concerning. "You can plan as well as you want but there's always going to be a hiccup along the line," he said.
Analysts, pointing to Tesla's quick deployment of a large battery array in Southern California, said there is little doubt Tesla can manufacture batteries off-site and plug them into the grid in 100 days.
The risk, though, is Tesla can't do both projects fast enough and will have to prioritize one over the other, said David Whiston, an analyst for Morningstar Research. "Given the pledge to finish the Australia project in 100 days, the auto business would suffer in that scenario," he said.
Production issues around the battery pack led to a shortfall of supply for Tesla during the second quarter, hindering sales, the company said Monday . It has declined to discuss the details, saying the issue was resolved in June. Mr. Musk this week also revealed a dramatically slower ramp up of the Model 3 than he previously had suggested suppliers should prepare for.
Tesla said Friday the issues that caused the battery-pack shortfall, which affected certain Model S and Model X vehicles, aren't a factor for the Australia project or the Model 3. While Mr. Musk earlier in the day acknowledged the risks of building the Australian system on a large scale, the company said it is confident it can "meet delivery dates for our concurrent vehicle and global energy storage projects."
The project is strategic for Tesla, given many of the battery-storage facilities built to-date have been pilot projects, said Shayle Kann, head of clean-energy consultancy GTM Research. The firm estimates the installation would require about 500 to 600 of Tesla's Powerpacks, and would cost roughly $80 million.
Tesla was selected from more than 90 bids to build a storage system for the state, said South Australia Premier Jay Weatherill. The value of the project wasn't disclosed.
The origins of the deal trace back to a Twitter exchange in March between Mr. Musk and local entrepreneur Mike Cannon-Brookes, which led to conversations between Mr. Musk and Mr. Weatherill and Australian Prime Minister Malcolm Turnbull.
South Australia has turned increasingly toward renewable power sources--it relies on solar and wind generation for about 40% of its electricity--but has been vulnerable to shortages because of a lack of storage capacity. A powerful storm last year caused a statewide blackout that left homes and businesses without power for several days. The state was hit with more blackouts early this year as soaring temperatures pushed up demand for power.
The Tesla battery system will provide stability to the power system and should lead to lower prices for consumers, Mr. Weatherill said.
The 129 megawatt-hour project will provide enough power for more than 30,000 homes, about equal to the number of homes that lost power during the blackouts, Tesla said.
Ian Lowe, emeritus professor of science, technology and society at Griffith University in Queensland, said the storage system won't by itself allow South Australia to have reliable energy just from wind and solar but it would be an important step.
The value of the battery system is in making the power produced by wind easier to dispatch and therefore more profitable, said Geoff James, research principal at University of Technology Sydney's Institute for Sustainable Futures.
Once the project is completed, which Tesla expects will happen by the start of the Australian summer in December, it will be larger than a storage facility in the Southern California desert also built on Tesla batteries. GTM forecasts the market for grid-energy storage in the U.S. will reach $3 billion by the beginning of the next decade, up from $320 million last year.
Erin Ailworth contributed to this article.
Write to Robb M. Stewart at robb.stewart@wsj.com and Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Robb M. Stewart and Tim Higgins
Subject: Electric utilities; Blackouts; Electricity; Power; Electricity distribution
Location: Australia South Australia Australia Southern California
People: Turnbull, Malcolm
Company / organization: Name: Griffith University; NAICS: 611310; Name: Twitter Inc; NAICS: 519130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 7, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1916638512
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1916638512?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla's Skid Is Coming at the Worst Time; Slide in share price, looming cash needs present challenge for Elon Musk
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: When the story of Tesla is finally written, this week will be seen as a crucial juncture. On Friday, the electric car company started production on its highly anticipated Model 3, one day after its stock briefly fell into a bear market .
The week's 13% share-price decline as of Friday morning brings the company's financial position into fresh focus given its historic reliance on the equity market. At first glance , the company has plenty of cash on hand--more than $4 billion as of March 31. But that is likely to go quickly.
Tesla's free cash outflow was $622 million in the first quarter. Since Tesla delivered fewer cars in the second quarter than in the first, there is a decent chance that number will worsen. Tesla said Friday that about 3,500 cars were in transit to customers at the end of June, the lowest tally in five quarters.
Accounts payable have risen to nearly $1.5 billion. Meanwhile, Tesla has $7 billion in long-term debt outstanding.
The Model 3 isn't likely to improve matters, at least in the short term. Tesla said in the first quarter that it expected an additional $1.5 billion on capital spending before the Model 3 began production.
Analysts at Guggenheim Securities, which have a $430 price target on the stock, about 37% above its current level, predict that gross margins on the Model 3 will be negative 15% at the start of the launch. Gross margin won't turn positive until the middle of next year, according to their estimates. Tesla reported an automotive gross margin of 27.4% in the first quarter.
Tesla could forgo some of its planned capital spending if it chose to do so. But that would slow the Model 3 rollout amid increasing competition , which could hammer the stock.
The good news is that Chief executive Elon Musk should have other options.
Tesla historically has had no difficulty accessing the capital markets. The company has issued equity or convertible debt in every year since its 2010 initial public offering, most recently in March. And despite a bad week, the shares are up more than 40% so far this year.
Yet Tesla needs to raise several billion dollars to meet its goals. Assuming a $1 billion cash balance and four quarters of similarly negative cash flow, Tesla would need to raise nearly $3 billion over the next year. At current prices, that amounts to roughly 6% of the total equity value. The more the shares slip, the greater the potential dilution of existing owners.
Chinese technology company Tencent's recent investment in Tesla stock is an encouraging sign that there is appetite for large chunks of equity. While that deal didn't involve fresh cash, it suggests other potential options besides a traditional secondary market issuance.
So the past would suggest that the recent selloff won't be much of a long-term problem for Tesla shareholders. Yet Tesla's balance sheet and the increasingly crowded electric-car field suggest this is a moment the company can't risk squandering.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Financial performance; Equity; Capital expenditures
People: Musk, Elon
Company / organization: Name: Guggenheim Securities; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 7, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1916787345
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1916787345?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tesla Updates Quarterly Sales Report With Additional Data; Electric-car maker says vehicle transit numbers to be included in all future quarterly releases
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. on Friday updated its second-quarter sales report to include the number of vehicles that were in transit at the end of the period--a number that was absent in the report earlier in the week and had triggered questions from analysts.
The Silicon Valley auto maker said about 3,500 cars and sport-utility vehicles were in transit at the end of the second quarter and would be counted in its third-quarter delivery tally. The new figure doesn't affect the delivery tally for the second quarter that Tesla announced on Monday .
Tesla had included information on vehicles in transit in previous quarterly sales announcements, and its absence from Monday's statement had led some analysts to raise concerns. Bernstein analyst Toni Sacconaghi, for example, said in a note Wednesday that the uncharacteristic lack of the numbers caused him to suspect that Tesla's inventory of vehicles was swelling further.
Tesla on Friday vowed to continue providing such information in all quarterly disclosures in the future.
The figure for vehicles in transit was lower than what Tesla reported for that category at the end of the first quarter and at the end of the second quarter a year earlier.
On Monday, Tesla said it sold about 22,000 Model S sedans and Model X sport-utility vehicles globally during the second quarter, a 53% increase from a year earlier. That put total first-half deliveries at 47,100 vehicles, just meeting Tesla's goal of delivering 47,000 to 50,000 vehicles.
Still, second-quarter sales were lower than analyst expectations and raised new questions about demand for the company's current two vehicles as production gears up this month for a cheaper sedan called the Model 3. Tesla shares fell about 15% this week through the close of trading Thursday after increasing nearly 70% this year through last week. The shares were up just under 1% in intraday trading Friday.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Heard: Tesla's Skid Is Coming at the Worst Time
* Tesla Plans to Build World's Biggest Lithium-Battery System
* Tesla Touches Bear-Market Territory (July 6)
* Tesla's Sales Raise New Fears Ahead of Model 3 (July 5)
* Tesla's Second-Quarter Sales Hit by Production Shortfall (July 3)
Credit: By Tim Higgins
Subject: Automobile industry; Financial performance; Automobile sales; Vehicles
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 7, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1916806167
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1916806167?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Musk Adds to His Battery Work --- Tesla chief undertakes huge storage project in Australia, just as Model 3 rolls out
Author: Stewart, Robb M; Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 July 2017: B.3.
ProQuest document link
Abstract:
Tesla Inc. Chief Executive Elon Musk has agreed to build the world's largest lithium-ion battery system in Australia, a bid to showcase the technology's potential but one that raises questions about the company's focus on ramping up production of its Model 3 sedan. The Silicon Valley auto maker didn't detail how it plans to handle the ambitious goals of meeting the needs of battery packs for Australia while also scaling up battery production for the...
Full text: MELBOURNE, Australia -- Tesla Inc. Chief Executive Elon Musk has agreed to build the world's largest lithium-ion battery system in Australia, a bid to showcase the technology's potential but one that raises questions about the company's focus on ramping up production of its Model 3 sedan.
The plan, revealed Friday, is to build a 100-megawatt storage system in the state of South Australia, which has been hit by a string of blackouts over the past year. The system will collect power generated by a wind farm built by French energy company Neoen.
Mr. Musk said the project will be three times more powerful than any other battery system in the world. He pledged to complete it within 100 days of signing an agreement or it would be free.
"This is not a minor foray into the frontier, this is like going three times further than anyone has gone before," Mr. Musk said.
The Silicon Valley auto maker didn't detail how it plans to handle the ambitious goals of meeting the needs of battery packs for Australia while also scaling up battery production for the Model 3 at its new giant battery factory in Nevada.
Dennis Virag, a manufacturing consultant who has worked in the automotive industry for 40 years, said the move is concerning. "You can plan as well as you want but there's always going to be a hiccup along the line," he said.
Analysts, pointing to Tesla's quick deployment of a large battery array in Southern California, said there is little doubt Tesla can manufacture batteries off-site and plug them into the grid in 100 days.
The risk, though, is Tesla can't do both projects fast enough and will have to prioritize one over the other, said David Whiston, an analyst for Morningstar Research. "Given the pledge to finish the Australia project in 100 days, the auto business would suffer in that scenario," he said.
Production issues around the battery pack led to a shortfall of supply for Tesla during the second quarter, hindering sales, the company said Monday. It has declined to discuss the details, saying the issue was resolved in June. Mr. Musk this week also revealed a dramatically slower ramp-up of the Model 3 than he previously had suggested suppliers should prepare for.
Tesla said Friday the issues that caused the battery-pack shortfall, which affected certain Model S and Model X vehicles, aren't a factor for the Australia project or the Model 3. While Mr. Musk earlier in the day acknowledged the risks of building the Australian system on a large scale, the company said it is confident it can "meet delivery dates for our concurrent vehicle and global energy storage projects."
The project is strategic for Tesla, given many of the battery-storage facilities built to date have been pilot projects, said Shayle Kann, head of clean-energy consultancy GTM Research. The firm estimates the installation would require about 500 to 600 of Tesla's Powerpacks, and would cost roughly $80 million.
Tesla was selected from more than 90 bids to build a storage system for the state, said South Australia Premier Jay Weatherill. The value of the project wasn't disclosed. The project will provide enough power for more than 30,000 homes, Tesla said.
---
Erin Ailworth contributed to this article.
Credit: By Robb M. Stewart and Tim Higgins
Subject: Automobile industry; Lithium; Batteries
Location: Australia
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Jul 8, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1916942730
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1916942730?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Sales Fall to Zero in Hong Kong After Tax Break Is Slashed; New registrations of company's vehicles dropped to zero from 2,939
Author: Higgins, Tim; Rollet, Charles
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc.'s sales in Hong Kong came to a standstill after authorities slashed a tax break for electric vehicles on April 1, demonstrating how sensitive the company's performance can be to government incentive programs.
Not a single newly purchased Tesla model was registered in Hong Kong in April, according to official data from the city's Transportation Department analyzed by The Wall Street Journal.
In March, shortly after the tax change was announced and ahead of the April 1 deadline, 2,939 Tesla vehicles were registered there--almost twice as many as in the last six months of 2016.
The end of the tax exemption "has really put the brakes on electric-vehicle adoption in Hong Kong," said Mark Webb-Johnson, a founder of Charged Hong Kong, a group that promotes electric vehicles.
As a result of the new policy, the cost of a basic Tesla Model S four-door car in Hong Kong has effectively risen to around $130,000 from less than $75,000.
Hong Kong's decision is effective through March 2018, and the government has said it would review the policy before then.
Tesla doesn't break out vehicle sales by country or region and declined to discuss specifics in Hong Kong. But it acknowledged in a statement a slowdown, calling it "expected" after the tax change and a "short-term" challenge.
"Tesla welcomes government policies that support our mission and make it easier for more people to buy electric vehicles; however, our business does not rely on it," Tesla said. The company said its sales in China, where it faces large tariffs, has risen without government incentives. "At the end of the day, when people love something, they buy it," it said.
Tesla last week said it sold more than 22,000 cars world-wide--either Model S sedans or Model X sport-utility vehicles--in the second quarter, up 53% from a year earlier but short of analyst estimates and the 25,000 it sold in the first three months of 2017. The company said a battery-pack production shortfall affected deliveries .
Tesla's stock dropped sharply in the wake of last week's results, which fueled concerns among analysts and investors that demand for Tesla's current two models is weakening ahead of the launch of the Model 3, a $35,000 sedan. Chief Executive Elon Musk said on Twitter over the weekend that production of the Model 3 had started.
Buyers of Teslas and other electric vehicles in many markets benefit from government incentives. Tesla notes on its website that U.S. purchasers are eligible for a $7,500 federal income-tax credit, plus additional incentives in some states.
Norway has exempted electric vehicles from a range of charges, including import taxes, a 25% value-added tax and the purchase taxes that apply to gas-powered vehicles, according to Tesla. Those policies have helped make Norway, with a population of around 5 million, one of Tesla's biggest markets , ranking second in revenue in 2015 and third last year after the U.S. and China, according to the company.
Incentives vary elsewhere in Europe. Germany exempts electric vehicles from circulation taxes for a decade, while the U.K. exempts such vehicles from an annual circulation tax and full electric cars are exempt from a company car tax, according to the European Automobile Manufacturers' Association.
Tesla warns investors in securities filings that such incentives can change and says that "could have some impact on demand for our products and services."
Last year in Denmark, an incentive program expired and was replaced with a less generous one. New car-registrations for all-electric vehicles of all brands fell 70% in 2016 in the country to 1,373 vehicles, while across the European Union the number grew by 7% to 63,278 vehicles. In the first quarter of this year, only 48 all-electric vehicles were registered in Denmark.
The incentive policies can be controversial. During the Obama administration, Tesla received loans to encourage electric-vehicle development. Though it ultimately paid them back, critics have cited that assistance in arguing Tesla unfairly benefited from U.S. government help.
Mr. Musk has rejected such contentions, saying during an analyst call in May the notion that his company has survived because of government subsidies and tax credits "drives me crazy." Tesla says on balance, industry incentive structures still benefit traditional, combustion-engine vehicles.
Hong Kong, though relatively small, is a significant outpost of luxury-car buyers and trend setters. Its government had long waived its vehicle-registration tax for newly purchased electric automobiles, adding to the attractiveness of Tesla's cars.
Citing increased congestion of privately owned vehicles on its streets, the government said in February that it would be changing the policy so the tax would be waived only on the first 97,500 Hong Kong dollars (US$12,500) of an electric car's purchase price for individuals.
The Hong Kong registrations data don't show actual sales figures but are a close proxy because new cars in Hong Kong must be registered to be driven.
In May, only five privately owned electric vehicles were registered, according to documents provided to district council members and viewed by the Journal.
Tesla said it continues to sell vehicles in Hong Kong each quarter and expects "the Hong Kong market will continue to be very strong over the long-term because it's clear that the people of Hong Kong love our cars."
The reversal in Hong Kong comes as Tesla is planning to expand in mainland China, the world's largest new-car market. Last month, Tesla said it was exploring with the Shanghai city government the possibility of opening a manufacturing facility in China . China charges a 25% duty on all imported cars.
Dave Sullivan, an analyst for the consulting firm AutoPacific Inc., said the Hong Kong decline could foreshadow challenges for Tesla as a luxury brand in China.
"Hong Kong is the fashionable China," he said. "It's not exactly painting a glowing picture for the future of Tesla in China."
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Tesla Updates Quarterly Sales Report With Additional Data (July 7)
* Tesla's Skid Is Coming at the Worst Time (July 7)
* Tesla Plans World's Biggest Lithium-Battery System (July 7)
* Tesla Touches Bear-Market Territory (July 6)
* Tesla's Sales Raise New Fears Ahead of Model 3 (July 5)
* Tesla's Second-Quarter Sales Hit by Production Shortfall (July 3)
Credit: By Tim Higgins and Charles Rollet
Subject: Automobile industry; Automobile sales; Electric vehicles; Incentives
Location: China United States--US
People: Musk, Elon
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 9, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1917129430
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1917129430?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Grinds to Halt in Hong Kong
Author: Higgins, Tim; Rollet, Charles
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 July 2017: B.1.
ProQuest document link
Abstract:
Tesla Inc.'s sales in Hong Kong came to a standstill after authorities slashed a tax break for electric vehicles on April 1, demonstrating how sensitive the company's performance can be to government incentive programs. [...]of the new policy, the cost of a basic Tesla Model S four-door car in Hong Kong has effectively risen to around $130,000 from less than $75,000. Norway has exempted electric vehicles from a range of charges, including import taxes, a 25% value-added tax and the purchase taxes that apply to gas-powered vehicles, according to Tesla. Germany exempts electric vehicles from circulation taxes for a decade, while the U.K. exempts such vehicles from an annual circulation tax and full electric cars are exempt from a company car tax, according to the European Automobile Manufacturers' Association.
Full text: Tesla Inc.'s sales in Hong Kong came to a standstill after authorities slashed a tax break for electric vehicles on April 1, demonstrating how sensitive the company's performance can be to government incentive programs.
Not a single newly purchased Tesla model was registered in Hong Kong in April, according to official data from the territory's Transportation Department analyzed by The Wall Street Journal.
In March, shortly after the tax change was announced and ahead of the April 1 deadline, 2,939 Tesla vehicles were registered there -- almost twice as many as in the last six months of 2016.
The end of the tax exemption "has really put the brakes on electric-vehicle adoption in Hong Kong," said Mark Webb-Johnson, a founder of Charged Hong Kong, a group that promotes electric vehicles.
As a result of the new policy, the cost of a basic Tesla Model S four-door car in Hong Kong has effectively risen to around $130,000 from less than $75,000.
Hong Kong's decision is effective through March 2018, and the government has said it would review the policy before then.
Tesla doesn't break out vehicle sales by country or region and declined to discuss specifics in Hong Kong. But it acknowledged in a statement a slowdown, calling it "expected" after the tax change and a "short-term" challenge.
"Tesla welcomes government policies that support our mission and make it easier for more people to buy electric vehicles; however, our business does not rely on it," Tesla said. The company said its sales in China, where it faces large tariffs, has risen without government incentives.
Tesla last week said it sold more than 22,000 cars world-wide -- either Model S sedans or Model X sport-utility vehicles -- in the second quarter, up 53% from a year earlier but short of analyst estimates and the 25,000 it sold in the first three months of 2017. The company said a battery-pack production shortfall affected deliveries.
Tesla's stock dropped sharply in the wake of last week's results, which fueled concerns among analysts and investors that demand for Tesla's current two models is weakening ahead of the launch of the Model 3, a $35,000 sedan. Chief Executive Elon Musk said on Twitter over the weekend that production of the Model 3 had started.
Buyers of Teslas and other electric vehicles in many markets benefit from government incentives. Tesla notes on its website that U.S. purchasers are eligible for a $7,500 federal income-tax credit, plus additional incentives in some states.
Norway has exempted electric vehicles from a range of charges, including import taxes, a 25% value-added tax and the purchase taxes that apply to gas-powered vehicles, according to Tesla. Those policies have helped make Norway, with a population of around 5 million, one of Tesla's biggest markets, ranking second in revenue in 2015 and third last year after the U.S. and China, according to the company.
Incentives vary elsewhere in Europe. Germany exempts electric vehicles from circulation taxes for a decade, while the U.K. exempts such vehicles from an annual circulation tax and full electric cars are exempt from a company car tax, according to the European Automobile Manufacturers' Association.
Tesla warns investors in securities filings that such incentives can change and says that "could have some impact on demand for our products and services."
Last year in Denmark, an incentive program expired and was replaced with a less generous one. New car-registrations for all-electric vehicles of all brands fell 70% in 2016 in the country to 1,373 vehicles, while across the European Union the number grew by 7% to 63,278 vehicles. In the first quarter of this year, only 48 all-electric vehicles were registered in Denmark.
The incentive policies can be controversial. During the Obama administration, Tesla received loans to encourage electric-vehicle development. Though it ultimately paid them back, critics have cited that assistance in arguing Tesla unfairly benefited from U.S. government help.
Mr. Musk has rejected such contentions, saying during an analyst call in May the notion that his company has survived because of government subsidies and tax credits "drives me crazy." Tesla says on balance, industry incentive structures still benefit traditional, combustion-engine vehicles.
Hong Kong, though relatively small, is a significant outpost of luxury-car buyers and trend setters. Its government had long waived its vehicle-registration tax for newly purchased electric automobiles, adding to the attractiveness of Tesla's cars.
The Hong Kong registrations data don't show actual sales figures but are a close proxy because new cars in Hong Kong must be registered to be driven.
In May, only five privately owned electric vehicles were registered, according to documents provided to district council members and viewed by the Journal.
The reversal in Hong Kong comes as Tesla is planning to expand in mainland China, the world's largest new-car market.
Dave Sullivan, an analyst for the consulting firm AutoPacific Inc., said the Hong Kong decline could foreshadow challenges for Tesla as a luxury brand in China.
"Hong Kong is the fashionable China," he said. "It's not exactly painting a glowing picture for the future of Tesla in China."
Credit: By Tim Higgins and Charles Rollet
Subject: Automobile industry; Tax incentives; Automobile sales; Electric vehicles
Location: China United States--US Hong Kong
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2017
Publication date: Jul 10, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1917285381
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1917285381?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or d istribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Readies for Model 3 Launch by Adding Hundreds of Repair Vans; The surge in cars predicted by the auto maker would likely tax its existing network of about 150 Tesla service centers
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: As Tesla Inc. begins a pivotal launch of its first mass-market car, the company said it plans to triple its capacity to repair vehicles, adding 1,400 technicians, dozens of new service centers and hundreds of maintenance vans that can be dispatched to an owner's home.
The Silicon Valley auto maker started production last week of the Model 3, a $35,000 sedan that Chief Executive Elon Musk is betting will boost Tesla's production to 500,000 vehicles next year from 84,000 last year. The surge of cars--coupled with any possible mechanical glitches that could arise with a new model--would likely tax a small network of about 150 Tesla service centers around the world.
Over the next 12 months, Tesla plans to add another 100 service centers world-wide, according to a company executive. But since most of the repairs are routine and can be done remotely, Tesla will expand its fleet of service vans by 350 this year from several dozen currently, the executive said. The new vans will come equipped with espresso machines and snacks for the customers.
Tesla is bracing for the most critical test in its 14-year history, as it aims to transform from a niche luxury player into a mainstream auto maker. The first 30 Model 3 cars will be handed over to customers by the end of July and Mr. Musk has said he is targeting monthly production of 20,000 by December.
The rollout of Tesla's Model X sport-utility vehicle was riddled with a number of mechanical malfunctions last year that underscored the challenges of the company's mass-market ambitions. Tesla moved quickly to resolve those new-model glitches.
Buyers of some of its vehicles have criticized Tesla for slow service.
In March, Jon McNeill, Tesla's sales and service president, posted a letter on an online Tesla user forum responding to complaints of long wait times to get vehicles fixed at third-party body shops. He promised to increase the number of Tesla-approved body shops by 300.
Tesla's vehicles include a wireless communications system that allows the company to diagnose 90% of maintenance problems remotely, indicating whether the car can be fixed in the field. Tesla estimates that its vans can service 80% of the issues, freeing up space in the service centers. Tesla charges customers the same amount remotely or in the shop.
Other auto makers are trying to improve the auto-service experience, long a pain point for many car owners. Ford Motor Co.'s Lincoln brand, for example, offers so-called Black Label Membership, which includes pickup and delivery of the owner's vehicle for all maintenance needs and a loaner vehicle.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Service centers; Customer services; Vehicles
People: Musk, Elon
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 11, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1917701672
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1917701672?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Car-Repair Capacity Is Tripled At Tesla
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 July 2017: B.2.
ProQuest document link
Abstract:
The rollout of Tesla's Model X sport-utility vehicle was riddled with a number of mechanical malfunctions last year that underscored the challenges of the company's mass-market ambitions. In March, Jon McNeill, Tesla's sales and service president, posted a letter on an online Tesla user forum responding to complaints of long...
Full text: As Tesla Inc. begins a pivotal launch of its first mass-market car, the company said it plans to triple its capacity to repair vehicles, adding 1,400 technicians, dozens of new service centers and hundreds of maintenance vans that can be dispatched to an owner's home.
The Silicon Valley auto maker started production last week of the Model 3, a $35,000 sedan that Chief Executive Elon Musk is betting will boost Tesla's production to 500,000 vehicles next year from 84,000 last year. The surge of cars -- coupled with any possible mechanical glitches that could arise with a new model -- would likely tax a small network of about 150 Tesla service centers around the world.
Over the next 12 months, Tesla plans to add an additional 100 service centers world-wide, according to a company executive. But since most of the repairs are routine and can be done remotely, Tesla will expand its fleet of service vans by 350 this year from several dozen currently, the executive said. The new vans will come equipped with espresso machines and snacks for customers.
Tesla is bracing forthe most critical test in its 14-year history, as it aims to transform itself from a niche luxury player into a mainstream auto maker. The first 30 Model 3 cars will be handed over to customers by the end of July, and Mr. Musk has said he is targeting monthly production of 20,000 by December.
The rollout of Tesla's Model X sport-utility vehicle was riddled with a number of mechanical malfunctions last year that underscored the challenges of the company's mass-market ambitions. Tesla moved quickly to resolve those new-model glitches.
Buyers of some of its vehicles have criticized Tesla for slow service.
In March, Jon McNeill, Tesla's sales and service president, posted a letter on an online Tesla user forum responding to complaints of long wait times to get vehicles fixed at third-party body shops. He promised to increase the number of Tesla-approved body shops by 300.
Tesla's vehicles include a wireless communications system that allows the company to diagnose 90% of maintenance problems remotely, indicating whether the car can be fixed in the field. Tesla estimates that its vans can service 80% of the issues, freeing up space in the service centers.
Credit: By Tim Higgins
Subject: Automobile industry; Service centers; Customer services; Vehicles
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2017
Publication date: Jul 12, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1917814752
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1917814752?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Elon Musk Lays Out Worst-Case Scenario for AI Threat; Powerful technology will threaten all human jobs, could even spark a war, Tesla CEO says
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Elon Musk warned a gathering of U.S. governors that they need to be concerned about the potential dangers from the rise of artificial intelligence and called for the creation of a regulatory body to guide development of the powerful technology.
Speaking Saturday at the National Governors Association meeting in Rhode Island, the chief executive of electric-car maker Tesla Inc. and rocket maker Space Exploration Technologies Corp. laid out several worst-case scenarios for AI, saying that the technology will threaten all human jobs and that an AI could even spark a war. "It is the biggest risk that we face as a civilization," he said.
Mr. Musk has been vocal about his concerns about AI and helped create OpenAI, a nonprofit research group that aims for the safe development of the technology
. He suggested to the governors that a regulatory agency needs to be formed to begin gaining insight into fast-moving AI development, followed by putting regulations into place.
"Right now the government doesn't even have insight," he said. "Once there is awareness people will be extremely afraid, as they should be."
Proponents of AI say such concerns are premature, given the current state of the technology. Arizona Gov. Doug Ducey, a Republican who said that he has spent his own career trying to reduce government regulations, questioned Mr. Musk over the suggestion of creating new rules, saying that he was unsure what policy makers could do beyond pushing for a slowdown in development. "I was surprised by your suggestion to bring regulations before we know what we are dealing with," Mr. Ducey said.
"For sure the companies doing AI--most of them, not mine--will squawk and say this is really going to stop innovation," Mr. Musk said. But he said he doubted that such a move would cause companies to leave the U.S.
During his talk, Mr. Musk also was asked about the pressures that come from the valuation of Tesla
, whose stock has risen more than 50% this year ahead of the introduction of a new sedan
. The market capitalization has made Tesla bigger than Ford Motor Co. and, at times, larger than General Motors Co.
Those auto makers, unlike Tesla, are profitable and sell many more vehicles than the niche luxury brand.
Mr. Musk reiterated that shares of Tesla are trading at a price "higher than we have any right to deserve" and that the high price reflects optimism over the company's future.
"Those expectations sometimes get out of control," he said. But Mr. Musk said he is committed to making Tesla a success. Besides selling shares to pay for taxes, Mr. Musk said he is avoiding selling company shares. "I'm going down with the ship," he said.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Google Gives Artificial Intelligence More Power in Its Products
(May 17)
* Artificial Intelligence Still Needs a Human Touch
(March 12)
* Mulling the Economic Effect of Artificial Intelligence
(Jan. 18)
Credit: By Tim Higgins
Subject: Automobile industry; Governors; Artificial intelligence
Location: United States--US Arizona Rhode Island
People: Ducey, Doug Musk, Elon
Company / organization: Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: OpenAI; NAICS: 541712; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999; Name: National Governors Association; NAICS: 813940; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 15, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1919184850
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1919184850?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-18
Database: The Wall Street Journal
Business News: Tesla Boss Warns on Artificial Intelligence
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 July 2017: B.3.
ProQuest document link
Abstract:
Elon Musk warned a gathering of U.S. governors that they need to be concerned about the potential dangers from the rise of artificial intelligence and called for the creation of a regulatory body to guide development of the powerful technology. Speaking Saturday at the National Governors Association meeting in Rhode...
Full text: Elon Musk warned a gathering of U.S. governors that they need to be concerned about the potential dangers from the rise of artificial intelligence and called for the creation of a regulatory body to guide development of the powerful technology.
Speaking Saturday at the National Governors Association meeting in Rhode Island, the chief executive of electric-car maker Tesla Inc. and rocket maker Space Exploration Technologies Corp. laid out several worst-case scenarios for AI, saying that the technology will threaten all human jobs and that an AI could even spark a war. "It is the biggest risk that we face as a civilization," he said.
Mr. Musk helped create OpenAI, a nonprofit research group that aims for the safe development of the technology. He suggested to the governors that a regulatory agency needs to be formed to gain insight into fast-moving AI development, followed by putting regulations into place.
"Right now the government doesn't even have insight," he said. "Once there is awareness people will be extremely afraid, as they should be."
Proponents of AI say such concerns are premature. Arizona Gov. Doug Ducey, a Republican, questioned Mr. Musk over the suggestion of new rules, saying that he was unsure what policy makers could do beyond pushing for a slowdown in development.
"For sure the companies doing AI -- most of them, not mine -- will squawk and say this is really going to stop innovation," Mr. Musk said. But he said he doubted that such a move would cause companies to leave the U.S.
(See related letters: "Letters to the Editor: Mr. Musk's Concerns About AI Are Mostly Unfounded" -- WSJ July 27, 2017)
Credit: By Tim Higgins
Subject: Governors; Artificial intelligence
Location: United States--US Arizona Rhode Island
People: Ducey, Doug
Company / organization: Name: Space Exploration Technologies Corp; NAICS: 336414; Name: OpenAI; NAICS: 541712; Name: Tesla Inc; NAICS: 336999; Name: National Governors Association; NAICS: 813940
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Jul 17, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1919400517
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1919400517?accounti d=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Names James Murdoch and Linda Johnson to Board of Directors; Silicon Valley auto maker has faced criticism from investors about lack of independent directors
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc., which has faced criticism from its investors about a lack of independent directors, named 21st Century Fox Inc. Chief Executive James Murdoch and Ebony Media CEO Linda Johnson Rice to its board.
The appointments announced Monday expands Tesla's board to nine people, including the Silicon Valley auto maker's CEO, Elon Musk.
Credit: By Tim Higgins
Subject: Automobile industry; Boards of directors; Corporate governance
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 17, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1919595671
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1919595671?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Tesla Adds Two Board Members
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 July 2017: B.3.
ProQuest document link
Abstract:
In April, Mr. Musk suggested Tesla would appoint two additional directors when he responded on Twitter to a group of investors, including the California State Teachers' Retirement System, that were calling for improved corporate governance. [...]Mr. Waizenegger raised concerns about Mr. Murdoch, citing his handling of the phone-hacking scandal at the U.K. newspaper unit of News Corp in 2011 when he was head of the international division, and more recently 21st Century Fox's controversy involving...
Full text: Tesla Inc., which has faced criticism from its investors about a lack of independent directors, named 21st Century Fox Inc. Chief Executive James Murdoch and Ebony Media CEO Linda Johnson Rice to its board.
The appointments announced Monday expand Tesla's board to nine people, including the Silicon Valley auto maker's CEO, Elon Musk.
In April, Mr. Musk suggested Tesla would appoint two additional directors when he responded on Twitter to a group of investors, including the California State Teachers' Retirement System, that were calling for improved corporate governance. Among the changes, the investors requested Tesla recruit two new directors who don't have prior personal or professional ties with Mr. Musk.
Mr. Murdoch is the son of Rupert Murdoch, executive chairman of Fox and News Corp, publisher of The Wall Street Journal. James Murdoch, who also serves on the board of News Corp and is the chairman of Sky PLC, succeeded his father as CEO of Fox in 2015.
Ms. Rice, who had been chairman emeritus of Ebony Media Holdings, returned to run the holding company that includes Ebony magazine earlier this year after selling the family-owned Johnson Publishing last year. She has been active on other boards, including as a director for Omnicom Group Inc. since 2000 and GrubHub Inc. She becomes Tesla's second female director.
Dieter Waizenegger, the executive director of CtW Investments Group, which signed the April letter and represents union-sponsored pension funds that own about 200,000 Tesla shares, welcomed Ms. Rice's appointment, saying it adds diversity to the board. But Mr. Waizenegger raised concerns about Mr. Murdoch, citing his handling of the phone-hacking scandal at the U.K. newspaper unit of News Corp in 2011 when he was head of the international division, and more recently 21st Century Fox's controversy involving sexual-harassment claims at the Fox News Channel.
Mr. Waizenegger said those issues mean Mr. Murdoch isn't an ideal candidate "for a board that really needs to prove that it wants to take up shareholder accountability several notches," he said.
While Mr. Murdoch faced questioning by a U.K. parliamentary committee in the phone-hacking scandal, he wasn't accused of any wrongdoing. Mr. Murdoch in 2011 called the phone-hacking "a matter of serious regret," and has said he didn't know about or try to hide any wrongdoing in the matter.
At 21st Century Fox, the company has replaced much of the management at Fox News, has hired more women and minorities including a head of diversity outreach and provided sensitivity training for all employees at the network.
A spokesman for Mr. Murdoch referred questions to the auto maker. Tesla declined to comment beyond its announcement Monday.
A representative from Calstrs didn't have immediate comment.
Three other pension funds that signed the letter to Tesla declined to comment or didn't respond to requests.
Credit: By Tim Higgins
Subject: Pension funds; Hackers; Directors; Corporate governance
Location: California United Kingdom--UK
Company / organization: Name: 21st Century Fox; NAICS: 515120; Name: GrubHub Inc; NAICS: 492210, 518210; Name: Omnicom Group Inc; NAICS: 541810, 541820; Name: News Corp; NAICS: 511110, 515120, 551112
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Jul 18, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1919623406
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1919623406?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Names James Murdoch and Linda Johnson Rice to Board of Directors; Silicon Valley auto maker has faced criticism from investors about lack of independent directors
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc., which has faced criticism from its investors about a lack of independent directors, named 21st Century Fox Inc. Chief Executive James Murdoch and Ebony Media CEO Linda Johnson Rice to its board.
The appointments announced Monday expand Tesla's board to nine people, including the Silicon Valley auto maker's CEO, Elon Musk.
In April, Mr. Musk suggested Tesla would appoint two additional directors when he responded on Twitter to a group of investors, including the California State Teachers' Retirement System, that were calling for improved corporate governance. Among the changes, the investors requested Tesla recruit two new directors who don't have prior personal or professional ties with Mr. Musk.
Mr. Murdoch is the son of Rupert Murdoch, executive chairman of Fox and News Corp, publisher of The Wall Street Journal. James Murdoch, who also serves on the board of News Corp and is the chairman of Sky PLC, succeeded his father as CEO of Fox in 2015.
Ms. Rice, who had been chairman emeritus of Ebony Media Holdings, returned to run the holding company that includes Ebony magazine earlier this year after selling the family-owned Johnson Publishing last year. She has been active on other boards, including as a director for Omnicom Group Inc. since 2000 and GrubHub Inc. She becomes Tesla's second female director.
Dieter Waizenegger, the executive director of CtW Investment Group, which signed the April letter and represents union-sponsored pension funds that own about 200,000 Tesla shares, welcomed Ms. Rice's appointment, saying it adds diversity to the board. But Mr. Waizenegger raised concerns about Mr. Murdoch, citing his handling of the phone-hacking scandal at the U.K. newspaper unit of News Corp in 2011 when he was head of the international division, and more recently 21st Century Fox's controversy involving sexual-harassment claims at the Fox News Channel.
Mr. Waizenegger said those issues mean Mr. Murdoch isn't an ideal candidate "for a board that really needs to prove that it wants to take up shareholder accountability several notches," he said.
While Mr. Murdoch faced questioning by a U.K. parliamentary committee in the phone-hacking scandal, he wasn't accused of any wrongdoing. Mr. Murdoch in 2011 called the phone-hacking "a matter of serious regret," and has said he didn't know about or try to hide any wrongdoing in the matter.
At 21st Century Fox, the company has replaced much of the management at Fox News, has hired more women and minorities including a head of diversity outreach and provided sensitivity training for all employees at the network.
A spokesman for Mr. Murdoch referred questions to the auto maker. Tesla declined to comment beyond its announcement Monday.
A representative from Calstrs didn't have immediate comment. The second largest pension fund owns about 248,000 shares, or 0.15% of Tesla, according to the latest data from CapIQ.
Three other pension funds that signed the letter to Tesla declined to comment or didn't respond to requests.
Besides Mr. Musk, who is chairman, Tesla's board includes his brother; a former top executive for SolarCity Corp., where Mr. Musk has served as chairman; two longtime venture-capital investors in Tesla; a private-equity investor and a telecommunications executive.
Mr. Musk is under intense scrutiny as he races to ramp up production of the Model 3, a new $35,000 sedan that he expects will fuel massive sales growth next year. He has projected Tesla will make a total of 500,000 vehicles in 2018, up from about 84,000 last year.
Enthusiasm for the Model 3 has sent shares soaring more than 50% this year, though the stock has fallen in the past few weeks--including 2.5% on Monday--following disappointing second-quarter sales figures. On Saturday, Mr. Musk told a group of U.S. governors that he believed the company's market value was greater than Tesla deserved.
On Monday, Mr. Musk clarified his comments on Saturday , tweeting: "Tesla stock is obviously high based on past & present, but low if you believe in Tesla's future. Place bets accordingly."
He also on Monday sought to put to rest news about a crash in Minnesota involving Tesla's semiautonomous Autopilot system. The driver of the 2016 Tesla car, which rolled over in a marsh, slightly injuring the four passengers, originally told police he engaged the car's semiautonomous system and the vehicle then suddenly accelerated. However, Mr. Musk posted an email he says is from the driver stating he believed he had disengaged Autopilot at the time of the crash. The driver couldn't immediately be reached for comment.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Appointments & personnel changes; Pension funds; Investments; Hackers; Corporate governance
Location: California United Kingdom--UK
Company / organization: Name: GrubHub Inc; NAICS: 492210, 518210; Name: 21st Century Fox; NAICS: 515120; Name: Omnicom Group Inc; NAICS: 541810, 541820; Name: News Corp; NAICS: 511110, 515120, 551112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 18, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1919644110
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1919644110?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
GM Eases Summer Production of Chevrolet Bolt; Electric vehicle is seeing lukewarm demand as Tesla ramps up production of cheaper Model 3
Author: Roberts, Adrienne
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Workers assembling General Motors Co.'s Tesla fighter are taking a month off this summer amid lukewarm demand, a sign American car buyers are showing little interest in vehicles that rely solely on battery power to get from Point A to B.
The Detroit auto giant's plant in Orion Township, Mich., began producing the Chevrolet Bolt late last year, with output hitting more than 15,000 vehicles before the company's typical summer shutdown at the start of July. That break usually spans two weeks, but workers at the Bolt plant--also building the slow-selling compact Chevrolet Sonic--remain on vacation the third week of the month as inventories of both cars climb.
A GM spokesman, saying the shutdown stems from the oversupply of Sonics, said workers will return to the Orion assembly line on Monday. However, they will take another one-week break in August.
The long layoff affecting the Bolt is unusual for a vehicle still considered to be in launch mode, and it delivers a blow to GM as Tesla Inc. is ramping up production of the Model 3 , which is priced lower than its Chevrolet counterpart while offering a similar driving range on a single charge. The $35,000 Model 3, Tesla's fourth model , already has amassed hundreds of thousands of reservations from potential buyers.
The $37,000 Bolt is struggling to drum up demand amid low gasoline prices. About 7,500 Bolts have been sold through June, though it is yet to go on sale in all 50 states.
Sales of the Bolt roughly match the Nissan Leaf, a lower-range electric car that has been available in the U.S. for several years.
Electric vehicles make up just 0.6% of U.S. auto market in 2017, according to Autotrader.com, as inadequate charging infrastructure, high costs and low gasoline prices have muted demand.
Haig Stoddard, an analyst with Wards.com, said the Bolt is a strong performer among the field of electric vehicles, but it is "not selling as strong as GM had hoped." Tesla represents nearly half of electric-vehicle sales in the U.S., Autotrader estimates.
"Obviously, GM has enough inventory of Bolts to accommodate sales if they're closing the plant," Autotrader.com analyst Michelle Krebs said. She said the car has gotten off to a "slow start...it's been an uphill battle."
The Bolt, under development for several years, helps the company meet tightening emissions standards, and buyers qualify for a $7,500 tax credit after the sale.
"Putting the Bolt into the market should be looked at as part of GM's R&D in electrification," Mr. Stoddard said. "GM and the rest of the industry are preparing for the long term."
Jim Cain, a GM spokesman, said the company has more than 100 days' supply of Bolt inventory on Chevrolet dealer lots (compared with an industry average of 74 days'), but that number is distorted by the fact only some Chevy dealers currently offer the car.
"By no stretch of the imagination are we overstocked," Mr. Cain said. "We have just built enough Bolt EVs to double the number of states where we sell to complete our nationwide rollout in August ahead of schedule."
The company's business plan differs from that of Tesla, whose automotive revenue derives solely from selling electric vehicles.
GM's overall market share is stuck in neutral, falling below 17% as its fuel-efficient car offerings slump and it reins in low-margin sales to rental car companies.
GM, highly dependent on light-truck sales for profit, has scrambled to manage rising inventories of slow-selling passenger cars, including conventional sedans. The auto maker is cutting jobs and slowing production at several of its passenger-car plants this year, including factories that make Chevrolet Malibu and Cadillac sedans.
The Bolt has been acclaimed as an affordable alternative to Tesla's popular Model S, which often sells for more than $100,000. Unlike Tesla, however, GM doesn't offer buyers a dedicated charging network, and the company is reliant on an independent dealer network to sell the car.
Adam Kraushaar, president of Lester Glenn Auto Group located about 50 miles south of New York City in New Jersey, said his Chevy dealership is too far from the city for the Bolt to attract many people living in the community, even with its 238-mile range on a charge. Initial demand for the Bolt at his dealership was strong, but then dropped off "fairly dramatically."
Although the car isn't "setting the world on fire," it isn't languishing, Mr. Kraushaar said.
Paul Masse, owner of Paul Masse Chevrolet in East Providence, R.I., thinks the Bolt will be a steady seller. Mr. Masse ordered 100 Bolts for his dealership, significantly more than GM was planning on sending him.
Customers often come in looking for a crossover wagon, but once he tells them about the Bolt's range, roominess and the little maintenance that is required, he said he can change opinions. Since receiving his first order of 100 Bolts at the end of May, he said he has sold 22.
"Once gas prices go up, you'll want a Bolt," Mr. Masse said. For now, he is offering a lease deal for zero dollars down and a payment of $249 a month.
John Stoll contributed to this article.
Write to Adrienne Roberts at Adrienne.Roberts@wsj.com
Credit: By Adrienne Roberts
Subject: Inventory; Automobile sales; Electric vehicles; Market shares; Gasoline prices
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 20, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1920408720
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1920408720?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Norway Pioneers Crewless Ships --- Domestic firms Yara and Kongsberg are developing a 'Tesla of the Seas' cargo vessel
Author: Paris, Costas
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 July 2017: B.4.
ProQuest document link
Abstract:
Two Norwegian companies are taking the lead in the race to build the world's first crewless, autonomously operated ship, an advance that could mark a turning point in seaborne trade. The vessel will cost $25 million, about three times as much as a conventional container ship of its size, but its backers say without need for fuel or crew it promises to cut annual operating costs by as much as 90%. "Even if some say...
Full text: OSLO -- Two Norwegian companies are taking the lead in the race to build the world's first crewless, autonomously operated ship, an advance that could mark a turning point in seaborne trade.
Dubbed by shipping executives the "Tesla of the Seas," the Yara Birkeland now under development is scheduled in late 2018 to start carrying fertilizer 37 miles down a fiord from a production facility to the port of Larvik. Using the Global Positioning System, radar, cameras and sensors it is designed to maneuver itself around other vessels and to dock on its own.
The vessel will cost $25 million, about three times as much as a conventional container ship of its size, but its backers say without need for fuel or crew it promises to cut annual operating costs by as much as 90%. The 100-container ship is scheduled to be in the water toward the end of next year, though initially it will be tested with a human at the controls.
The Birkeland is being jointly developed by agriculture firm Yara International ASA and Kongsberg Gruppen ASA, which builds guidance systems for civilian and military uses.
Petter Ostbo, Yara's head of production who leads the electric-ship project, said the company would look to invest in bigger ships and use them for longer routes once international regulations are in place for crewless vessels. "Maybe even move our fertilizer from Holland all the way to Brazil," he said.
The International Maritime Organization, which regulates maritime travel, doesn't expect legislation governing crewless ships to be in place before 2020.
Shipping executives say autonomous vessels will be popular for short sea routes, but doubt they will replace oceangoing ships that move thousands of containers across continents and have an average crew of around 25 people.
"It's not a matter of technology, which is already there, but a business case," said Lars Jensen, chief executive of SeaIntelligence Consulting in Copenhagen. "Autonomous ships are expensive to begin with, and have to be built very robust, because if they break down, the cost of getting a team to fix them in the middle of the ocean will be very high."
In addition to reducing fuel and labor costs, the Birkeland project is being pitched as a way to cut emissions. The ship is expected to replace 40,000 truck journeys a year through urban areas in southern Norway, the companies say.
Ship operators increasingly are being asked to introduce cleaner fuels when sailing close to populated coastal areas, especially in the U.S. and Europe.
"We want to go zero emission," said Mr. Ostbo. "Even if some say climate change is not reality, it's a business reality because clean sources of energy are more affordable than fossil fuels."
The Birkeland will become autonomous in stages. At first, a single container will be used as a manned bridge on board. Then the bridge will be moved to shore and become a remote-operations center. The ship will eventually run fully on its own, under supervision from shore, in 2020.
"When the bridge goes on land, it will be something like flying a drone from a command center," said Kongsberg's chief executive, Geir Haoy. "It will be GPS navigation and lots of high-tech cameras to see what's going on around the ship."
The Norwegians aren't alone in looking into autonomous shipping. British manufacturer Rolls-Royce Holding PLC is investing in similar technology and plans to launch robotic ships by 2020. The first vessels will likely be tugboats and ferries, with cargo ships that can sail through international waters to follow.
"Once the regulation is in place, I can see this spreading fast," Mr. Haoy said.
Credit: By Costas Paris
Subject: Global positioning systems--GPS; Container ships; Automation; Shipping industry
Location: Norway
Company / organization: Name: International Maritime Organization; NAICS: 926120; Name: Yara International ASA; NAICS: 325311; Name: Kongsberg Gruppen ASA; NAICS: 334511
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2017
Publication date: Jul 24, 2017
column: Industry Focus
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1922366153
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1922366153?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Model 3 Arrives as Elon Musk Tries to Manage Expectations; Reservations for $35,000 all-electric compact car soared to almost 400,000 after its March 2016 unveiling
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. Chief Executive Elon Musk plans Friday evening to showcase the first deliveries of the sedan he hopes will help transform the Silicon Valley niche car company into a more mass-market maker.
The billionaire entrepreneur is set to take the stage at Tesla's Fremont, Calif., factory to hand over the keys to the first Model 3s. Production of the all-electric, four-door compact--which sells for $35,000, about half the cost of the cheapest Tesla now on the market--began earlier this month.
Mr. Musk, famous for his showmanship, plans to broadcast Friday's event live on Tesla's website. The first cars are headed to Tesla employees who bought them, according to Musk, who will get the first one.
Excitement for the car and for Mr. Musk's vision of personal transportation has helped Tesla shares soar more than 50% this year, lifting its market value past that of
Ford Co., and Friday is "key to maintaining hype," Colin Langan, an analyst for UBS, told investors this week in a note.
"Expectations are high; therefore positive media reaction to the production vehicle is important," he said.
But Mr. Musk must walk a fine line in marketing the Model 3: stoking excitement without drawing customers away from the more expensive Model S sedan and Model X sport-utility vehicle
. Second-quarter sales fell short of analysts' expectations, fueling concerns that demand for those models was softening
.
The Model 3's arrival represents a potential inflection point for the automotive industry. Car makers long have talked about electrification, but haven't captured the popular attention of customers as Tesla has in 14 years.
"If it's successful--in terms of volume and attracting mainstream buyers as promised--it could be the breakthrough we need to, at least, have wider traction for electric vehicles," said Michelle Krebs, an analyst for Autotrader. "But there's a big challenge:...They've got to launch it flawlessly and build it in high volume flawlessly and deliver what they promised."
Tesla's rise, along with regulatory pressure and government incentives, has pushed traditional auto makers' electric-vehicle programs. Volvo earlier this month announced that by 2019 all its new models will be either hybrid or full electric
. General Motors Co., Toyota Motor Corp., Volkswagen AG and Daimler AG plan to sell millions of electric vehicles by 2025.
After the Model 3 was unveiled in March 2016, reservations soared
to almost 400,000, according to Tesla. The company has since stopped saying how many people have put down $1,000 to be on the list to buy the vehicle. Mr. Musk reiterated this month that customers ordering a Model 3 now will receive it late next year.
Investors and customers will be looking Friday for more information on several issues, including when the company will begin taking order configurations online. Mr. Musk had previously cautioned that options initially will be limited to the likes of color and wheel size, with more to come later.
The company brought out the Model X with too many options, he told shareholders in June, and is trying to learn from its struggles then.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Financial performance; Electric vehicles
People: Musk, Elon
Company / organization: Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930; Name: Volkswagen AG; NAICS: 336111, 336390; Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Daimler AG; NAICS: 336111; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (On line); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 28, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1923945507
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1923945507?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-18
Database: The Wall Street Journal
Tesla Model 3 Arrives as Elon Musk Warns of 'Manufacturing Hell'; Next few months could be bumpy as production ramps up toward goal of 10,000 vehicles a week
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: FREMONT, Calif.--Tesla Inc. Chief Executive Elon Musk on Friday revealed new pricing tiers, battery range and other details of the all-electric Model 3 sedan
that he hopes will help transform the Silicon Valley niche-car company into a more mass-market maker.
The four-door sedan will start at $35,000, as promised, but will also be offered in a $44,000 version that has a range of up to 310 miles between charges, 90 miles more than the base model and higher than the all-electric Chevrolet Bolt's 238-mile range
. The prices exclude any federal tax credits.
Tesla has received more than 500,000 reservations for the Model 3, Mr. Musk told reporters at the auto maker's factory in Fremont.
He reiterated that he believes the company can build 10,000 vehicles a week, or 500,000 a year, by the end of next year and cautioned that the next few months could be bumpy as the car maker ramps up production. The first production model of the Model 3 began earlier this month.
"It's an amazing car, but we're going to go through at least six months of manufacturing hell," Mr. Musk said.
He stressed that any trouble with getting parts from suppliers could delay his plans. Tesla has a history of missing production goals.
Later in the evening, during a live-streamed event outside the Fremont factory, Mr. Musk showcased the first deliveries of the sedan to employee customers, who will help identify any glitches as they drive the automobile. Deliveries of the first vehicles to nonemployee buyers may begin in September or October, according to Tesla.
Tesla revealed that the base Model 3 has a 220-mile range and can accelerate from zero to 60 miles per hour in 5.6 seconds, according to Tesla. The more expensive version can reach 60 mph in 5.1 seconds. For an additional $5,000, customers can add premium features including a nicer interior, a glass roof and a more powerful speaker system.
Excitement for the car and for Mr. Musk's vision of personal transportation has helped Tesla shares soar more than 50% this year, lifting its market value past that of
Ford Motor Co., and Friday is "key to maintaining hype," Colin Langan, an analyst for UBS, told investors this week in a note.
"Expectations are high; therefore positive media reaction to the production vehicle is important," he said.
But Mr. Musk must walk a fine line in marketing the Model 3: stoking excitement without drawing customers away from the more expensive Model S sedan and Model X sport-utility vehicle
. Second-quarter sales fell short of analysts' expectations, fueling concerns that demand for those models was softening
.
The Model 3's arrival represents a potential inflection point for the automotive industry. Car makers long have talked about electrification but haven't captured the popular attention of customers as Tesla has in 14 years.
"If it's successful--in terms of volume and attracting mainstream buyers as promised--it could be the breakthrough we need to, at least, have wider traction for electric vehicles," said Michelle Krebs, an analyst for Autotrader. "But there's a big challenge...They've got to launch it flawlessly and build it in high volume flawlessly and deliver what they promised."
Tesla's rise, along with regulatory pressure and government incentives, has pushed traditional auto makers' electric-vehicle programs. Volvo earlier this month said that by 2019 all its new models will be either hybrid or full electric
. General Motors Co., Toyota Motor Corp., Volkswagen AG and Daimler AG plan to sell millions of electric vehicles by 2025.
After the Model 3 was unveiled in March 2016, reservations soared
to almost 400,000, according to Tesla. Until Friday, the company had stopped saying how many people have put down $1,000 to be on the list to buy the vehicle. Mr. Musk reiterated that customers ordering a Model 3 now will receive it late next year.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Tesla Model 3 Test Drive: Car Has Bite and Simple Interior
* Heard on the Street: Tesla's Big Reveal Shows a Rough Road Ahead
Credit: By Tim Higgins
Subject: Automobile industry; Product design; Electric vehicles
People: Musk, Elon
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 29, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1924183325
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1924183325?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-17
Database: The Wall Street Journal
Tesla Model 3 Test Drive: Car Has Bite and Simple Interior; The $35,000 sedan has bare-bones interior, with a 15-inch video screen to control most functions
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Fremont, Calif.--A first peek inside Tesla Inc.'s new Model 3 compact car revealed a starker, cozier interior than the more spacious and luxurious Model S. But as the sedan sped off, the experience felt similar.
On Friday, the Silicon Valley auto maker showed off details of the all-electric sedan's interior for the first time, allowing brief test rides with a roughly 10-minute spin around the factory.
The Model 3 represents a milestone for Chief Executive Elon Musk, who has long wanted to create an electric car for the masses. He's betting the new vehicle can help fuel massive growth for his 14-year-old company, projecting Tesla will produce a half-million cars next year, after delivering about 76,000 Model S sedans and Model X sport-utility vehicles last year.
The Model 3's exterior was revealed in March last year, but details about the interior have been scarce.
The $35,000 sedan is noticeably bare bones inside--gone are the displays and instrument panel behind the steering wheel and the numerous switches and buttons found in the cockpit of traditional cars. Instead, the Model 3 makes greater use of a video screen in the center dash that controls most of the car's functions.
"We've intentionally gone for a very simple interior," Mr. Musk told reporters Friday at the factory.
Buttons on the steering wheel--coordinated with the 15-inch dash screen--allowed for adjustments of the side-view mirrors and steering wheel. Instead of traditional air vents, the Model 3's system directs air flow using vertical and horizontal air streams. Those streams run the length of the dash and can be directed in various configurations by tapping the video screen.
"The engineering and the design teams worked together very hard to make a simple economical interior that's simple and elegant--it's not just deleting a bunch of stuff," Doug Field, senior vice president of engineering, told reporters.
By removing and consolidating buttons, Tesla says it was able to find savings to devote money to other areas, such as providing a base battery pack capable of going 220 miles on one charge. A longer-range version offers up to 310 miles.
The drive felt similar to the Model S, humming quietly and starting quickly from a standstill.
Tesla said the base $35,000 Model 3's top speed is 130 miles an hour, while the $44,000 version can reach 140 mph. The test drive didn't provide that opportunity, but the vehicle's acceleration was evident. The more expensive version can go from zero to 60 mph in 5.1 seconds, according to Tesla.
Increasingly, luxury electric-car makers have emphasized acceleration off the line as a bragging point. Tesla has celebrated the top-end Model S's 2.28 second zero-to-60 timing.
Buyers could pay up to $59,500 if they were to buy the long-range Model 3 model with a slew of options, including $5,000 for a premium package of extras such as a glass roof and high-end speaker system; $5,000 for an enhanced, semiautonomous Autopilot system; $3,000 for the fully autonomous feature once it is eventually enabled; $1,500 for larger wheels; and $1,000 for a color other than the standard black.
But the test drive wasn't free of glitches, underscoring why Tesla is delivering the first Model 3 batches to employees. The test sedan wouldn't slip into drive from park and needed to be reset, similar to rebooting a computer.
Deliveries of Model 3 vehicles to non-Tesla employees are slated for September or October, according to the company.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Tesla Model 3 Arrives as Elon Musk Warns of 'Manufacturing Hell'
* Heard on the Street: Tesla's Big Reveal Shows a Rough Road Ahead
Credit: By Tim Higgins
Subject: Automobile industry; Product design; Electric vehicles
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 29, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1924187665
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1924187665?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla's Big Reveal Shows a Rough Road Ahead; Tesla's new Model 3 will struggle to live up to Elon Musk's mass-market hype
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: The Model 3, Tesla Inc.'s mass market electric sedan, arrived with great fanfare on Friday evening. Investors probably shouldn't bet on a similar reaction in the stock market.
Tesla delivered the first 30 of the sedans and says it will begin selling a vehicle with 220 miles of range that starts at $35,000 this fall. The version available to those with less patience is a premium one with 310 miles of range and a $44,000 starting price tag. Chief executive officer Elon Musk told reporters that the company has more than 500,000 deposits of $1,000 each for the Model 3. Deposits are fully refundable and don't specify which version.
Converting deposits by would-be early adopters into true sales will force the company to navigate
myriad issues that could crimp both the supply of and demand for its cars. On the supply part of the equation, Mr. Musk said Friday the company would be in "production hell" for at least six months, "maybe longer."
Meanwhile, a slew of fresh competition from major auto makers isn't far behind. The long-planned Model 3 comes to market just as some legacy auto makers are moving away from sedans in favor of bigger cars with higher operating margins. Tellingly, Mr. Musk encouraged potential customers to buy a higher-priced Model S or X vehicle because those purchases "help make the Model 3 possible."
Analysts at Edmunds.com estimate that Tesla is about 80,000 cars away from hitting the threshold at which U.S. manufacturer tax credits begin phasing out. Customers counting on a $7,500 rebate from the sticker price might not get their car in time to snag that incentive and be forced to shell out significantly more for their purchase. The subsidy is manufacturer-specific, so some competitors can enjoy it after Tesla's advantage fades.
Tesla shares trade at more than 60 times 2019 consensus earnings per share and have risen by about half just this year. That is frothy even if teething problems don't derail sentiment. Of course that multiple can go higher still, at least for a while, if the Model 3 lives up to the faithful's expectations in coming months. Now that the rubber finally has hit the road, though, Tesla's promises will have to mesh with commercial reality.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Earnings per share
Location: United States--US
People: Musk, Elon
Company / organization: Name: Edmunds.com; NAICS: 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 29, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1924192874
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1924192874?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Model 3 Test Drive: Car Has Bite and Simple Interior; The $35,000 sedan has bare-bones interior, with a 15-inch video screen to control most functions
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: FREMONT, Calif.--A first peek inside Tesla Inc.'s new Model 3 compact car revealed a starker, cozier interior than the more spacious and luxurious Model S. But as the sedan sped off, the experience felt similar.
On Friday, the Silicon Valley auto maker showed off details of the all-electric sedan's interior for the first time, allowing a roughly 10-minute test ride around the factory.
The Model 3 represents a milestone for Chief Executive Elon Musk, who has long wanted to create an electric car for the masses. He is betting the new vehicle can help fuel massive growth for his 14-year-old company, projecting Tesla will produce a half-million cars next year, after delivering about 76,000 Model S sedans and Model X sport-utility vehicles last year.
The Model 3's exterior was revealed in March last year, but details about the interior have been scarce.
The $35,000 sedan is noticeably bare-bones inside--gone are the displays and instrument panel behind the steering wheel and the numerous switches and buttons found in the cockpit of traditional cars. Instead, the Model 3 makes greater use of a video screen in the center dash that controls most of the car's functions.
"We've intentionally gone for a very simple interior," Mr. Musk told reporters Friday at the factory.
Buttons on the steering wheel--coordinated with the 15-inch dash screen--allowed for adjustments of the side-view mirrors and steering wheel. Instead of traditional air vents, the Model 3's system directs air flow using vertical and horizontal air streams. Those streams run the length of the dash and can be directed in various configurations by tapping the video screen.
"The engineering and the design teams worked together very hard to make a simple economical interior that's simple and elegant--it's not just deleting a bunch of stuff," Doug Field, senior vice president of engineering, told reporters.
By removing and consolidating buttons, Tesla said it was able to find savings to devote money to other areas, such as providing a base battery pack capable of going 220 miles on one charge. A longer-range version offers up to 310 miles.
The drive felt similar to the Model S, humming quietly and starting quickly from a standstill.
Tesla said the base $35,000 Model 3's top speed is 130 miles an hour, while the $44,000 version can reach 140 mph. The test drive didn't provide that opportunity, but the vehicle's acceleration was evident. The more expensive version can go from zero to 60 mph in 5.1 seconds, according to Tesla.
Increasingly, luxury electric-car makers have emphasized acceleration off the line as a bragging point. Tesla has celebrated the top-end Model S's 2.28-second zero-to-60 timing.
Buyers could pay as much as $59,500 if they were to buy the long-range Model 3 model with a slew of options, including $5,000 for a premium package of extras such as a glass roof and high-end speaker system; $5,000 for an enhanced, semiautonomous Autopilot system; $3,000 for the fully autonomous feature once it is eventually enabled; $1,500 for larger wheels; and $1,000 for a color other than the standard black.
But the test drive wasn't free of glitches, underscoring why Tesla is delivering the first Model 3 batches to employees. On two occasions while the car was stopped, the test sedan wouldn't shift from drive into park.
A senior Tesla executive sitting in the passenger seat during the test drive said at the time the problem was software-related and not the driver's fault. The executive decided the solution in both cases was to reset the vehicle, similar to rebooting a computer.
On Saturday, a Tesla spokesman said the company reviewed the computer logs of the trip and blamed the driver for the error in both cases. The spokesman said the car's computer logs showed the parking button, which is part of the shifter paddle near the right side of the steering wheel, was pressed during the act of shifting and negated the effort.
Tesla isn't alone in trying declutter the cockpit of buttons and switches. Other auto makers have tried to as well but faced backlash from consumer complaints about confusing user interfaces.
Deliveries of Model 3 vehicles to non-Tesla employees are slated for September or October, according to the company.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Tesla Model 3 Arrives as Elon Musk Warns of 'Manufacturing Hell'
* Heard on the Street: Tesla's Big Reveal Shows a Rough Road Ahead
Credit: By Tim Higgins
Subject: Automobile industry; Product design; Buttons; Electric vehicles
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 30, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1924297709
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1924297709?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journ al
Global Marketing Company Joins Tesla in Red Hook; LIVWRK and David Brecher of FM Capital have lured Stink Studios from Dumbo to a converted industrial building in another Brooklyn neighborhood
Author: Morris, Keiko
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 July 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: The partners behind the conversion of an industrial building in the Red Hook section of Brooklyn are adding a global, digital-marketing firm to a tenant roster that includes Tesla Inc.
LIVWRK and David Brecher of FM Capital have lured Stink Studios to the team's overhaul of the former ship-engine repair building at 160 Van Brunt St., where Tesla has an office and showroom, according to Asher Abehsera, chief executive of LIVWRK.
Italian bakery Princi, which is owned by Starbucks Corp., is building out a store in the 119,000 square-foot building, purchased for $21.5 million in 2014. So far 89,000 square feet has been leased, Mr. Abehsera said.
LIVWRK's other notable Brooklyn projects include the 1.2 million-square-foot redevelopment of industrial buildings called Dumbo Heights. The company is partners with Kushner Cos. and RFR Holding on the Dumbo Heights development.
Stink would double the size of its current Dumbo office, taking 13,000 square feet in Red Hook. The company is slated to build out a production studio on the premises where it could shoot marketing content, said Chris Mele, Stink managing director. The new space also would have editing and voice-over recording facilities, he said.
Stink, which has expanded rapidly, was looking for a location that would provide both a "calming presence and inspirational presence" for its staff, Mr. Mele said.
"As much as we like Dumbo, it's starting to feel a little hectic," he said. "What we like about Red Hook is that it's got a very neighborhood kind of feel, and it feels like it does move at its own pace."
Credit: By Keiko Morris
Subject: Industrial space
Company / organization: Name: Starbucks Corp; NAICS: 722515; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Jul 30, 2017
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1924373572
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1924373572?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Rolls Out New Model 3 Sedan
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]31 July 2017: B.5.
ProQuest document link
Abstract:
Tesla Inc. Chief Executive Elon Musk on Friday disclosed new pricing tiers, battery range and other details of the all-electric Model 3 sedan that he hopes will help transform the Silicon Valley niche car maker into a more mass-market company. The prices exclude any federal tax credits in the U.S. Tesla has received more than 500,000 reservations for the Model 3, Mr. Musk told reporters at the auto maker's factory in Fremont. Excitement for the car and for Mr. Musk's vision of personal transportation has helped Tesla shares soar more than 50% this year, lifting its market value past that of Ford Motor Co., and Friday is "key to maintaining hype," Colin Langan, an analyst for UBS, told investors this week in a note. [...]quarter sales fell short of analysts' expectations, fueling concerns that demand for those models was softening.
Full text: FREMONT, Calif. -- Tesla Inc. Chief Executive Elon Musk on Friday disclosed new pricing tiers, battery range and other details of the all-electric Model 3 sedan that he hopes will help transform the Silicon Valley niche car maker into a more mass-market company.
The four-door sedan will start at $35,000, as promised, but will also be offered in a $44,000 version that has a range of as much as 310 miles between charges, 90 miles more than the base model and higher than the all-electric Chevrolet Bolts 238-mile range.
The prices exclude any federal tax credits in the U.S.
Tesla has received more than 500,000 reservations for the Model 3, Mr. Musk told reporters at the auto maker's factory in Fremont.
He reiterated that he believes the company can build 10,000 vehicles a week, or 500,000 a year, by the end of next year and cautioned that the next few months could be bumpy as the car maker ramps up production. Production of the Model 3 began earlier this month.
Later in the evening, during a live-streamed event outside the Fremont factory, Mr. Musk showcased the first deliveries of the sedan to employee customers, who will help identify any glitches as they drive the automobile.
Deliveries of the first vehicles to nonemployee purchases might begin in September or October, according to the auto maker.
Tesla revealed that the base Model 3 has a 220-mile range and can accelerate from zero to 60 miles an hour in 5.6 seconds, according to Tesla. The more expensive version can reach 60 mph in 5.1 seconds. For an additional $5,000, customers can add premium features including a nicer interior, a glass roof and a more powerful speaker system.
Excitement for the car and for Mr. Musk's vision of personal transportation has helped Tesla shares soar more than 50% this year, lifting its market value past that of Ford Motor Co., and Friday is "key to maintaining hype," Colin Langan, an analyst for UBS, told investors this week in a note.
"Expectations are high; therefore positive media reaction to the production vehicle is important," he said.
But Mr. Musk must walk a fine line in marketing the Model 3: stoking excitement without drawing customers away from the more expensive Model S sedan and Model X sport-utility vehicle. Second-quarter sales fell short of analysts' expectations, fueling concerns that demand for those models was softening.
The Model 3's arrival represents a potential inflection point for the automotive industry.
Car makers long have talked about electrification but haven't captured the popular attention of customers as Tesla has in 14 years.
"If it's successful -- in terms of volume and attracting mainstream buyers as promised -- it could be the breakthrough we need to, at least, have wider traction for electric vehicles," said Michelle Krebs, an analyst for Autotrader. "But there's a big challenge. . .They've got to launch it flawlessly and build it in high volume flawlessly and deliver what they promised."
---
An Early Look Inside
Of Tesla's Model 3
FREMONT, Calif. -- A first peek inside Tesla Inc.'s new Model 3 compact car revealed a starker, cozier interior than the more spacious and luxurious Model S. But as the sedan sped off, the experience felt similar.
On Friday, the Silicon Valley auto maker showed off details of the all-electric sedan's interior for the first time, allowing a roughly 10-minute test ride around the factory.
The Model 3 represents a milestone for Chief Executive Elon Musk, who has long wanted to create an electric car for the masses. He is betting the new vehicle can help fuel massive growth for his 14-year-old company, projecting Tesla will produce a half-million cars next year, after delivering about 76,000 Model S sedans and Model X sport-utility vehicles last year.
The Model 3's exterior was revealed in March last year, but details about the interior have been scarce.
The $35,000 sedan is noticeably bare-bones inside -- gone are the displays and instrument panel behind the steering wheel and the numerous switches and buttons found in the cockpit of traditional cars. Instead, the Model 3 makes greater use of a video screen in the center dash that controls most of the car's functions.
"We've intentionally gone for a very simple interior," Mr. Musk told reporters Friday at the factory.
Buttons on the steering wheel -- coordinated with the 15-inch dash screen -- allowed for adjustments of the side-view mirrors and steering wheel. Instead of traditional air vents, the Model 3's system directs air flow using vertical and horizontal air streams. Those streams run the length of the dash and can be directed in various configurations by tapping the video screen.
"The engineering and the design teams worked together very hard to make a simple economical interior that's simple and elegant -- it's not just deleting a bunch of stuff," Doug Field, senior vice president of engineering, told reporters.
By removing and consolidating buttons, Tesla said it was able to find savings to devote money to other areas, suchas providing a base battery pack capable of going 220 miles on one charge. A longer-range version offers up to 310 miles.
The drive felt similar to the Model S, humming quietly and starting quickly from a standstill.
Credit: By Tim Higgins
Subject: Automobile industry; Product design; Electric vehicles
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2017
Publication date: Jul 31, 2017
Section: Media & Marke ting
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1924491551
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1924491551?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
VW CEO Has Skeptics -- His Own Managers --- Matthias Mueller wants the world's top auto maker to embrace world of Uber and Tesla
Author: Boston, William
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Aug 2017: A.1.
ProQuest document link
Abstract:
Matthias Mueller was appointed as chief executive of Volkswagen AG, the world's No. 1 auto maker, to clean up after its emissions scandal and drag it into the modern world of electric and self-driving cars. The European Union's top antitrust regulator last month confirmed that, after a 2016 tip from VW, it has been investigating whether VW, BMW AG and Daimler AG violated antitrust rules through collaboration on diesel emissions and other technology going back more than 20 years. If VW's passenger-car business can't reorient toward new technologies by 2020, says one senior executive, "the Volkswagen brand will be dead meat." VW has teamed up with BMW, Daimler and Ford Motor Co. to build a pan-European electric car-charging network and is jointly developing artificial-intelligence applications with Nvidia Corp. He has pushed VW into app-based businesses, such as an Uber-like ride-hailing service, and plans to launch a new generation of electric self-driving vehicles in 2020. Behind Mr. Mueller's push in app-based businesses is also the notion, growing in the auto industry, that data-heavy applications may create revenue streams inside the car -- location-based services, for example, that steer drivers to hotels or restaurants. A 2016 McKinsey study projected shared-mobility and data services could create up to $1.5 trillion in additional revenue for the auto industry by 2030. To capture this new revenue, analysts say, auto makers need to develop digital technology and business models or risk seeing technology companies like Google fill the gap.
Full text: WOLFSBURG, Germany -- Matthias Mueller was appointed as chief executive of Volkswagen AG, the world's No. 1 auto maker, to clean up after its emissions scandal and drag it into the modern world of electric and self-driving cars.
He has been buffeted by a formidable counterforce -- VW's own managers, many of whom still yearn for the old autocratic corporate culture and remain skeptical of moves to downgrade the business of cars powered by fossil fuels.
"There are definitely people who are longing for the old top-down leadership," Mr. Mueller, 63, told an industry gathering in Germany in May, speaking of the corporate culture he inherited. "I don't know if you can imagine how difficult it is to change their mind-set."
That mind-set, people inside and outside the company say, included a conviction among many at VW that the internal-combustion engine, especially the diesel, is a proven and superior technology that can meet emission standards for years. That conviction, they say, helped lead engineers to rig diesel-engine software to appear to meet such standards, the crux of the scandal, which broke open in 2015.
It also left VW dragging its feet in electric vehicles and created internal skepticism about new ways customers were using cars -- ride-hailing services such as Uber Technologies Inc., car-sharing business like Zipcar Inc. and apps that help steer drivers to businesses and services.
Almost immediately after taking over in September 2015, Mr. Mueller presented a plan to move beyond VW's huge business in diesel and gasoline vehicles and generate at least 25% of sales from electric cars. He argued VW needed to create a "significant share of revenue" from apps and services.
"What are you doing?" demanded one angry executive during a meeting of top managers last fall, referring to the CEO's stress on shifting beyond conventional vehicles, according to people present. "You are driving the nails into our own coffin."
Such exchanges have been frequent and continue to this day, say some company insiders.
VW, which owns brands such as VW, Audi, Porsche, Skoda, Seat and Bentley, is facing a perilous moment. Its emissions-tampering scandal, which has cost it nearly $25 billion in fines, penalties and customer compensation, has been followed by a market-share erosion in its core European markets.
VW declined to make Mr. Mueller available for interviews, directing inquiries to his public statements. "Volkswagen must change," he said in the May meeting, "because our industry is going to change more deeply in the coming 10 years than in the 100 years before."
As Mr. Mueller tries to move VW beyond the diesel debacle, it continues to haunt him. The European Union's top antitrust regulator last month confirmed that, after a 2016 tip from VW, it has been investigating whether VW, BMW AG and Daimler AG violated antitrust rules through collaboration on diesel emissions and other technology going back more than 20 years. Volkswagen declined to comment on the substance of any antitrust investigation. BMW denied any collusion. Daimler declined to comment.
Later last month, the German government said it found illegal software that manipulated emissions on Porsche's Cayenne and ordered a recall. Porsche said it alerted German authorities to the issue and is cooperating with them. A Porsche spokesman said Audi, as the engine's manufacturer, was responsible. Audi and VW declined to comment on the recall.
Shareholders are largely supportive of Mr. Mueller's efforts but say VW has lost precious time. "This shift to electric and digital mobility services is the right thing to do, but it comes five or six years too late," says Ingo Speich, a fund manager at Union Investment, a VW shareholder. "Volkswagen has lost any first-mover advantage because they kept clinging to the old way of doing things."
Mr. Mueller has support from some VW executives who agree on the urgency. If VW's passenger-car business can't reorient toward new technologies by 2020, says one senior executive, "the Volkswagen brand will be dead meat."
Mr. Mueller's first steps came almost immediately. So did the backlash.
Three weeks after his promotion, he met secretly with Johann Jungwirth, one of Apple Inc.'s top car-project engineers. Mr. Mueller peppered him with questions about automotive efforts by U.S. tech giants such as Apple, Uber and Alphabet Inc.'s Google and the threat they posed. After talking for an hour, recalls Mr. Jungwirth, Mr. Mueller posed a final question: "When can you start?"
Two weeks later, Mr. Jungwirth was at VW headquarters, preaching the digital gospel and "getting on a lot of people's nerves," according to one executive. A person close to Mr. Mueller says he has repeatedly defended Mr. Jungwirth in front of skeptical colleagues.
Mr. Mueller's challenge is to win over VW's more-than-600,000 employees at a company that last year sold 10.4 million vehicles, more than any other single company, generating 217 billion euros ($237 billion) in revenue.
In new executive appointments, people close to him say, he has sometimes passed over a generation of executives to bring in outsiders and tech-savvy executives. He has jettisoned the idea prevalent at VW that it had to make most everything itself, entering partnerships to develop critical technologies. VW has teamed up with BMW, Daimler and Ford Motor Co. to build a pan-European electric car-charging network and is jointly developing artificial-intelligence applications with Nvidia Corp.
He has pushed VW into app-based businesses, such as an Uber-like ride-hailing service, and plans to launch a new generation of electric self-driving vehicles in 2020. VW has said it is tripling its investment in developing electric vehicles to $10 billion through 2025.
Mr. Mueller is also pushing to overhaul some of VW's traditional businesses -- and facing backlash there, too.
When Herbert Diess, CEO of the VW brand, last year pushed for big productivity gains at the unit, the IG Metall labor union reacted vehemently. Mr. Mueller intervened and scaled back targeted gains.
When Mr. Diess took the stage in a February assembly of VW-unit workers, thousands turned their backs in protest of job cuts and productivity-gain targets. A week later at a meeting of the board of Volkswagen, the parent company, half of the 20-member body -- those representing workers -- walked out to protest Mr. Diess' pursuit of cost cuts, say people familiar with the meeting. Mr. Diess says unions hold excessive influence.
The seeds of VW's emissions scandal were sowed about a decade ago, when the U.S. was drafting new emissions rules. Some car makers began to develop electric vehicles and hybrids. U.S. environmental officials urged VW to develop hybrids as Toyota did.
Under VW's then-chairman Ferdinand Piech and then-CEO Martin Winterkorn, the company instead pushed to come up with a diesel engine that would meet U.S. emissions targets. When the engineers failed, VW has said, they rigged the engines to cheat on emissions tests.
A lawyer for Mr. Winterkorn didn't respond to requests for comment. Mr. Piech couldn't be reached, and his lawyer didn't respond to requests for comment.
When Mr. Mueller ascended to the top job, VW's obsession with diesel engines had left it lagging behind in electric vehicles, which it needs to meet European carbon-dioxide-emissions targets in 2020, company executives say.
VW sold 63,392 plug-in vehicles in 2016, achieving an 8.2% share of global plug-in passenger-car sales of 775,417, according to EV-Volumes, a research group. Mr. Mueller in March unveiled plans to launch 30 new electric-vehicle models over coming years across all its brands.
The company is developing a new family of electric cars, named I.D. A prototype unveiled at the Paris auto show last year resembles VW's best-selling Golf. It would drive autonomously, connect to cloud-based services and be ready for an array of digital services, said VW, which plans to build it in Germany, China and the U.S. starting in 2020.
VW is also behind on new "mobility services" such as car-sharing and ride-hailing. Car companies must move into such services, the argument in the industry goes, to replace revenue lost as consumers using them buy fewer cars. Car companies with their own sharing services would also be in a strong position to provide the cars used in those services.
In the past, many VW executives scorned car-sharing and ride-hailing as fads, some VW executives say. One internal evangelist was Ole Harms, a 42-year-old economist who is now head of VW's group handling new business models and mobility services.
Until Mr. Mueller took over, the company pursued few of Mr. Harms' ideas, they say. Meanwhile, rival Daimler AG was building its Car2Go unit into Europe's biggest car-sharing company, with 2.3 million members world-wide.
Daimler veteran Andreas Renschler, who joined VW months before the emissions scandal broke, says he asked then-CEO Mr. Winterkorn about VW's car-sharing plans. "I hear those cars are always dirty," Mr. Winterkorn replied dismissively about Daimler's car-sharing service, says Mr. Renschler, now VW's truck chief.
"The quality of the discussion has improved a lot," Mr. Renschler says.
Mr. Mueller's new strategy chief, Thomas Sedran, after joining in 2015 from General Motors Co.'s Opel unit, persuaded the CEO to take a stake in Gett, an Israel-based ride-hailing company.
Over several months, Mr. Mueller hosted VW-executive retreats at the company's guesthouse in Wolfsburg. Skepticism lingered about Gett at one retreat on April 22, 2016, the day VW reported a 4.1 billion euro loss due to the diesel scandal. Mr. Harms launched into his pitch, say people who were at the meeting, with slides of sales projections and showing the strategic fit with VW's brands.
When the floor was opened for questions, these people say, Frank Witter, VW's finance chief, asked: "Do we really have to do this? Is this sensible?"
"Yes, we do," shot back Mr. Renschler, who said VW needed to seize new revenue created by such services.
Mr. Renschler, Mr. Harms and another participant confirm the exchange, saying Mr. Witter was concerned about mounting costs from the emissions scandal. Mr. Witter declined to comment.
"It was a development process," says Mr. Harms, "and then at some point everybody was convinced."
The board backed the acquisition of Gett, which is now the nucleus of VW's Moia brand run by Mr. Harms. Gett drivers use their own vehicles now, but VW says it eventually wants to build vehicles for the service. Gett is the world's 10th largest car-hailing service, with about 1% of the market, according to industry consultants Frost & Sullivan.
Behind Mr. Mueller's push in app-based businesses is also the notion, growing in the auto industry, that data-heavy applications may create revenue streams inside the car -- location-based services, for example, that steer drivers to hotels or restaurants. Some believe data generated in the car -- where a driver travels or what parts are wearing down -- could be sold to third-party vendors offering services.
A 2016 McKinsey study projected shared-mobility and data services could create up to $1.5 trillion in additional revenue for the auto industry by 2030. To capture this new revenue, analysts say, auto makers need to develop digital technology and business models or risk seeing technology companies like Google fill the gap.
At the Geneva car show in March, VW unveiled its vision of where electric self-driving vehicles and mobility services can converge. Dubbed Sedric, the company's first fully autonomous vehicle, has no steering wheel or pedals.
"Dieselgate was bad," says Yung-Joo Presciutti, senior exterior designer on the Sedric project, "but now we have a good chance to change our way of thinking."
Credit: By William Boston
Subject: Antitrust; Corporate culture; Electric vehicles; Automobile industry
Location: Germany
People: Muller, Matthias
Company / organization: Name: Volkswagen AG; NAICS: 336111, 336390
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2017
Publication date: Aug 2, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1925063838
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1925063838?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reprod uction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Earnings: What to Watch; Auto maker's second-quarter financial report comes amid a disappointing sales period
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Aug 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc.'s second-quarter financial results are expected to be released after the market closes on Wednesday. Here is what you need to know:
EARNINGS FORECAST: Tesla is expected to post an adjusted loss of $1.82 cents a share, according to the average estimate of 19 analysts surveyed by Thomson Reuters. That compares with an adjusted loss of $1.06 a share a year earlier.
REVENUE FORECAST: Second-quarter revenue is forecast to more than double to $2.51 billion from $1.27 billion during the same period a year ago. Tesla recently reported that deliveries of the Model S sedan and Model X sport-utility vehicle rose to about 22,000 during the quarter, a 53% gain from the same quarter in 2016 but shy of 23,655, the average estimate of analysts surveyed by The Wall Street Journal.
WHAT TO WATCH:
COLD CASH: Chief Executive Elon Musk revealed greater pricing details of the coming Model 3 last week while warning that ramping up production would be "hell." Investors will likely want to know what a trip through hell looks like, focusing attention on cash burn as the company accelerates production. The company ended the first quarter with $4 billion in cash and said it would need to spend more than $2 billion by the time it started Model 3 production. Analysts, such as Colin Langan of UBS, say Tesla will ultimately need to raise more money.
ITEMIZING INVENTORY: After Tesla reported second-quarter vehicle sales, analysts questioned whether demand for the older Model S sedan and Model X sport-utility vehicle was softening. Toni Sacconaghi, an analyst for Bernstein, estimates that Tesla's car inventory has risen to 14,585, about doubling in the past two quarters. "A key question for us remains: 'Where are all the Teslas going?'" Mr. Sacconaghi wrote to investors. "We think Tesla's inventory build reflects a pause in demand for Model S and X, in part due to Model 3." In May, Mr. Musk suggested the $35,000 Model 3 was affecting sales of the more expensive Model S . Analysts will also likely be looking for greater clarity about Mr. Musk's recent comments that the company has more than 500,000 deposits for the Model 3, up from the previous 375,000.
MUSK'S MOOD: Mr. Musk is under scrutiny to deliver on his promises and he is getting asked about that pressure. In recent months, he has made some comments that have attracted attention, including a posting on Twitter over the weekend that suggested he is bi-polar. "Maybe not medically tho. Dunno," he wrote on Twitter. "Bad feelings correlate to bad events, so maybe real problem is getting carried away in what I sign up for." During the company's annual meeting, he responded to a question about how he relaxes by mentioning "a little red wine, vintage record players, some Ambien, magic happens." He told a gathering of governors last month that the company's stock, which has soared more than 50% this year, giving Tesla a market cap greater than Ford Motor Co., was "higher than we have any right to deserve" and bemoaned the pressure that comes from people's expectations getting "out of control." Two days later, he clarified on Twitter: "Tesla stock is obviously high based on past & present, but low if you believe in Tesla's future. Place bets accordingly."
Credit: By Tim Higgins
Subject: Social networks; Automobile industry; Financial performance; Inventory; Investments; Automobile sales
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Aug 2, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1925087460
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1925087460?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Loss Widens But Beats Expectations; Results come as auto maker ramps up production of mass-market Model 3
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Aug 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. worked to calm investor nerves Wednesday, stressing that orders for its two older and more expensive vehicles have accelerated lately despite the arrival of the cheaper Model 3 compact car.
In its second-quarter report, the Silicon Valley electric-car company reiterated it plans to sell more of the Model S sedans and Model X sport-utility vehicles during the second half than the first six months of the year, and it expects revenue to swell while operating costs hold steady.
The company ended the quarter with $3 billion in cash on hand after spending less during the April through June period than expected. That along with cash being generated during the second half should provide enough money to pay for Tesla's ambitious spending projects and give it enough flexibility during the Model 3 ramp up, Chief Executive Elon Musk told shareholders in a letter.
Tesla's stock has been on a tear this year--rising more than 50% this year and sending its market value above that of Ford Motor Co. and, at times, General Motors Co.--amid enthusiasm for the Model 3. The new car, which Tesla moved into production in July, is designed to remake the company as a more mainstream auto maker , ushering in an age of more affordable and popular electric cars.
But investors and analysts have expressed concern that buyers' anticipation for the $35,000 Model 3 could cannibalize sales of the older models. Those concerns were stoked in July when Tesla reported second-quarter deliveries of the Model S sedan and Model X sport-utility vehicle came up short of analysts' expectations. The shares fell about 13% since then ahead of Wednesday's announcement.
Tesla said Wednesday the orders for the two older vehicles in July rose 15% higher than the company's average weekly order rate during the second quarter, and orders for the Model S were increasing even more in the days after an event Friday celebrating the handoff of the first 30 Model 3s. "This growing demand gives us even more reason to expect increased deliveries of Model S and Model X in the second half of the year," Mr. Musk told shareholders.
Investors liked what they heard on Wednesday, sending Tesla's stock up over 8% in after-hours trading.
"We believe this was a better-than-expected quarter," James Albertine, an analyst for Consumer Edge Research, said in a note.
Mr. Musk was further helped by a second-quarter loss that was narrower than analysts' expectations. The Palo, Alto, Calif., company reported a loss of $336 million, compared with a loss of $239 million a year earlier. On an adjusted basis, the company's per-share loss of $1.33 beat the $1.82-a-share loss predicted by a consensus estimate of analysts surveyed by Thomson Reuters.
Revenue more than doubled to $2.79 billion, besting the analysts' average projection of $2.51 billion. Tesla said it cut its operating costs during the second quarter from the first quarter while it facing higher currency costs, which contributed to its net loss increasing from the first quarter.
In recent weeks, Mr. Musk has worked to tamp down expectations for the Model 3, warning fans at Friday's event that the auto maker was entering "manufacturing hell" for the next six months as he ramps up assembly. He reiterated that comment on Wednesday's earnings call--"When I meant production hell, I meant it"--but said investors shouldn't expect any significant negative surprises.
Mr. Musk said Friday Tesla has more than 500,000 reservations for the Model 3 and reiterated that new orders wouldn't be filled until late next year.
Greater pricing details revealed last week show buyers can pay as much as $59,500 for a version of the Model 3 with a long-range battery and other premium features. The long-range Model 3 costs $44,000 and can go 310 miles per charge, more than General Motors Co.'s Chevrolet Bolt and more than the lowest priced Model S.
In many ways, the Model 3 is aimed at the buyers of BMW AG and Daimler AG's Mercedes-Benz compact cars. The average transaction price of an entry-level luxury car in July in the U.S. was $41,831 while BMW's 3 Series sold on average for $43,023 and the Mercedes-Benz C-Class sold for $48,571, according to researcher Edmunds, which tracks new car sales.
Following the event, Tesla said it was averaging 1,800 Model 3 reservations per day.
Tesla had said Friday that nonemployee customers may receive the first Model 3s in September or October. But on Wednesday, Tesla said deliveries to nonemployees will begin in the fourth quarter. International deliveries will begin in late 2018, starting with left-hand drive markets followed by right-hand drive markets in 2019, according to Tesla.
The company didn't spend as much capital to prepare for production of the Model 3 in the first half as expected. In May, Tesla said it planned to spend $2 billion in capital expenditures but ended up spending $959 million in the second quarter after spending $553 million during the first quarter. The lower- than-expected spending was primarily because of the timing of milestone-based cash payments, Tesla said.
Tesla expects to spend $2 billion during the second half as those payments become due and as it expands its infrastructure.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related Coverage
* Cash Gets More Precious at Tesla (Aug. 2)
* Tesla Model 3 Test Drive: Car Has Bite and Simple Interior (July 29)
* Tesla's Big Reveal Shows a Rough Road Ahead (July 29)
Credit: By Tim Higgins
Subject: Automobile industry; Financial performance; Earnings
Location: Palo Alto California
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Aug 2, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1925292258
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1925292258?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall St reet Journal
Cash Gets More Precious at Tesla; The electric-car maker will have a tough task to get to a profitable future
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Aug 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. shareholders are betting on a profitable future. They would do well to spare a thought for the present.
The electric-auto manufacturer reported $2.8 billion in second-quarter revenue on Wednesday afternoon and an adjusted loss of $1.33 a share, both better than expectations. Tesla reiterated its ambitious timeline to roll out the Model 3 sedan, which formally launched last week. Shares were 6% higher after hours.
But that happy backdrop belies how hard getting to that future will be. Free cash flow was negative $1.1 billion in the quarter, including $959 million in capital spending. That cash-flow figure could have been even worse if not for a nearly $300 million increase in accounts payable from the first quarter to $2.3 billion. Tesla forecasts an additional $2 billion in capital spending before the year is out.
More danger looms: Tesla said the initial rollout of the Model 3 will result in negative gross margins on that product since overhead costs will dwarf deliveries before production ramps higher.
A capital raise seems necessary to bolster Tesla's $3 billion cash pile, though CEO Elon Musk said an equity raise is not currently under consideration. Access to the capital markets shouldn't be a problem for now.
On the bright side, Mr. Musk forecast that higher-margin Model X and Model S sales in the second half of the year would exceed the first half's total of 47,077 delivered cars. That is good news, but isn't much of an accomplishment--Tesla delivered 47,073 vehicles in the second half of 2016.
Growth stocks aren't worth much if the business doesn't grow. If Tesla's operating metrics slip in the second half of the year, shareholders will have an expensive problem on their hands.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Financial performance; Stockholders; Growth stocks
People: Musk, Elon
Company / organization: Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Aug 2 , 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1925327607
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1925327607?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Loss Widens But Beats Expectations; Results come as auto maker ramps up production of mass-market Model 3
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Aug 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. worked to calm investor nerves Wednesday, stressing that orders for its two older and more expensive vehicles have accelerated lately despite the arrival of the cheaper Model 3 compact car.
In its second-quarter report, the Silicon Valley electric-car company reiterated it plans to sell more of the Model S sedans and Model X sport-utility vehicles during the second half than the first six months of the year, and it expects revenue to swell while operating costs hold steady.
The company ended the quarter with $3 billion in cash on hand after spending less during the April through June period than expected. That along with cash being generated during the second half should provide enough money to pay for Tesla's ambitious spending projects and give it enough flexibility during the Model 3 ramp up, Chief Executive Elon Musk told shareholders in a letter. He later signaled to analysts on a conference call that Tesla may tap the debt market again for more cash.
Tesla's stock has been on a tear this year--rising more than 50% this year and sending its market value above that of Ford Motor Co. and, at times, General Motors Co.--amid enthusiasm for the Model 3. The new car, which Tesla moved into production in July, is designed to remake the company as a more mainstream auto maker , ushering in an age of more affordable and popular electric cars.
But investors and analysts have expressed concern that buyers' anticipation for the $35,000 Model 3 could cannibalize sales of the older models. Those concerns were stoked in July when Tesla reported second-quarter deliveries of the Model S sedan and Model X sport-utility vehicle came up short of analysts' expectations. The shares fell about 13% since then ahead of Wednesday's announcement.
Tesla said Wednesday the orders for the two older vehicles in July rose 15% higher than the company's average weekly order rate during the second quarter, and orders for the Model S were increasing even more in the days after an event Friday celebrating the handoff of the first 30 Model 3s. "This growing demand gives us even more reason to expect increased deliveries of Model S and Model X in the second half of the year," Mr. Musk told shareholders.
Investors liked what they heard on Wednesday, sending Tesla's stock up over 8% in after-hours trading.
"We believe this was a better-than-expected quarter," James Albertine, an analyst for Consumer Edge Research, said in a note.
Mr. Musk was further helped by a second-quarter loss that was narrower than analysts' expectations. The Palo, Alto, Calif., company reported a loss of $336 million, compared with a loss of $239 million a year earlier. On an adjusted basis, the company's per-share loss of $1.33 beat the $1.82-a-share loss predicted by a consensus estimate of analysts surveyed by Thomson Reuters.
Revenue more than doubled to $2.79 billion, besting the analysts' average projection of $2.51 billion. Tesla said it cut its operating costs during the second quarter from the first quarter while facing higher currency costs, which contributed to its net loss increasing from the first quarter.
In recent weeks, Mr. Musk has worked to tamp down expectations for the Model 3, warning fans at Friday's event that the auto maker was entering "manufacturing hell" for the next six months as he ramps up assembly. He reiterated that comment on Wednesday's earnings call--"When I meant production hell, I meant it"--but said investors shouldn't expect any significant negative surprises.
Mr. Musk said Friday Tesla has more than 500,000 reservations for the Model 3 and reiterated that new orders wouldn't be filled until late next year. On Wednesday, he said he misspoke. Instead, the company said it had a gross figure of 518,000 reservations and a net of 455,000 orders, suggesting 63,000 cancellations.
Greater pricing details revealed last week show buyers can pay as much as $59,500 for a version of the Model 3 with a long-range battery and other premium features. The long-range Model 3 costs $44,000 and can go 310 miles per charge, more than General Motors Co.'s Chevrolet Bolt and more than the lowest priced Model S.
In many ways, the Model 3 is aimed at the buyers of BMW AG and Daimler AG's Mercedes-Benz compact cars. The average transaction price of an entry-level luxury car in July in the U.S. was $41,831 while BMW's 3 Series sold on average for $43,023 and the Mercedes-Benz C-Class sold for $48,571, according to researcher Edmunds, which tracks new car sales.
Following the event, Tesla said it was averaging 1,800 Model 3 reservations per day.
Tesla had said Friday that nonemployee customers may receive the first Model 3s in September or October. But on Wednesday, Tesla said deliveries to nonemployees will begin in the fourth quarter. International deliveries will begin in late 2018, starting with left-hand drive markets followed by right-hand drive markets in 2019, according to Tesla.
The company didn't spend as much capital to prepare for production of the Model 3 in the first half as expected. In May, Tesla said it planned to spend $2 billion in capital expenditures but ended up spending $959 million in the second quarter after spending $553 million during the first quarter. The lower- than-expected spending was primarily because of the timing of milestone-based cash payments, Tesla said.
Tesla expects to spend $2 billion during the second half as those payments become due and as it expands its infrastructure.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related Coverage
* Cash Gets More Precious at Tesla (Aug. 2)
* Tesla Model 3 Test Drive: Car Has Bite and Simple Interior (July 29)
* Tesla's Big Reveal Shows a Rough Road Ahead (July 29)
Credit: By Tim Higgins
Subject: Net losses; Automobile industry; Operating costs; Stockholders; Investments; Capital expenditures; Vehicles
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 3363 90
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Aug 3, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1925330919
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1925330919?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Tesla Attempts to Calm Investors
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Aug 2017: B.3.
ProQuest document link
Abstract:
In its second-quarter report, the Silicon Valley electric-car company reiterated that it planned to sell more of the Model S sedans and Model X sport-utility vehicles during the second half than the first six months of the year, and said it expected revenue to swell while operating costs hold steady. Tesla's stock has been on a tear -- rising more than 50% this year and sending its market value above that of Ford Motor Co....
Full text: Tesla Inc. worked to calm investor nerves, stressing on Wednesday that orders for its two older and more expensive vehicles have accelerated lately despite the arrival of the cheaper Model 3 compact car.
In its second-quarter report, the Silicon Valley electric-car company reiterated that it planned to sell more of the Model S sedans and Model X sport-utility vehicles during the second half than the first six months of the year, and said it expected revenue to swell while operating costs hold steady.
The company ended the quarter with $3 billion in cash on hand after spending less during the April through June period than expected. That along with cash being generated during the second half should provide enough money to pay for Tesla's ambitious spending projects and give it enough flexibility during the Model 3 ramp up, Chief Executive Elon Musk told shareholders in a letter. He later signaled to analysts on a conference call that Tesla may tap the debt market again for more cash.
Tesla's stock has been on a tear -- rising more than 50% this year and sending its market value above that of Ford Motor Co. and, at times, General Motors Co. -- amid enthusiasm for the Model 3. The new car, which Tesla moved into production last month, is designed to remake the company as a more mainstream auto maker, ushering in an age of more affordable and popular electric cars.
But investors and analysts have expressed concern that buyers' anticipation for the $35,000 Model 3 could cannibalize sales of the older models. Those concerns were stoked last month when Tesla reported deliveries of the Model S sedan and Model X sport-utility vehicle came up short of analysts' expectations. The shares fell about 13% since then ahead of Wednesday's announcement.
On Wednesday, Tesla said the orders for the two older vehicles in July rose 15% higher than the company's average weekly order rate during the second quarter, and that orders for the Model S were increasing even more in the days after an event on Friday celebrating the handoff of the first 30 Model 3s. "This growing demand gives us even more reason to expect increased deliveries of Model S and Model X in the second half of the year," Mr. Musk told shareholders.
Investors liked what they heard on Wednesday, sending Tesla's stock up more than 8% in after-hours trading.
"We believe this was a better than expected quarter," James Albertine, an analyst for Consumer Edge Research, said in a note.
Mr. Musk was further helped by a second-quarter loss that was narrower than analysts' expectations. The Palo, Alto, Calif., company reported a loss of $336 million, compared with a loss of $239 million a year earlier. On an adjusted basis, the company's per-share loss of $1.33 beat the $1.82-a-share loss predicted by a consensus estimate of analysts surveyed by Thomson Reuters.
Revenue more than doubled to $2.79 billion, besting the analysts' average projection of $2.51 billion. Tesla said it cut operating costs during the second quarter from the first quarter while facing higher currency costs, which contributed to its net loss increasing from the first quarter.
In recent weeks, Mr. Musk has worked to tamp down expectations for the Model 3, warning fans at Friday's event that the auto maker was entering "manufacturing hell" for the next six months as he ramps up assembly. Mr. Musk reiterated that comment on Wednesday's earnings call -- "When I meant production hell, I meant it" -- but he said investors shouldn't expect any significant negative surprises.
Credit: By Tim Higgins
Subject: Automobile industry; Financial performance; Company reports
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Aug 3, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1925362754
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1925362754?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla's Cash Could Burn in Production 'Hell'; Ambitious production goals for the Model 3 may prompt a capital crunch and a trip to the debt markets
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Aug 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc.'s version of production "hell" apparently means the Silicon Valley electric-car maker will run low on cash later this year as it embarks on an ambitious plan to build its first automobile for mainstream consumers.
Chief Executive Elon Musk reiterated on Wednesday--after announcing a better-than-expected second-quarter loss --that the 14-year-old auto maker faces challenges in learning to manufacture the new Model 3 sedan at much higher volumes than previous vehicles.
"When I said manufacturing hell ...I meant it," Mr. Musk told analysts on a conference call. "But we know this--signed up for it, not blaming hell because we bought the ticket."
Tesla is no stranger to capital crunches as it rolled out ambitious timelines for the production of its vehicles and spent heavily on research and development, equipment and factories in California and Nevada. The company has typically raised equity or issued debt offerings to replenish its stockpile, and Mr. Musk on Wednesday suggested he is thinking about tapping the debt market.
The company finished the latest quarter with $3 billion in cash and plans to spend $2 billion in the second half to make way for the Model 3. While Tesla said its cash and increased revenue during the second half should cover all of its spending projects, analysts raised doubts about that cash cushion. Tesla in the past has suggested the company should always have a minimum of $1 billion on hand at the end of each quarter.
During Wednesday's call, Ryan Brinkman, an analyst for J.P. Morgan, asked if Tesla expected to generate enough cash to meet such a goal at year's end. Mr. Musk replied that Tesla has negotiated better payment terms with suppliers and aims to build the Model 3 faster than previous models so the company can sell the vehicles before having to pay the bills for parts. But he noted that having "a cash cushion" for unexpected events is wise.
"We are thinking about debt, but we're not thinking about an equity raise," Mr. Musk told analysts.
Deepak Ahuja, Tesla's financial chief, said the company hasn't yet tapped $800 million of its credit lines and that it could draw $700 million in tax equity funds and debt from its newly acquired solar business. Tesla finished the first quarter with outstanding debt of $9.67 billion, including long-term notes and capital leases, according to S&P Global Market Intelligence. It raised more than $1 billion through debt and stock earlier this year.
Analysts afterward flagged the prospect of a cash shortage as Tesla boosts capital spending the second half. It "begs the question of whether another capital raise is on the horizon," Brian Johnson, an analyst for Barclays, wrote in a note to investors. The additional capital spending "will make your eyes water," Adam Jonas, an analyst for Morgan Stanley, told investors. "Time will tell if they are tears of joy."
"Another debt offering this year wouldn't be a shock and neither would a capital raise next year," David Whiston, an analyst for Morningstar Research, said. "People need to get used to Tesla being heavily reliant on further capital raises to achieve its ambitious growth plans."
Tesla is aiming to boost its production to 10,000 Model 3 vehicles a week by the end of next year after averaging less than 2,000 other model vehicles a week last year.
Mr. Musk said Friday that Tesla has more than 500,000 net reservations for the Model 3 and repeated that new orders wouldn't be filled until late next year. On Wednesday, he said he had misspoken. Instead, the company recorded a gross figure of 518,000 reservations and a net of 455,000 orders, suggesting 63,000 cancellations.
Mr. Musk suggested that demand isn't the issue.
"I think this is like inconsequential because with a small amount of effort, we could easily drive the Model 3 reservation over to something much higher, but there's no point," Mr. Musk told analysts on Wednesday. It is "like a restaurant and you're serving hamburgers and there's like an hour and a half wait for the hamburger. Do you really want to encourage more people to come order hamburgers?"
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Startup Pledges Its Building for Loan
* Tesla Loss Widens But Beats Expectations (Aug. 2)
* Heard: Cash Gets More Precious at Tesla (Aug. 2)
* Tesla Model 3 Arrives as Musk Warns of 'Manufacturing Hell' (July 29)
* Tesla Model 3 Test Drive: Car Has Bite and Simple Interior (July 29)
* GM Eases Summer Production of Chevrolet Bolt (July 20)
Credit: By Tim Higgins
Subject: Lines of credit; Investments; Equity; Research & development--R & D; Equity funds; Capital expenditures
Location: California Nevada
Company / organization: Name: JPMorgan Chase & Co; NAICS: 522110, 522292, 523110
Publication title: Wall Street Journal (Online); New Yo rk, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Aug 3, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1925487777
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1925487777?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyr ight owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Tesla Needs Cash Amid Production 'Hell' --- Making the Model 3 for mainstream consumers is presenting problems
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Aug 2017: B.3.
ProQuest document link
Abstract:
Tesla Inc.'s version of production "hell" apparently means the Silicon Valley electric-car maker will run low on cash later this year as it embarks on an ambitious plan to build its first automobile for mainstream consumers. Chief Executive Elon Musk reiterated on Wednesday -- after announcing a better-than-expected second-quarter loss -- that the 14-year-old auto maker faces challenges in learning to manufacture the new Model 3 sedan at much higher volumes than previous vehicles. Tesla...
Full text: Tesla Inc.'s version of production "hell" apparently means the Silicon Valley electric-car maker will run low on cash later this year as it embarks on an ambitious plan to build its first automobile for mainstream consumers.
Chief Executive Elon Musk reiterated on Wednesday -- after announcing a better-than-expected second-quarter loss -- that the 14-year-old auto maker faces challenges in learning to manufacture the new Model 3 sedan at much higher volumes than previous vehicles.
"When I said manufacturing hell . . . I meant it," Mr. Musk told analysts on a conference call. "But we know this -- signed up for it, not blaming hell because we bought the ticket."
Tesla is no stranger to capital crunches as it rolled out ambitious timelines for the production of its vehicles and spent heavily on research and development, equipment and factories in California and Nevada. The company has typically raised equity or issued debt offerings to replenish its stockpile, and Mr. Musk on Wednesday suggested he is thinking about tapping the debt market.
The company finished the latest quarter with $3 billion in cash and plans to spend $2 billion in the second half to make way for the Model 3. While Tesla said its cash and increased revenue during the second half should cover all of its spending projects, analysts raised doubts about that cash cushion. Tesla in the past has suggested the company should always have a minimum of $1 billion on hand at the end of each quarter.
During Wednesday's call, Ryan Brinkman, an analyst for J.P. Morgan, asked if Tesla expected to generate enough cash to meet such a goal at year's end. Mr. Musk replied that Tesla has negotiated better payment terms with suppliers and aims to build the Model 3 faster than previous models so the company can sell the vehicles before having to pay the bills for parts. He noted that having "a cash cushion" for unexpected events is wise.
"We are thinking about debt, but we're not thinking about an equity raise," Mr. Musk told analysts.
Deepak Ahuja, Tesla's financial chief, said the company hasn't yet tapped $800 million of its credit lines and that it could draw $700 million in tax equity funds and debt from its newly acquired solar business. Tesla finished the first quarter with outstanding debt of $9.67 billion, including long-term notes and capital leases, according to S&P Global Market Intelligence. It raised more than $1 billion through debt and stock earlier this year.
Analysts afterward flagged the prospect of a cash shortage as Tesla boosts capital spending in the second half. It "begs the question of whether another capital raise is on the horizon," Brian Johnson, an analyst for Barclays, wrote in a note to investors. The additional capital spending "will make your eyes water," Adam Jonas, an analyst for Morgan Stanley, told investors. "Time will tell if they are tears of joy."
"Another debt offering this year wouldn't be a shock and neither would a capital raise next year," said David Whiston, an analyst for Morningstar Research. "People need to get used to Tesla being heavily reliant on further capital raises to achieve its ambitious growth plans."
Tesla aims to boost its production to 10,000 Model 3 vehicles a week by the end of next year after averaging fewer than 2,000 other model vehicles a week last year.
Mr. Musk said last week that Tesla has more than 500,000 net reservations for the Model 3 and repeated that new orders wouldn't be filled until late next year. On Wednesday, he said he had misspoken. Instead, the company recorded a gross figure of 518,000 reservations and a net of 455,000 orders, suggesting 63,000 cancellations.
Credit: By Tim Higgins
Subject: Financial performance; Automobile production; Company reports
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Aug 4, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1925755851
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1925755851?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
The Problem With Electric Cars? Not Enough Chargers; To hit its sales targets, Tesla has to sell 430,000 cars by the end of 2018 and 10,000 a week after that--but where are they all going to plug in?
Author: Mims, Christopher
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Aug 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: It's the dawn of the age of the electric vehicle. For real, this time. Probably.
The evidence: Tesla's delivery of its first "affordable" compact sedans , the Model 3, and the road maps of more or less every other automaker on the planet promising widely available electric cars in the next three to five years .
Within a decade, electric cars will even have similar sticker prices to their gasoline competitors, says Stephen Zoepf, executive director of the Center for Automotive Research at Stanford. Some analyses say EVs are already cost-competitive, if you factor in savings on fuel and maintenance.
Aggressive pricing and sales projections are all part of the seemingly self-fulfilling prophecy of rapid EV adoption. To hit Chief Executive Elon Musk's targets, Tesla must sell 430,000 cars by the end of 2018 and continue to sell 10,000 a week after that.
But if Tesla and its competitors succeed, they face a new problem: Where are all those cars going to plug in?
At present, electric cars represent only about 1% of cars sold in the U.S., and 0.2% of our total automobile fleet. They aren't yet taxing our electrical grid or fighting each other for the roughly 44,000 public charging stations now available in the U.S. Yet if anything like analysts' projections come to pass, they could rapidly dwarf that number.
Electric-car owners at present overwhelmingly charge at home. What public stations exist are found in parking lots and at businesses in cities and wealthy suburbs where early adopters reside. But the current charging infrastructure offers little support for a larger pool of people who have both the income and the impetus to buy EVs: city dwellers who lack garages.
"You see models that say, 'We'll sell a million EVs this year, then two, then four and so on,' but I have concerns about the practicalities of this transition," says Francis O'Sullivan, director of research for the MIT Energy Initiative.
"All things cannot be sorted before the industry starts," says Pasquale Romano, chief executive of ChargePoint, which controls the largest U.S. network of charging stations.
Charging infrastructure is adequate to meet current demand, and there's no reason to believe it won't continue to scale in line with future demand, he argues. ChargePoint makes and sells charging stations to businesses, individuals and governments, charging monthly to maintain the stations and accepting payments for the electricity they provide.
ChargePoint was part of an initiative in Los Angeles to put charging stations in existing lampposts, says Matt Petersen, until recently L.A.'s chief sustainability officer. (The city has installed 82 so far.)
That makes sense because a good chunk of a new charging station's cost--which can hit $5,000--is installing it and wiring it up, ChargePoint's Mr. Romano says.
German firm Ubitricity is pioneering relatively low-cost, low-power plugs that go directly into lampposts, and can be accessed with an internet-connected "smart" power cable that handles all metering and billing.
Kieran Fitsall, head of service improvement and transformation for the Westminster City Council of central London, says it has installed 20 Ubitricity plugs in street lamps. The plan is to increase that to 100 by March 2018.
One of Ubitricity's advantages is the plugs don't require the council to designate EV-only parking spots, which are unpopular with people who don't drive them, Mr. Fitsall says. Ubitricity currently has no U.S. presence but is seeking investment to expand, says company co-founder Knut Hechtfischer.
While these efforts may show where the technology is headed, it isn't clear that it's rolling out at anywhere close to the pace automakers anticipate they will sell vehicles.
The biggest challenge for those building out charging infrastructure is that no one can predict the demand for charging as EVs become commonplace, says MIT's Dr. O'Sullivan. In fact, he calls some of the behavioral factors needed to make such predictions "exceptionally opaque." These include the time of day people will choose to charge, how responsive they will be to price incentives on electricity designed to encourage them to charge at the "right" time, and how often they'll use "superchargers" versus lower-power outlets for overnight charging.
This brings us to another looming issue: America's often-overtaxed power grids won't be able to handle a large influx of new demand without careful management. This generally won't be a problem if cars charge at night, when the power grid is underutilized. But as EVs proliferate, drivers who can't charge them at home will want to charge them at work, during the day. They'll also seek superchargers, which typically are installed along highways and designed for fast charging and long-distance travel.
"Superchargers are enormous power draws," says Jesse Jenkins, a researcher at the MIT Energy Initiative. "Chargers in parking garages or superchargers at rest stops are not a solution for charging EVs en masse unless we are OK with significant costs to upgrade distribution grids."
Even the regular charger found in homes and businesses could present a costly problem when cars charge during demand peaks. Anything that increases peak demand could increase the cost of electricity for everyone, says Stanford's Dr. Zoepf.
The sheer scale of the transformation of the electrical grid to accommodate mainstream adoption of EVs boggles the mind. A major portion of the energy currently trapped in automotive fuels will have to arrive in the form of electrons, instead. While some analyses indicate America's existing electrical grid can handle it, it may be only if millions of American consumers can be coaxed to play along and charge at the right place and time .
That's also assuming private companies and public utilities can get the needed charging infrastructure to the public at a price they are willing to pay.
If Elon Musk and his competitors succeed at selling as many electric vehicles as they project, keeping them all full of electricity will be a long, hugely expensive and potentially contentious undertaking. It could also be quite lucrative for the people who figure it out.
Write to Christopher Mims at christopher.mims@wsj.com
Credit: By Christopher Mims
Subject: Automobile industry; Infrastructure; Electricity; Electricity distribution; Electric vehicles; Cost control; Competition
Location: United States--US
People: Musk, Elon
Company / organization: Name: Center for Automotive Research; NAICS: 541380, 541712; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Aug 6, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1926292138
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1926292138?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla to Sell $1.5 Billion in Debt Amid Launch of Model 3; The Silicon Valley auto maker, facing 'manufacturing hell' to tap debt market to fuel its operations
Author: Vasquez, Justina; Lombardo, Cara
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Aug 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. on Monday said it would sell $1.5 billion in senior notes, opting to raise cash through the debt market rather than by offering equity , as the electric-vehicle maker ramps up production on its first automobile for mainstream customers, the Model 3.
Chief Executive Elon Musk last week told analysts that Tesla faces "manufacturing hell," and that the company was considering tapping the debt market in its efforts to compete as a mass-market manufacturer.
With this latest offering, Tesla would have more than $10 billion of debt outstanding. Tesla reported it had $9.67 billion of debt, including long-term notes and capital leases, at the end of the first quarter, according to S&P Global Market Intelligence.
The company finished its latest quarter with $3 billion in cash, $2 billion of which it plans to spend in the second half of the year.
"People need to get used to Tesla being heavily reliant on further capital raises to achieve its ambitious growth plans," David Whiston, an analyst for Morningstar Research, said last week.
The company on Monday said it hasn't determined the interest rate, redemption prices and other terms in the debt offering, which will be due in 2025.
Mr. Musk has said Tesla faces challenges in learning to manufacture the Model 3 at much higher volumes than previous vehicles in its lineup. The 14-year-old auto maker is aiming to boost production to 10,000 Model 3 vehicles a week by the end of next year, after averaging fewer than 2,000 a week for other models last year.
The $35,000 Model 3 is part of Mr. Musk's bet to transform Tesla from a luxury car maker into a sustainable energy company that sells electric vehicles to the masses, offers solar power to generate energy, and produces large batteries to store that power at home and offices. The sedan is designed to remake the company as a more mainstream auto maker, ushering in an age of more affordable and popular electric cars.
There is a risk that a too-successful Model 3 launch could cannibalize sales of older models such as the Model S sedan and the Model X sport-utility vehicle. Those concerns were stoked when Tesla recently reported second-quarter deliveries for those models that came up short of analysts' expectations.
Tim Higgins contributed to this article
Write to Justina Vasquez at justina.vasquez@wsj.com and Cara Lombardo at cara.lombardo@wsj.com
Related News
* Heard on the Street: Cash-Hungry Tesla's Missed Opportunity
* Tesla's Cash Could Burn in Production 'Hell'
* Tesla Loss Widens But Beats Expectations
* Tesla Sets Aggressive Production Plan for Model 3
Credit: By Justina Vasquez and Cara Lombardo
Subject: Automobile industry
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Aug 7, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1926438449
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1926438449?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Cash-Hungry Tesla's Missed Opportunity; Elon Musk's decision to use debt to finance the Model 3 while his company's share price is so strong may turn out to be a mistake
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Aug 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. is gearing up for its most important product launch without putting its best asset to work.
Tesla announced Monday that it will issue $1.5 billion in debt securities due in 2025 to help bring the Model 3 sedan to customers.
The announcement is unsurprising in some respects. Tesla certainly needs new capital to fund its sizable ambitions. CEO Elon Musk told investors that Tesla was considering debt, rather than equity, on last week's second-quarter earnings call. While the interest rate on the bonds is yet to be determined, debt typically is cheaper than equity.
Still, at this particular moment, Tesla is taking a risk. It burned through $1.1 billion in free cash in the second quarter, so the fresh capital only accounts for a few months of operations. The company has more than $7 billion in long-term debt outstanding as of June 30.
Granted, Tesla does have slightly more than $3 billion in cash on hand, but that number is something of an illusion. Accounts payable and accrued liabilities exceed $3.8 billion. And while Tesla told investors to expect positive operating cash flow in the second half of 2017, it expects to spend an extra $2 billion on capital needs before the year is out. This almost certainly won't be its last trip to the capital markets.
Tesla's high share price is arguably its greatest asset at the moment. At current prices, Tesla could raise $1.5 billion by increasing total shares outstanding by less than 3% and without further balance sheet strain.
Investors haven't shown any sign of losing faith in Mr. Musk's vision. Indeed, the stock traded only slightly lower on Monday. If Tesla slips on what is the start of a financial tightrope act, he may rue this as a wasted opportunity.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Financial performance; Investments; Cash flow statements
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Aug 7, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1926516185
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1926516185?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla to Sell $1.5 Billion in Debt to Fuel Aggressive Expansion; The Silicon Valley auto maker taps debt market to push broader sales of its lower-price Model 3 sedan
Author: Wirz, Matt; Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Aug 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. took a step toward financing its transformation from a niche builder of pricey luxury cars to a mass-market rival of Fords and Chevrolets, setting plans to raise $1.5 billion in its first-ever sale of traditional bonds .
The electric-car maker, gearing up for an ambitious expansion with the introduction of its more moderately priced Model 3 sedan, is expected to sell the bonds as early as Friday in a deal underwritten by Goldman Sachs Group Inc.
The Palo Alto, Calif., company said on Monday that the funds would help push broader sales of its lower-price Model 3 sedan, which the company plans to use to steal a march on mass market rivals such as Ford Motor Co.
Tesla has been a big winner in the stock market --up more than 1,000% in the past five years to a recent market value of $59 billion--and investors said they expect the firm's efforts to sell junk bonds to succeed, given the market's thirst for high-yield debt.
At the same time, the auto industry is among the most capital-intensive ventures in business. Tesla posted a loss of $336 million in its most recent quarter despite rising revenue, highlighting the firm's dependence on raising capital in the financial markets . Tesla is the most valuable U.S. auto maker, but it sells a fraction of the vehicles sold by General Motors Co., Ford or Fiat Chrysler Automobiles NV--and has yet to report an annual profit after nearly 15 years in business.
Tesla "burns a lot of cash and it's not clear they have a sustainable business," said Bob Schwartz, a bond analyst for AllianceBernstein LP who is debating whether to buy the new debt. The deal is likely to get strong support from investment firms that already own Tesla stock, but "just because it has a huge market cap doesn't mean it's a good credit," he said.
Tesla is rated B-minus by S&P Global, seven notches below the firm's rating of Ford.
Turning to the bond market allows Tesla Chief Executive Elon Musk to raise money without diluting his ownership or further encumbering corporate assets.
Tesla tapped Goldman to arrange the issue of an eight-year, $1.5 billion bond, and the investment bank is unofficially marketing it to yield 5.25%, a person familiar with the matter said. Goldman is offering prospective investors a tour of the company's factory on Wednesday to introduce them to the firm, according to an investor.
The sale comes after Tesla repeatedly sold stock and convertible bonds, which can be exchanged for equity later, raising almost $8.5 billion in such deals since 2010, according to Dealogic. The firm also started borrowing against its hard assets in the corporate-loan market in 2015 and has since issued $4.5 billion in loans.
The business case for electric cars remains murky. Gasoline is cheap, driving people to pickups and sport-utility vehicles powered by internal combustion engines, and battery-powered cars are seen as taking too long to charge, expensive and lacking range. Tesla's cars, to date, have qualified for a $7,500 federal tax credit and Tesla has spent heavily to place so-called fast chargers all over the world.
Recently, Tesla's Mr. Musk promised to add electric pickup trucks, small SUVs, large trucks and bus-like vehicles. Analysts expect the future ambitions of Tesla, which is already committing a substantial chunk of the company's revenue to capital expenditures and R&D, to require additional capital increases.
The Model 3 is aimed at more mainstream buyers, with a base price of $35,000. Critics say that car can't be plagued with the same quality glitches that Model S or X buyers experienced, and that wait times for service or delivery need to be curtailed. Selling hundreds of thousands of Model 3s is seen as necessary because it could bring battery costs closer in line with conventional engines.
An electric car can cost upward of $10,000 more than its conventional counterpart, and analysts say it could take nearly a decade to close the gap. Tesla, building its own batteries, could have disproportionate influence in bringing those costs down due to its deep experience, access to technical experts and considerable scale.
A year ago, Mr. Musk combined Tesla with SolarCity, a home-solar company that he served as chairman of at the time. Combining the two companies was designed to make Tesla a more diverse company focused on batteries, solar energy and automobiles. Other auto makers have scaled back on alternative business lines.
Mr. Musk runs several ventures outside of the car business, including Space Exploration Technologies Corp. He is a major backer of those companies, with shares in some being used as collateral for personal loans used to buy even more stock in the companies he runs.
Bond investors are eager for new deals because there has been little supply in recent months due to a slowdown in mergers and acquisitions, which are usually funded with junk bonds. High-yield companies issued $9 billion of new bonds in July, the lowest amount since January 2016, according to Dealogic, when collapsing oil prices caused junk-debt markets to shut down.
"There hasn't been much new supply and investors have cash they need to spend," said Tom O'Reilly, head of non-investment-grade credit for Neuberger Berman Group LLC, who says he won't participate in the sale. "As a new borrower, that's going to play to your advantage."
The bond sale also comes during a summer slowdown in corporate-debt offerings, which some fund managers said could produce favorable terms for Tesla among investors hungry for new bonds. Yet several prospective buyers said they remain leery of lending to a company that has yet to report an annual profit and has one of the lowest-possible credit ratings.
Write to Matt Wirz at matthieu.wirz@wsj.com and John D. Stoll at john.stoll@wsj.com
Related
* Heard on the Street: A Missed Opportunity for Tesla
* Tesla's Cash Could Burn in Production 'Hell'
* Tesla Loss Widens But Beats Expectations
* Tesla Sets Aggressive Production Plan for Model 3
Credit: By Matt Wirz and John D. Stoll
Subject: Automobile industry; Corporate profits; Losses; Investments; Electric vehicles; Capital expenditures; Trucks
Location: United States--US
Company / organization: Name: AllianceBernstein LP; NAICS: 523920; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Fiat Chrysler Automobiles NV; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Aug 8, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1926804870
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1926804870?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Adds Debt In Growth Push
Author: Wirz, Matt; Stoll, John D
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 Aug 2017: A.1.
ProQuest document link
Abstract:
The electric-car maker, gearing up for an ambitious expansion with the introduction of its more moderately priced Model 3 sedan, is expected to sell the bonds as early as Friday in a deal underwritten by Goldman Sachs Group Inc. The Palo Alto, Calif., company said on Monday that the funds would help push broader sales of its lower-price Model 3 sedan, which the company plans to use to steal a march on mass-market rivals such as Ford Motor Co. Tesla has been a big winner in the stock market -- up more than 1,000% in the past five years to a recent market value of $59 billion -- and investors said they expect the firm's efforts to sell junk bonds to succeed, given the market's thirst for high-yield debt. Tesla is the most valuable U.S. auto maker, but it sells a fraction of the vehicles sold by General Motors Co., Ford or Fiat Chrysler Automobiles NV -- and has yet to report an annual profit after nearly 15 years in business. Gasoline is cheap, driving people to pickups and sport-utility vehicles powered by internal combustion engines, and battery-powered cars are seen as taking too long to charge, expensive and lacking range.
Full text: Tesla Inc. took a step toward financing its transformation from a niche builder of pricey luxury cars to a mass-market rival of Fords and Chevrolets, setting plans to raise $1.5 billion in its first-ever sale of traditional bonds.
The electric-car maker, gearing up for an ambitious expansion with the introduction of its more moderately priced Model 3 sedan, is expected to sell the bonds as early as Friday in a deal underwritten by Goldman Sachs Group Inc.
The Palo Alto, Calif., company said on Monday that the funds would help push broader sales of its lower-price Model 3 sedan, which the company plans to use to steal a march on mass-market rivals such as Ford Motor Co.
Tesla has been a big winner in the stock market -- up more than 1,000% in the past five years to a recent market value of $59 billion -- and investors said they expect the firm's efforts to sell junk bonds to succeed, given the market's thirst for high-yield debt.
Atthe same time, the auto industry is among the most capital-intensive ventures in business. Tesla posted a loss of $336 million in its most recent quarter despite rising revenue, highlighting the firm's dependence on raising capital in the financial markets. Tesla is the most valuable U.S. auto maker, but it sells a fraction of the vehicles sold by General Motors Co., Ford or Fiat Chrysler Automobiles NV -- and has yet to report an annual profit after nearly 15 years in business.
Tesla "burns a lot of cash and it's not clear they have a sustainable business," said Bob Schwartz, a bond analyst for AllianceBernstein LP who is debating whether to buy the new debt. The deal is likely to get strong support from investment firms that already own Tesla stock, but "just because it has a huge market cap doesn't mean it's a good credit," he said.
Tesla is rated B-minus by S&P Global, seven notches below the firm's rating of Ford.
Turning to the bond market allows Tesla Chief Executive Elon Musk to raise money without diluting his ownership or further encumbering corporate assets.
Tesla tapped Goldman to arrange the issue of an eight-year, $1.5 billion bond, and the investment bank is unofficially marketing it to yield 5.25%, a person familiar with the matter said. Goldman is offering prospective investors a tour of the company's factory on Wednesday to introduce them to the firm, according to an investor.
The sale comes after Tesla repeatedly sold stock and convertible bonds, which can be exchanged for equity later, raising almost $8.5 billion in such deals since 2010, according to Dealogic.
The business case for electric cars remains murky. Gasoline is cheap, driving people to pickups and sport-utility vehicles powered by internal combustion engines, and battery-powered cars are seen as taking too long to charge, expensive and lacking range. Tesla's cars, to date, have qualified for a $7,500 federal tax credit and Tesla has spent heavily to place so-called fast chargers all over the world.
Recently, Tesla's Mr. Musk promised to add electric pickup trucks, small SUVs, large trucks and bus-like vehicles. Analysts expect the future ambitions of Tesla, which is already committing a substantial chunk of the company's revenue to capital expenditures and R&D, to require additional capital increases.
The Model 3 is aimed at more mainstream buyers, with a base price of $35,000. Critics say that car can't be plagued with the same quality glitches that Model S or X buyers experienced, and that wait times for service or delivery need to be curtailed. Selling hundreds of thousands of Model 3s is seen as necessary because it could bring battery costs closer in line with conventional engines.
An electric car can cost upward of $10,000 more than its conventional counterpart, and analysts say it could take nearly a decade to close the gap. Tesla, building its own batteries, could have disproportionate influence in bringing those costs down due to its deep experience, access to technical experts and considerable scale.
A year ago, Mr. Musk combined Tesla with SolarCity, a home-solar company that he served as chairman of at the time. Combining the two companies was designed to make Tesla a more diverse company focused on batteries, solar energy and automobiles. Other auto makers have scaled back on alternative business lines.
Mr. Musk runs several ventures outside of the car business, including Space Exploration Technologies Corp. He is a major backer of those companies, with shares in some being used as collateral for personal loans used to buy even more stock in the companies he runs.
Bond investors are eager for new deals because there has been little supply in recent months due to a slowdown in mergers and acquisitions, which are usually funded with junk bonds. High-yield companies issued $9 billion of new bonds in July, the lowest amount since January 2016, according to Dealogic, when collapsing oil prices caused junk-debt markets to shut down.
"There hasn't been much new supply and investors have cash they need to spend," said Tom O'Reilly, head of non-investment-grade credit for Neuberger Berman Group LLC, who says he won't participate in the sale. "As a new borrower, that's going to play to your advantage."
The bond sale also comes during a summer slowdown in corporate-debt offerings, which some fund managers said could produce favorable terms for Tesla among investors hungry for new bonds. Yet several prospective buyers said they remain leery of lending to a company that loses billions and has one of the lowest-possible credit ratings.
Credit: By Matt Wirz and John D. Stoll
Subject: Automobile industry; Electric vehicles; Automobile production; Bond issues
Location: United States--US
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2017
Publication date: Aug 8, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1926834663
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1926834663?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Who Wants to Buy a Tesla Bond? Deal's proposed yield of 5.25% is low considering company's junk rating
Author: Wirz, Matt; Goldfarb, Sam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Aug 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla has raised billions of dollars in equity by selling stock investors a story of unlimited growth. Now they're hoping the same playbook will work with bond investors .
It's not yet clear how effective the approach will be. The deal is being proposed at a yield of 5.25%, low considering the company's junk rating. That reflects investors' willingness to accept modest yields in a market starved for new deals, but some are concerned about the company's losses and aggressive financial projections.
Although the electric car maker's stock could produce high returns if Tesla succeeds in competing with conventional auto makers, bondholders will only collect interest on their investments and could be wiped out if the company flops. That capped return means potential bond buyers are focused mostly on the risk the company won't repay them.
"This is basically an equity story," said Michael Cazayoux, a high yield analyst at KDP Asset Management. "The bond market is more of a professional market and we're looking at it from credit metrics."
Debt investors who have heard Tesla's pitch for the eight-year, $1.5 billion unsecured bond this week say it is a little different than the normal one they get from potential borrowers. Executives and bankers have focused on Tesla's near-$60 billion market value and lofty ambitions while placing less emphasis on the details of its actual financial performance.
Trying to assuage investors' concerns during a meeting in Manhattan on Monday, Chief Executive Elon Musk compared the Tesla's near-term production challenges to sausage-making, saying a somewhat ugly process would ultimately pay dividends.
Tesla's leadership in the electronic vehicle industry and its status as the most-valuable U.S. auto maker are both factors that will help some bond buyers overlook the company's lack of profitability, some fund managers said. And the bond deal is small enough that underwriter Goldman Sachs Group Inc. is expected to find buyers for it, especially given this summer's scarcity of other new bond sales in the market.
The trouble for bond analysts evaluating Tesla is the uncertainty about when the company will start making cash rather than spending it. The firm had about $3 billion of cash in June--and would increase that by 50% with the bond offering--but is projected to spend $2 billion in the second half of 2017.
"The early-stage nature of Tesla makes it something we're not interested in," says William Zox, chief investment officer at mutual-fund firm Diamond Hill Capital Management Inc.
The cash burn is likely to continue throughout next year and the company could return to bond markets for more funds to pay for its new product line, the moderately priced Model 3 , says Nishit Madlani, an analyst for S&P Global Ratings, which rates the company B-minus. Tesla's leverage, a risk measure that compares debt to earnings before interest, tax, depreciation and amortization, is about six times but will likely rise to eight times by the end of the year, Mr. Madlani said.
Tesla is burning through cash at a rapid pace to ramp up production before traditional auto makers catch up. That means the company is likely to keep issuing junk bonds in coming years to keep growing and subsequent debt sales could be harder to place, fund managers say. The more debt the company takes on, the riskier the investment becomes for bondholders and Tesla has already borrowed $4.5 billion of loans that would rank ahead of the bonds if the company ever defaulted.
Debt markets are typically inhospitable to startup ventures because bond investors put a priority on getting repaid on a fixed schedule, something nascent companies can rarely guarantee. The mass bankruptcies of startup telecommunications companies like Global Crossing Ltd. and Iridium Communications Inc. that borrowed tens of billions of dollars of junk debt in the 1990s serve as cautionary tales for many fund managers.
Write to Matt Wirz at matthieu.wirz@wsj.com and Sam Goldfarb at sam.goldfarb@wsj.com
READ MORE
* Skepticism Mounts on Junk Bonds
* Heard On The Street: Tesla's Big Reveal Shows a Rough Road Ahead
* Tesla's Second-Quarter Sales Hit by Production Shortfall
Credit: By Matt Wirz and Sam Goldfarb
Subject: Bond markets; Bond issues; Startups; Executives
Location: United States--US
People: Musk, Elon
Company / organization: Name: Diamond Hill Capital Management; NAICS: 523920; Name: KDP Asset Management; NAICS: 523930; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Aug 9, 2017
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1927123639
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1927123639?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Tests Its Story in the Bond Market
Author: Wirz, Matt; Goldfarb, Sam
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 Aug 2017: B.1.
ProQuest document link
Abstract:
Trying to assuage investors' concerns during a meeting in Manhattan on Monday, Chief Executive Elon Musk compared the Tesla's near-term production challenges to sausage-making, saying a somewhat ugly process would ultimately pay dividends. Tesla's leadership in the electric-vehicle industry and its status as the most valuable U.S. auto maker are both factors that will help some bond buyers overlook the company's lack of profitability, some fund managers said. [...]the bond deal is small enough that underwriter Goldman Sachs Group Inc. is expected to find buyers for it, especially given this summer's scarcity of other new bond sales in the market. "The early-stage nature of Tesla makes it something we're not interested in," says William Zox, chief investment officer at mutual-fund firm Diamond Hill Capital Management Inc. The cash burn is likely to continue throughout next year and the company could return to bond markets for more funds to pay for its new product line, the moderately priced Model 3, says Nishit Madlani, an analyst for S&P Global Ratings, which rates the company B-minus.
Full text: Tesla Inc. has raised billions of dollars in equity by selling stock investors a story of unlimited growth. Now the company is hoping the same playbook will work with bond investors.
It isn't yet clear how effective the approach will be. The deal is being proposed at a yield of 5.25%, low considering the company's junk rating. That reflects investors' willingness to accept modest yields in a market starved for new deals, but some are concerned about the company's losses and aggressive financial projections.
Although the electric-car maker's stock could produce high returns if Tesla succeeds in competing with conventional auto makers, bondholders will only collect interest on their investments and could be wiped out if the company flops.
That capped return means potential bond buyers are focused mostly on the risk the company won't repay them.
"This is basically an equity story," said Michael Cazayoux, a high yield analyst at KDP Asset Management. "The bond market is more of a professional market and we're looking at it from credit metrics."
Debt investors who have heard Tesla's pitch for the eight-year, $1.5 billion unsecured bond this week say it is a little different than the normal one they get from potential borrowers.
Executives and bankers have focused on Tesla's nearly $60 billion market value and lofty ambitions while placing less emphasis on the details of its actual financial performance.
Trying to assuage investors' concerns during a meeting in Manhattan on Monday, Chief Executive Elon Musk compared the Tesla's near-term production challenges to sausage-making, saying a somewhat ugly process would ultimately pay dividends.
Tesla's leadership in the electric-vehicle industry and its status as the most valuable U.S. auto maker are both factors that will help some bond buyers overlook the company's lack of profitability, some fund managers said. And the bond deal is small enough that underwriter Goldman Sachs Group Inc. is expected to find buyers for it, especially given this summer's scarcity of other new bond sales in the market.
The trouble for bond analysts evaluating Tesla is the uncertainty about when the company will start making cash rather than spending it. The firm had about $3 billion of cash in June -- and would increase that by 50% with the bond offering -- but is projected to spend $2 billion in the second half of 2017.
"The early-stage nature of Tesla makes it something we're not interested in," says William Zox, chief investment officer at mutual-fund firm Diamond Hill Capital Management Inc.
The cash burn is likely to continue throughout next year and the company could return to bond markets for more funds to pay for its new product line, the moderately priced Model 3, says Nishit Madlani, an analyst for S&P Global Ratings, which rates the company B-minus.
Tesla's leverage, a risk measure that compares debt to earnings before interest, taxes, depreciation and amortization, is about six times but will likely rise to eight times by the end of the year, Mr. Madlani said.
Tesla is burning through cash at a rapid pace to ramp up production before traditional auto makers catch up. That means the company is likely to keep issuing junk bonds in coming years to keep growing, and subsequent debt sales could be harder to place, fund managers say.
The more debt the company takes on, the riskier the investment becomes for bondholders and Tesla has already borrowed $4.5 billion of loans that would rank ahead of the bonds if the company ever defaulted.
Credit: By Matt Wirz and Sam Goldfarb
Subject: Bond markets; Bond issues
Location: United States--US
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2017
Publication date: Aug 10, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1927381102
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1927381102?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla's First-Ever Sale of Traditional Bonds Upsized on Strong Demand; It sells $1.8 billion of bonds at yield of 5.3%, a sign of investors' appetite for corporate debt
Author: Goldfarb, Sam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Aug 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. sold traditional bonds for the first time Friday, opening a new path to raising cash as it pursues its ambitious effort to compete with more established auto makers.
The electric-car maker said it sold $1.8 billion of bonds at a 5.3% yield. Tesla had initially proposed selling $1.5 billion of the eight-year, unsecured bonds at 5.25% but met enough demand to increase the size of the deal, according to people familiar with the deal.
The yield, which is below-average for Tesla's credit rating , marks a vote of confidence in the electric-car company and another sign of investors' appetite for corporate debt at a time when government bonds provide meager returns.
For all of Tesla's success in the stock market--its shares are up more than 1,000% in the past five years--the company isn't a typical corporate bond issuer. A main selling point is Tesla's potential to reshape the auto industry as the first mass producer of electric cars. But Tesla still burned more than $1 billion last quarter alone and likely will need to raise more money from investors in the coming years.
While Tesla's growth story has been integral to its stock gains, debt investors are generally more interested in businesses that produce stable cash flow that can be used to make interest payments. Tesla's bonds are rated B3 by Moody's Investors Service, six notches below investment grade.
Several bond investors compared Tesla to Netflix Inc., another tech pioneer with negative cash flow, rather than other car companies. That worked in Tesla's favor, as Netflix bonds due in 2026 traded recently around 4.6%, below the initial yield for Tesla's new bonds.
Investors have taken comfort in Tesla's near-$60 billion market capitalization. That implies the company is worth well more than its debt, which should now top $8 billion. Many see a path to profitability for Tesla, given signs of strong early demand for the Model 3 and its leading position in the electric-car market, which some see as the future of the auto industry.
"They are at the right place at the right time with the right product," Hitin Anand, senior analyst at the research firm CreditSights.
The company also benefited from favorable borrowing conditions. Investors have been scooping up junk-rated corporate debt ever since fears of a recession faded in early 2016, dragging the average yield on the bonds down to around 5.7% from 10% two winters ago, according to Bloomberg Barclays data.
Despite the low yields on offer, new issuance of junk bonds has been slow of late, partly because companies have preferred to borrow in the loan market, which offers them more flexibility to refinance their debt. That has left investors searching for bonds to buy.
Write to Sam Goldfarb at sam.goldfarb@wsj.com
READ MORE
* Tesla, on a Hot Streak, Passes Ford in Investor Value
* Heard On The Street: Cash-Hungry Tesla's Missed Opportunity
* Tesla's Second-Quarter Sales Hit by Production Shortfall
Credit: By Sam Goldfarb
Subject: Automobile industry
Location: Palo Alto California
Company / organization: Name: Goldman Sachs Group Inc; NAICS: 523110, 523120; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Aug 11, 2017
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1927866522
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1927866522?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Finance & Markets: Tesla Increases Size of First Traditional Bond on Strong Demand
Author: Goldfarb, Sam
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Aug 2017: B.9.
ProQuest document link
Abstract:
The yield, which is below-average for Tesla's credit rating, marks a vote of confidence in the electric-car company and another sign of investors' appetite for corporate debt when government bonds provide meager returns.Tesla's bonds are rated B3 by Moody's Investors Service, six notches below investment grade.
Full text: Tesla Inc. sold traditional bonds for the first time Friday, opening a new path to raising cash as it pursues its ambitious effort to compete with more-established auto makers.
The electric-car maker said it sold $1.8 billion of bonds at a 5.3% yield. The company had initially proposed selling $1.5 billion of the eight-year, unsecured bonds at 5.25% but met enough demand to increase the size of the offering, according to people familiar with the deal.
The yield, which is below-average for Tesla's credit rating, marks a vote of confidence in the electric-car company and another sign of investors' appetite for corporate debt when government bonds provide meager returns.
Tesla's bonds are rated B3 by Moody's Investors Service, six notches below investment grade.
Credit: By Sam Goldfarb
Subject: Bond issues; Government bonds; International finance
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.9
Publication year: 2017
Publication date: Aug 12, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1927947669
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1927947669?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Bonds Tumble in Sign of Concern Over Finances; The price has dropped to 97.75 cents on the dollar in recent trading, pushing up the yield
Author: Wirz, Matt
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Aug 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc.'s first bonds have fallen more than 2% in price since their issuance 10 days ago, the latest sign of Wall Street's ambivalence over the electric-car maker's prospects.
The Palo Alto, Calif., company sold $1.8 billion of low-rated bonds on Aug. 11 to help pay for the Model 3, its first mass-market car. Tesla took advantage of investors' thirst for higher-yielding securities, selling debt at an annual yield of 5.3%--more than 3 percentage points above comparable Treasurys.
But many investors sat out the deal, questioning the wisdom of buying bonds from a company that hasn't turned an annual profit and is drastically increasing its spending in a bid to break into the capital-intensive auto market.
"God love them, they took advantage of a super strong market to get super low financing," says Jack Flaherty, a bond portfolio manager at GAM Holdings AG who did not buy the new deal.
A spokesman for Tesla declined to comment.
The price of the bond has dropped to 97.75 cents on the dollar in recent trading, pushing the yield up to 5.65%, according to data from MarketAxess. Bond yields rise when prices fall.
Trading has been heavy: Tesla bonds were the most actively traded junk bonds Monday with about $92 million of the debt trading hands, according to MarketAxess.
The bonds are being closely watched by investors because Tesla has become a stock-market favorite . Tesla shares are up 58% this year despite a 2.8% decline Monday.
The firm up until this month had never issued traditional bonds that must be paid off at maturity. Instead Tesla has raised $6 billion by selling shares or bonds convertible into stock.
Many high-yield bond prices fell last week as investors pulled about $1 billion from the market, according to Thomson Reuters Lipper data. Tesla bonds declined more than similarly rated ones because they pay less interest, investors said.
"It's more attractive now but it's not a level I'm willing to step into yet," Mr. Flaherty said.
Charley Grant and Sam Goldfarb contributed to this article.
Write to Matt Wirz at matthieu.wirz@wsj.com
READ MORE
* Who Wants to Buy a Tesla Bond?
* Tesla's Second-Quarter Sales Hit by Production Shortfall
* Tesla Model 3 Test Drive: Car Has Bite and Simple Interior
Credit: By Matt Wirz
Subject: Investments; Bond markets; Bond issues; Bond portfolios
Location: Palo Alto California
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Aug 21, 2017
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1930558952
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1930558952?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Bonds Fall on Investors' Concerns
Author: Wirz, Matt
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]22 Aug 2017: B.1.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc.'s first bonds have fallen more than 2% in price since their issuance 10 days ago, a sign of Wall Street's ambivalence over the electric-car maker.
The Palo Alto, Calif., company sold $1.8 billion of low-rated bonds on Aug. 11 to help pay for the Model 3, its first mass-market car.
Tesla took advantage of investors' thirst for higher-yielding securities, selling debt at an annual yield of 5.3% -- more than 3 percentage points above comparable Treasurys.
Many investors sat out the deal, questioning the wisdom of buying bonds from a company that hasn't turned an annual profit and is drastically increasing its spending in a bid to break into the capital-intensive auto market.
"God love them, they took advantage of a super strong market to get superlow financing," said Jack Flaherty, a bond portfolio manager at GAM Holdings AG who didn't buy into the new deal.
A spokesman for Tesla declined to comment.
The price of the bond dropped to 97.63 cents on the dollar in late Monday trading, pushing the yield up to 5.65%, according to data from MarketAxess. Bond yields rise when prices fall.
Trading has been heavy. Tesla bonds were the most actively traded junk bonds Monday, with about $96 million of the debt changing hands, according to MarketAxess.
The bonds are being closely watched by investors because Tesla has become a stock-market favorite.
Tesla shares are up 58% this year despite a 2.8% decline Monday.
The company until this month had never issued traditional bonds that must be paid off at maturity. Instead Tesla has raised $6 billion by selling shares or bonds convertible into stock.
Many high-yield bond prices fell last week, as investors pulled about $1 billion from junk-bond funds, according to Thomson Reuters Lipper data.
Investors cited a perception that uncertainty tied to policies in Washington and events around the globe has been rising.
The average yield of corporate bonds rated single-B was unchanged last week, according to the Bloomberg Barclays U.S. High Yield Index.
Tesla bonds declined more than similarly rated ones because they pay less interest, investors said, though a person familiar with the Tesla bond sale pointed out that some other recent bond issues have also declined.
"It's more attractive now, but it's not a level I'm willing to step into yet," Mr. Flaherty said.
---
Charley Grant and Sam Goldfarb contributed to this article.
Credit: By Matt Wirz
Subject: Bond markets; Bond issues
Location: United States--US Palo Alto California
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2017
Publication date: Aug 22, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1930699613
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1930699613?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla's Push to Build a Self-Driving Car Sparked Dissent Among Its Engineers; Elon Musk's ambitious goals for Autopilot technology have prompted safety warnings and resignations
Author: Dugan, Ianthe Jeanne; Spector, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Aug 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: PALO ALTO, Calif.--Tesla Inc. Chief Executive Elon Musk jolted the automotive world last year when he announced the company's new vehicles would come with a hardware upgrade that would eventually allow them to drive themselves.
He also jolted his own engineering ranks.
Members of the company's Autopilot team hadn't yet designed a product they believed would safely and reliably control a car without human intervention, according to people familiar with the matter.
In a meeting after the October announcement, someone asked Autopilot director Sterling Anderson how Tesla could brand the product "Full Self-Driving," several employees recall. "This was Elon's decision," they said he responded. Two months later, Mr. Anderson resigned.
In the race to develop autonomous vehicles, few companies have moved faster than Tesla, an electric-car pioneer that this year surpassed General Motors Co. as the nation's most-valuable auto maker.
Behind the scenes, the Autopilot team has clashed over deadlines and design and marketing decisions, according to more than a dozen people who worked on the project and documents reviewed by The Wall Street Journal. In recent months, the team has lost at least 10 engineers and four top managers--including Mr. Anderson's successor, who lasted less than six months before leaving in June.
Tesla said the vehicle hardware unveiled in October will enable "full self-driving in almost all circumstances, at what we believe will be a probability of safety at least twice as good as the average human driver." The self-driving feature is subject to software development and regulatory approval, and "it is not possible to know exactly when each element of the functionality described" will be available, Tesla noted.
A Tesla spokeswoman attributed the turnover in the Autopilot group--which has more than 100 people developing hardware and software--to fierce competition for talent at large technology companies, conventional auto makers and startups. Tesla has hired more than 35 people to join its Autopilot group so far this year, and brought on more than 50 in 2016.
In an email, Mr. Musk said he was unhappy with previous Journal articles on the company. "While it is possible that this article could be an exception, that is extremely unlikely, which is why I declined to comment," he wrote.
The hurdles to putting self-driving cars on the road on a mass scale are huge, but so are the potential rewards. Advocates say autonomous cars will help minimize congestion and pollution--and would likely make automobile travel much safer. Human error causes 94% of crashes, according to government statistics.
Companies working on self-driving technology--ranging from Ford Motor Co. and GM to Alphabet Inc.'s Waymo LLC and ride-hailing firms such as Uber Technologies Inc.--are dealing with a tricky balance. If they make their technology too proficient, drivers may be tempted to stop paying attention or take their hands off the wheel. Automobiles that drive themselves under all circumstances face more testing and government review. Most companies are initially releasing either semi-automated vehicles that require engaged drivers or autonomous cars that operate under restricted conditions.
Tesla decided to introduce semi-autonomous technology rather than wait because "when used correctly, it is already significantly safer than a person driving by themselves and it would therefore be morally reprehensible to delay release simply for fear of bad press or some mercantile calculation of legal liability," Mr. Musk said last year.
Mr. Musk has positioned himself as a disruptive force across industries. The South African-born engineer, who made more than $100 million on an early investment in PayPal Inc., is chief executive of Space Exploration Technologies Corp., or SpaceX, which aims to colonize Mars. He said he is building a "Hyperloop" that will whisk commuters from New York to Washington in 29 minutes. In July, Mr. Musk announced Tesla is building the world's largest lithium-ion battery storage project in Australia.
"Elon's world is a tough world, and that's fine with me," said Ross Gerber, chief executive at Gerber Kawasaki Wealth & Investment Management in Santa Monica, Calif. "They're hard-charging, trying to change the world. That's why I invest in them."
Tesla's board includes James Murdoch, the chief executive of 21st Century Fox, which shares common ownership with Wall Street Journal parent News Corp.
Mr. Musk, who is 46 years old, became chief executive of Tesla in 2008, the year the startup produced its first electric sports car, the Roadster. He gained a reputation for working around the clock, sometimes spending the night on the factory floor.
In October 2014, Tesla introduced hardware and later added software updates that enabled capabilities such as automatic emergency braking and a collision-warning system--features some rival car makers had also begun incorporating.
Tesla engineers were already hard at work on a breakthrough intended to propel the company closer to the industrywide Holy Grail: putting a driverless car on the road.
Tesla dubbed its project "Autopilot," after the technology that aids airplane pilots. In 2015, Tesla hired Robert Rose, a former software engineer at SpaceX, to run the Autopilot group.
The pressure was high to get testing done and develop the product. In a 2015 email, Mr. Rose urged engineers to get started on validating the technology, or to proving it works in tests, "RTFN"--right the f-- now.
Some engineers and suppliers pushed back. Issues they debated included the amount of time a driver would be given to retake the wheel if a car's autonomous driving features stopped working; mechanisms to keep drivers engaged; and whether the technology should be allowed on all roads.
Weeks before the October 2015 release of Autopilot, an engineer who had worked on safety features warned Tesla that the product wasn't ready, according to a resignation letter circulated to other employees and reviewed by the Journal.
Autopilot's development was based on "reckless decision making that has potentially put customer lives at risk," the engineer, Evan Nakano, wrote.
Tesla declined to comment specifically on Mr. Nakano. "We actively encourage development teams and suppliers to highlight concerns and issues so that they can be comprehensively addressed during development," a spokeswoman said.
Tesla said it based its design on millions of miles driven by employees and other early testers, followed by performance validation over millions of additional miles. It said Autopilot has been tested over more than 1 billion miles.
At least one early test drive was harrowing. In May 2015, Eric Meadows, then a Tesla engineer, engaged Autopilot on a drive in a Model S from San Francisco to Los Angeles. Cruising along Highway 1, the car jerked left toward oncoming traffic. He yelped and steered back on course, according to his account and a video of the incident.
On the same trip, he said police pulled him over for suspected drunk driving. He said he was sober and shot an email warning colleagues, "Do not use Autopilot this weekend."
Mr. Meadows said he was later dismissed for what he was told were "performance issues." Tesla declined to comment on Mr. Meadows but noted that the incident happened months before the release of the technology, giving the company plenty of time to work out problems that had been discovered during test drives.
As the team ironed out the technology, some enlisted the help of suppliers to settle disagreements. One engineer contacted Mobileye NV, the Israel-based company that made Autopilot's cameras, and expressed fear that the equipment could be unsafe if used by drivers who weren't fully engaged, according to people familiar with the matter. Mobileye Chairman Amnon Shashua contacted Tesla in May 2015 and was reassured that the technology would be deployed safely, according to a Mobileye securities filing.
As the release approached in October 2015, however, a Tesla engineer reported to Mobileye that the product was being released in a way that would allow the car to drive itself without hands on the wheel. Mr. Shashua flew to California and suggested precautions, a person familiar with the matter said.
Mr. Musk said "activation of Autopilot would be 'hands-on,' " Mobileye said in the securities filing. "Despite this confirmation, Autopilot was rolled out in late 2015 with a hands-free activation mode."
Tesla said drivers were "responsible for, and ultimately in control of, the car," when it rolled out Autopilot.
Tesla owners' manuals describe Autopilot as a collection of "driver assistance features" and note that motorists are responsible for staying alert, maintaining control of the vehicle and driving safely. The initial version of Autopilot warned drivers to retake the wheel if their hands weren't detected.
Debates raged industrywide, as car makers and tech companies balanced technological advances that boost safety with the potential for dangerous misuse by drivers.
"This is the worst subject in the world to be adventurous with," said Scott Keogh, Audi AG's top U.S. executive, in an interview. The luxury auto maker plans to roll out fully self-driving cars in 2020.
Alphabet's Waymo decided its autonomous system should be free from human interaction partly after its own employees using automated-driving technology became overconfident, engaging in dangerous behaviors such as taking their eyes off the road and reaching for briefcases.
"They were just human," said John Krafcik, Waymo's chief executive, speaking at a January automotive conference in Detroit. "They began to trust the technology."
Shortly before the release of Autopilot in October 2015, Mr. Rose left the company. Tesla said Mr. Rose's departure wasn't due to any disagreement involving Autopilot but declined to elaborate further.
Mr. Anderson stepped into the job. A Ph.D. from Massachusetts Institute of Technology with a string of patents and papers on autonomous technology, he had helped launch the Model X.
Under Mr. Anderson's leadership, engineers continued working on Autopilot improvements and other self-driving technology advances. They also had to deal with dark periods.
In May 2016, Joshua Brown, a former Navy Seal, activated the Autopilot system in his Tesla Model S while driving on a Florida highway. Autopilot didn't see an 18-wheel truck crossing the road against a brightly lit sky, Tesla said. The vehicles collided and Mr. Brown was killed.
The following month, U.S. National Highway Traffic Safety Administration officials alerted Tesla that they were about to publicly disclose they were investigating Autopilot. During a conference call, Mr. Musk complained they were unfairly singling out Tesla for one incident when traffic fatalities claimed tens of thousands of lives annually in other companies' vehicles, said people familiar with the exchange.
In September 2016, Tesla upgraded the system. It disabled automatic steering, preventing reactivation until the vehicle is parked, if a driver ignores repeated warnings to keep hands on the wheel. Mr. Musk said the update's enhanced radar likely would have prevented the crash.
Mobileye and Tesla parted ways and Mobileye made public its concerns. Tesla said Mobileye had promoted the technology until Tesla began building competing equipment in-house, an account Mobileye disputes. Intel Corp. reached a $15.3 billion deal to buy Mobileye earlier this year, joining the driverless car race.
In January, U.S. traffic safety regulators closed their investigation into the May 2016 fatal crash, noting: "A safety-related defect trend has not been identified at this time and further examination of this issue does not appear to be warranted." The probe found the truck should have been visible to Mr. Brown for at least seven seconds before the collision, and that Tesla made an effort during the design process to prevent drivers from misusing Autopilot. The investigation also found the rate of Tesla vehicles crashing had fallen nearly 40% since the company installed its automatic steering feature.
Still, regulators expressed worries about how automated-driving technologies are being marketed.
"We are concerned about drivers operating these vehicles having a good understanding of the capabilities and limitations of the systems," then-NHTSA spokesman Bryan Thomas said at the time. "It's not enough to put it in an owners' manual and hope that drivers will read that and follow it."
In October 2016, Tesla announced an upgrade of Autopilot. All new vehicles were being built with eight cameras that provide 360-degree visibility at up to 820 feet of distance. Tesla vehicles previously featured just one forward-looking camera, as well as a forward radar and 12 long-range ultrasonic sensors positioned to see 16 feet around the car in every direction.
The new cars still come with just one radar sensor, but it has enhanced processing to provide additional data about the driver's surroundings. The radar can see through heavy rain, fog, dust, and even a car in front of it, according to Tesla.
Tesla also said it updated the cars' 12 ultrasonic sensors to improve the distance at which they can detect hard and soft objects.
For $5,000, Tesla customers can buy an option called "Enhanced Autopilot." That, Tesla said, would give them access to four of the car's eight cameras as well as the radar, 12 sensors, and the new onboard computing system.
For another $3,000, drivers get the right to activate the rest of the cameras when Tesla enables a full self-driving system. Customers could wait to buy the option, but it would be more expensive.
The announcement shook up some engineers, because they believed that the product that was released wasn't designed to be self-driving, according to several people interviewed.
The marketing was a factor in the decision by Mr. Anderson and at least two other engineers to leave the company, according to people familiar with the matter.
Mr. Anderson in December launched his own company, Aurora Innovation, with Chris Urmson, the former head of Google's autonomous driving team. In a blog post, Mr. Anderson said the new company is developing self-driving technology "the right way."
Buoyed in part by the promise of autonomous-technology enhancements, Tesla delivered more than 47,000 vehicles in the first half of this year.
In August, Tesla confirmed a new upgrade to its latest Autopilot hardware.
By the end of this year, Mr. Musk plans to demonstrate a car driving itself from Los Angeles to New York.
Lisa Schwartz and Jim Oberman contributed to this article
Credit: By Ianthe Jeanne Dugan and Mike Spector
Subject: Automobile industry; Design; Cameras; Automation; Startups; Regulatory approval; Sensors; Decision making; Engineers; Vehicles
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Aug 24, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1931698053
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1931698053?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Self-Driving Push Divided Tesla Ranks --- Some engineers warned on safety, resigned
Author: Dugan, Ianthe Jeanne; Spector, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]25 Aug 2017: A.1.
ProQuest document link
Abstract: None available.
Full text: PALO ALTO, Calif. -- Tesla Inc. Chief Executive Elon Musk jolted the automotive world last year when he announced the company's new vehicles would come with a hardware upgrade that would eventually allow them to drive themselves.
He also jolted his own engineering ranks.
Members of the company's Autopilot team hadn't yet designed a product they believed would safely and reliably control a car without human intervention, according to people familiar with the matter.
In a meeting after the October announcement, someone asked Autopilot director Sterling Anderson how Tesla could brand the product "Full Self-Driving," several employees recall. "This was Elon's decision," they said he responded. Two months later, Mr. Anderson resigned.
In the race to develop autonomous vehicles, few companies have moved faster than Tesla, an electric-car pioneer that this year surpassed General Motors Co. as the nation's most-valuable auto maker.
Behind the scenes, the Autopilot team has clashed over deadlines and design and marketing decisions, according to more than a dozen people who worked on the project and documents reviewed by The Wall Street Journal. In recent months, the team has lost at least 10 engineers and four top managers -- including Mr. Anderson's successor, who lasted less than six months before leaving in June.
Tesla said the vehicle hardware unveiled in October will enable "full self-driving in almost all circumstances, at what we believe will be a probability of safety at least twice as good as the average human driver." The self-driving feature is subject to software development and regulatory approval, and "it is not possible to know exactly when each element of the functionality described" will be available, Tesla noted.
A Tesla spokeswoman attributed the turnover in the Autopilot group -- which has more than 100 people developing hardware and software -- to fierce competition for talent at large technology companies, conventional auto makers and startups. Tesla has hired more than 35 people to join its Autopilot group so far this year, and brought on more than 50 in 2016.
In an email, Mr. Musk said he was unhappy with previous Journal articles on the company. "While it is possible that this article could be an exception, that is extremely unlikely, which is why I declined to comment," he wrote.
The hurdles to putting self-driving cars on the road on a mass scale are huge, but so are the potential rewards. Advocates say autonomous cars will help minimize congestion and pollution -- and would likely make automobile travel much safer. Human error causes 94% of crashes, according to government statistics.
Companies working on self-driving technology -- ranging from Ford Motor Co. and GM to Alphabet Inc.'s Waymo LLC and ride-hailing firms such as Uber Technologies Inc. -- are dealing with a tricky balance. If they make their technology too proficient, drivers may be tempted to stop paying attention or take their hands off the wheel. Automobiles that drive themselves under all circumstances face more testing and government review.
Tesla decided to introduce semiautonomous technology rather than wait because "when used correctly, it is already significantly safer than a person driving by themselves and it would therefore be morally reprehensible to delay release simply for fear of bad press or some mercantile calculation of legal liability," Mr. Musk said last year.
Mr. Musk has positioned himself as a disruptive force across industries. The South African-born engineer, who made more than $100 million on an early investment in PayPal Inc., is chief executive of Space Exploration Technologies Corp., or SpaceX, which aims to colonize Mars. He said he is building a "Hyperloop" that will whisk commuters from New York to Washington in 29 minutes. In July, Mr. Musk announced Tesla is building the world's largest lithium-ion battery storage project in Australia.
"Elon's world is a tough world, and that's fine with me," said Ross Gerber, chief executive at Gerber Kawasaki Wealth & Investment Management in Santa Monica, Calif. "They're hard-charging, trying to change the world. That's why I invest in them."
Tesla's board includes James Murdoch, the chief executive of 21st Century Fox, which shares common ownership with Wall Street Journal parent News Corp.
Mr. Musk, who is 46 years old, became chief executive of Tesla in 2008, the year the startup produced its first electric sports car, the Roadster. He gained a reputation for working around the clock, sometimes spending the night on the factory floor.
In October 2014, Tesla introduced hardware and later added software updates that enabled capabilities such as automatic emergency braking and a collision-warning system -- features some rival car makers had also begun incorporating.
Tesla engineers were already hard at work on a breakthrough intended to propel the company closer to the industrywide Holy Grail: putting a driverless car on the road.
Tesla dubbed its project "Autopilot," after the technology that aids airplane pilots. In 2015, Tesla hired Robert Rose, a former software engineer at SpaceX, to run the Autopilot group.
The pressure was high to get testing done. In a 2015 email, Mr. Rose urged engineers to get started on validating the technology, or to proving it works in tests, "RTFN" -- right the f--- now.
Some engineers and suppliers pushed back. Issues they debated included the amount of time a driver would be given to retake the wheel if a car's autonomous driving features stopped working; mechanisms to keep drivers engaged; and whether the technology should be allowed on all roads.
Weeks before the October 2015 release of Autopilot, an engineer who had worked on safety features warned Tesla that the product wasn't ready, according to a resignation letter circulated to other employees and reviewed by the Journal.
Autopilot's development was based on "reckless decision making that has potentially put customer lives at risk," the engineer, Evan Nakano, wrote.
Tesla declined to comment specifically on Mr. Nakano. "We actively encourage development teams and suppliers to highlight concerns and issues so that they can be comprehensively addressed during development," a spokeswoman said.
Tesla said it based its design on millions of miles driven by employees and other early testers, followed by performance validation. It said Autopilot has been tested over more than 1 billion miles.
At least one early test drive was harrowing. In May 2015, Eric Meadows, then a Tesla engineer, engaged Autopilot on a drive in a Model S from San Francisco to Los Angeles. Cruising along Highway 1, the car jerked left toward oncoming traffic. He yelped and steered back on course.
On the same trip, he said police pulled him over for suspected drunk driving. He said he was sober and shot an email warning colleagues, "Do not use Autopilot this weekend."
Mr. Meadows said he was later dismissed for what he was told were "performance issues." Tesla declined to comment on Mr. Meadows but noted that the incident happened months before the release of the technology, giving the company plenty of time to work out problems that had been discovered during test drives.
As the team ironed out the technology, some enlisted the help of suppliers to settle disagreements. One engineer contacted Mobileye NV, the Israel-based company that made Autopilot's cameras, and expressed fear that the equipment could be unsafe if used by drivers who weren't fully engaged, according to people familiar with the matter. Mobileye Chairman Amnon Shashua contacted Tesla in May 2015 and was reassured that the technology would be deployed safely, according to a Mobileye securities filing.
As the release approached in October 2015, however, a Tesla engineer reported to Mobileye that the product was being released in a way that would allow the car to drive itself without hands on the wheel. Mr. Shashua flew to California and suggested precautions, a person familiar with the matter said.
Mr. Musk said "activation of Autopilot would be 'hands-on,'" Mobileye said in the securities filing. "Despite this confirmation, Autopilot was rolled out in late 2015 with a hands-free activation mode."
Tesla said drivers were "responsible for, and ultimately in control of, the car," when it rolled out Autopilot.
Tesla owners' manuals describe Autopilot as a collection of "driver assistance features" and note that motorists are responsible for staying alert, maintaining control of the vehicle and driving safely. The initial version of Autopilot warned drivers to retake the wheel if their hands weren't detected.
Debates raged industrywide, as car makers and tech companies balanced technological advances that boost safety with the potential for dangerous misuse by drivers.
"This is the worst subject in the world to be adventurous with," said Scott Keogh, Audi AG's top U.S. executive, in an interview.
Alphabet's Waymo decided its autonomous system should be free from human interaction partly after its own employees using automated-driving technology became overconfident, engaging in dangerous behaviors such as taking their eyes off the road.
"They were just human," said John Krafcik, Waymo's chief executive, speaking at a January automotive conference. "They began to trust the technology."
Shortly before the release of Autopilot in October 2015, Mr. Rose left the company. Tesla said Mr. Rose's departure wasn't due to any disagreement involving Autopilot but declined to elaborate further.
Mr. Anderson stepped into the job. A Ph.D. from Massachusetts Institute of Technology with a string of patents on autonomous technology, he had helped launch the Model X.
In May 2016, Joshua Brown, a former Navy SEAL, activated the Autopilot system in his Tesla Model S while driving on a Florida highway. Autopilot didn't see an 18-wheel truck crossing the road against a brightly lit sky, Tesla said. The vehicles collided and Mr. Brown was killed.
The following month, U.S. National Highway Traffic Safety Administration officials alerted Tesla that they were about to publicly disclose they were investigating Autopilot.
In September 2016, Tesla upgraded the system. It disabled automatic steering, preventing reactivation until the vehicle is parked, if a driver ignores repeated warnings to keep hands on the wheel. Mr. Musk said the update's enhanced radar likely would have prevented the crash.
Mobileye and Tesla parted ways and Mobileye made public its concerns. Tesla said Mobileye had promoted the technology until Tesla began building competing equipment in-house, an account Mobileye disputes. Intel Corp. reached a $15.3 billion deal to buy Mobileye earlier this year.
In January, U.S. traffic safety regulators closed their investigation into the May 2016 fatal crash, noting: "A safety-related defect trend has not been identified at this time and further examination of this issue does not appear to be warranted." The probe found the truck should have been visible to Mr. Brown for at least seven seconds before the collision, and that Tesla made an effort during the design process to prevent drivers from misusing Autopilot. The investigation also found the rate of Tesla vehicles crashing had fallen nearly 40% since the company installed its automatic steering feature.
Still, regulators expressed worries about how automated-driving technologies are being marketed.
"We are concerned about drivers operating these vehicles having a good understanding of the capabilities and limitations of the systems," then-NHTSA spokesman Bryan Thomas said at the time. "It's not enough to put it in an owners' manual and hope that drivers will read that and follow it."
In October 2016, Tesla announced an upgrade of Autopilot. All new vehicles were being built with eight cameras that provide 360-degree visibility at up to 820 feet of distance. Tesla vehicles previously featured just one forward-looking camera, as well as a forward radar and 12 long-range ultrasonic sensors positioned to see 16 feet around the car in every direction.
The new cars still come with just one radar sensor, but it has enhanced processing to provide additional data about the driver's surroundings. The radar can see through heavy rain, fog, dust, and even a car in front of it, according to Tesla.
Tesla also said it updated the cars' 12 ultrasonic sensors to improve the distance at which they can detect hard and soft objects.
For $5,000, Tesla customers can buy an option called "Enhanced Autopilot." That, Tesla said, would give them access to four of the car's eight cameras as well as the radar, 12 sensors, and the new onboard computing system.
For another $3,000, drivers get the right to activate the rest of the cameras when Tesla enables a full self-driving system. Customers could wait to buy the option, but it would be more expensive.
The marketing was a factor in the decision by Mr. Anderson and at least two other engineers to leave the company, according to people familiar with the matter.
---
Lisa Schwartz and Jim Oberman contributed to this article.
Credit: By Ianthe Jeanne Dugan and Mike Spector
Subject: Automobile industry; Engineers; Autonomous vehicles
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2017
Publication date: Aug 25, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1931957169
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1931957169?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
The Avant-Garde BMW i8: Bavaria's Answer to Tesla; Dan Neil plugs into the radical new--and exceedingly rare--BMW i8. Plus: A dash up the California coast in a cleverly transformed M4
Author: Neil, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Aug 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: I had seen shadowy figures loitering near the BMW i8 that was plugged in beside my house. They came by in the evening, usually in pairs, one tall--the dad or mom--and one small. Then I started getting jolly flash traffic from neighborhood parents. What is that thing?
It turns out that, from the eye level of a 6-year-old, BMW's techno-luxury statement car looks like Jackson Storm, the rival to Lightning McQueen in the movie "Cars 3." That BMW failed to exploit this accidental resemblance constitutes gross marketing malpractice, but let that go. The point is, for two weeks, I was King of the Dads.
You pinky-ringed minions of Babylon can ride around in your Ferraris and Lambos if you want. Kind of ordinary, though. For rarity, for sheer automotive rarefaction, the flagship of BMW's 2 billion-euro i Division makes those cars look like link sausage. BMW will sell only about 300 of these cars in the U.S. this year, though not for want of trying. It is, for starters, wildly expensive. Our black-and-blue tester cost $152,695, about the same as an Acura NSX, which on a racetrack would leave the i8 for dead, blackened, flyblown carrion. The i8 has charms other than raw performance, and for that price it bloody well ought to.
Here is a brief, real history of BMW's i Division. It was born in alarm and dismay at the turn of the decade, when German automakers got their first look at the Tesla Model S. They realized they had been out-engineered and they had guessed wrong on electrification. The i Division was set up to model--in technology, design and manufacturing--BMW's next chapter of sustainable, low-consumption, socially accountable transportation. But it was also a riposte, a fending off of Tesla.
The company even built a temple to its future: the assembly hall in Leipzig, Germany, with its grand concourse designed by Zaha Hadid. Here BMW deployed its visionary LifeDrive vehicle architecture. In an automotive-manufacturing first, the passenger safety cell, or tub, is fashioned from lightweight carbon fiber reinforced plastic in a beguilingly human-free process that takes hours instead of days. For anyone watching, and Germany's autoworkers certainly are, the i8 and sister car i3 preview the industry's radical and hastening automation.
If ever the i Division were merely a virtue-signaling pilot program with unserious volume expectations, Dieselgate put an end to that. The company has announced more than 40 new plug-in models, with the new iPerformance imprimatur.
No one in Munich actually knows how the Ultimate Driving Machine will weather the next decade. Everything that the future holds for automobility--connected, shared, self-driving, electric--sounds to traditionalists about as appealing as cat-food flavored toothpaste.
In this respect, the i8 is a rolling soul search, an experiment in brand. What are the tactile feedbacks, the synaptic connections, the satisfactions of a post-combustion era BMW? The i8's presentation to the driver is serenity by wire, cool and technical, infomatic-forward. You press the start button and instead of a quickening fire of combustion there's swooping electronic sound, an ear-icon. None of the familiar, the analogue remains.
Trickiest, philosophically, is the balance the i8 strikes between performance and efficiency--call it sufficiency of sportivity, a phrase for which there simply must be a compounded German word. Behind the seats is a tiny, purling 1.5-liter turbocharged three-cylinder gas engine and six-speed automatic transmission, producing 227 hp and 236 lb-feet of torque.
In the nose of the car is an AC synchronous electric motor (129 hp, 184 lb-ft of torque) driving the front wheels through a two-speed gearbox. When the hybrid chakras are aligned, the all-wheel drive system output is 357 hp and 420 lb-ft of torque, pitted against the car's dense 3,455 pounds.
Romp the e-throttle at a green light and the i8 will surge hummingly to 60 mph in 4.2 seconds, a syrupy squirt. If you give the car enough stick and enough runway, it will hit a top speed of 155 mph, says BMW. Once in a while you can hear the turbos chuff, but the engine growl filling the cabin is synthesized and pumped through the audio system speakers.
The i8 is certainly potent, responsive and refined. The dual-sourced powertrain is a minor miracle of hybrid integration. But the i8 is not particularly fast. It might be the slowest mid-engine carbon-bodied sports car with pain-in-the-ass doors I've ever driven.
And, as a sign of just how fast things move, this state-of-the-art machine is already a bit dated by its battery tech. With a usable capacity of about 5 kWh--roughly a third that of the pack in a Chevy Volt PHEV--the lithium-ion cells will carry the car only about 15 miles before the three-cylinder gas engine kicks in. To avoid tailpipe emissions I was plugging in three times a day.
The first-gen i3 also suffered from underperforming batteries. However, BMW increased the pack capacity 50%, to 33kWh. It's reasonable to expect these more energy-dense cells will turn up in the i8, perhaps as soon as December at the Los Angeles Auto Show, when BMW will unveil the i8 convertible.
You won't see one of those every day, if ever.
If the i8 is New School BMW, the M4 is the Old School. Actually, it's more like standardized testing, since the Bavarian's compact performance four-seater has been a perennial benchmark for spendthrift enthusiasts since the 1990s. And if you were to take a factory-fresh M4 for a rage up a canyon road you might ask yourself, "Could these cars get any better?" Yes, they could. All you need is (more) money and the name Steve Dinan.
Mr. Dinan's company has been pumping performance and pizazz into BMWs since the Carter Administration at its shop in Santa Clara County, Calif. And while I typically avoid aftermarket performance tuners and the evil they do, Mr. Dinan's work--notable for the balanced, thoughtful insanity of the cars--stands apart from the usual scoundrels. Note the factory-matching 4-year /50,000 mile warranty.
For a recent dash from San Francisco to Napa to Monterey and back, I borrowed a BMW M4 Dinan S2, which in tuner-speak means a Signature 2 (stage 2) package, with engine, suspension and cosmetic upgrades, totaling $13,282 above the cost of the donor M4 ($67,700).
The car that comes back from Dinan has been cured of itself in three distinct ways. First, sound: The intercooled/turbocharged S55 engine has a strained and hollow sound out of the box. Dinan's plumbers install a resonant stainless-steel exhaust system and, aft of the catalytic converters, a high-flow cross-pipe. The popping, can-full-of-bees din emerges from dual-quad exhaust tips the diameter of Crisco cans. Ungawa.
Second, power: The engine mods include an XXL cold-air intake, upsized charge-air intercooler, and a hot-rodded chip, adding 123 hp over the stock M4 for a total of 548 hp and 549 lb-ft of torque. Moreover, all this power hangs out at the screaming end of the tachometer, well over 4,000 rpm. So that cures whatever alleged lack of emotionalism the M4 suffers.
Steering sharpness and precision: Dinan's magic kit includes way stiff springs and dampers and hatefully stiff (optional) Pirelli P Zero Corsa tires that are a ballsy 10.5-inches wide at the rear. Critically, Dinan replaces all the rubber bushings with Teflon-coated machined ball joints, hardened housings, and billet aluminum rear toe links. The suspension mods make the Dinan drive hard and thrashy, stiff as a Bavarian buckboard. The road static in the steering wheel will make your hands tingle. The steering is as sensitive as sunburn.
Just the way I like it.
2017 BMW i8 PHEV
Parallel hybrid electric 2+2 luxury sports coupe
* Base price $143,400
* Price, as tested $152,695
* Powertrain gas-electric hybrid drive with mid-mounted turbocharged direct-injection 1.5-liter in-line three-cylinder engine (228 hp) and six-speed automatic transmission (rear wheel drive); front-mounted AC synchronous traction motor (129 hp) with two-speed gearbox; liquid-cooled 5.2 kWh nominal lithium-ion battery pack.
* Net system power/torque 357 hp/420 lb-ft
* Length/width/height/wheelbase 184.9/87.3/50.8/110.2 inches
* Curb weight 3,455 pounds
* 0-60 mph 4.2 seconds
* Top speed 155 mph
* Luggage capacity 4.7 cubic feet
2017 BMW M4 Dinan S2
Front-engine, rear drive four-seat compact coupe
* Price, as tested $80,892
* Powertrain turbocharge and intercooled 3.0-liter direct-injection inline six cylinder; seven-speed dual-clutch automatic transmission; rear-wheel drive.
* Power/torque 548 hp/549 lb-ft of torque
* Wheelbase/weight 110.7/3,900 pounds (est)
* 0-60 mph< 4 seconds
* Luggage capacity 11 cubic feet
Credit: By Dan Neil
Subject: Automobile industry; Product design; Sound
Location: California United States--US Bavaria Germany
People: Hadid, Zaha
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Aug 31, 2017
column: Rumble Seat
Section: Life
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1934094906
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1934094906?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Tesla Faces Complaint On Labor Practices
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]01 Sep 2017: B.3.
ProQuest document link
Abstract: None available.
Full text: The National Labor Relations Board filed a complaint Thursday against Tesla Inc. based on allegations of unfair labor practices from workers at the company's Fremont, Calif., factory.
The employees accuse Tesla of being required to sign overly broad nondisclosure agreements that prohibit them from raising safety concerns. They also allege the Silicon Valley electric-car maker harassed them during unionizing efforts.
A hearing before an administrative judge is scheduled for Nov. 14.
Tesla said the accusations in the complaint are without merit and accused the United Auto Workers union -- which has sought to organize employees in Fremont -- of filing complaints "only to generate headlines." Earlier this year, three workers and the union filed their claims with the NLRB against Tesla.
The NLRB complaint and brewing labor unrest at the Fremont factory threaten to disrupt Tesla just as it begins boosting production of the Model 3, a $35,000 all-electric sedan aimed at attracting more customers than its luxury cars and sport-utility vehicles that typically sell for about $100,000. Tesla Chief Executive Elon Musk cautioned in July that the effort to bring out the car would be "manufacturing hell" as the company learns to build the vehicle in large numbers.
In Thursday's complaint, the NLRB's arm in Oakland, Calif., said Tesla "has been interfering with, restraining and coercing employees in the exercise of their rights." The complaint listed several instances that alleged company employees instructed workers to stop distributing union leaflets and told them not to discuss safety concerns with the union and co-workers.
Credit: By Tim Higgins
Subject: Automobile industry; Employees; Industrial safety; Unfair labor practices
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Sep 1, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1934089936
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1934089936?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Faces Complaint From U.S. Labor Board; Hearing before administrative judge is scheduled for Nov. 14
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Sep 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: The National Labor Relations Board filed a complaint Thursday against Tesla Inc. based on allegations of unfair labor practices from workers at the company's Fremont, Calif., factory.
The employees accuse Tesla of being required to sign overly broad nondisclosure agreements that prohibit them from raising safety concerns. They also allege the Silicon Valley electric-car maker harassed them during unionizing efforts. A hearing before an administrative judge is scheduled for Nov. 14.
Tesla said the accusations in the complaint are without merit and accused the United Auto Workers union--which has sought to organize employees in Fremont--of filing complaints "only to generate headlines." Earlier this year, three workers and the union filed their claims with the NLRB against Tesla.
The NLRB complaint and brewing labor unrest at the Fremont factory threaten to disrupt Tesla just as it begins boosting production of the Model 3, a $35,000 all-electric sedan aimed at attracting more customers than its luxury cars and sport-utility vehicles that typically sell for about $100,000. Tesla Chief Executive Elon Musk cautioned in July that the effort to bring out the car would be "manufacturing hell" as the company learns to build the vehicle in large numbers.
In Thursday's complaint, the NLRB's arm in Oakland, Calif., said Tesla "has been interfering with, restraining and coercing employees in the exercise of their rights." The complaint listed several instances that alleged company employees instructed workers to stop distributing union leaflets and told them not to discuss safety concerns with the union and co-workers.
"I knew the company couldn't legally prevent us from speaking out about issues at the plant, but the confidentiality policy confused a lot of my co-workers and made them fear that they didn't have certain rights," David Gonzalez, a Tesla production associate, said in a statement. "I'm proud of my co-workers who filed these charges and stood up for us."
In its statement, Tesla blasted the UAW. "Faced with declining membership, an overwhelming loss at a Nissan plant earlier this month, corruption charges that were recently leveled against union leaders who misused UAW funds, and failure to gain traction with our employees, it's no surprise the union is feeling pressured to continue its publicity campaign against Tesla," the company said.
The UAW has faced several setbacks in recent months, including failing to win enough votes to organize a Nissan Motor Co. factory in Mississippi and watching former members of its leadership be accused of misuse of worker-training funds .
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Unfair labor practices; Employees; Workers; Industrial safety
Location: Mississippi
People: Musk, Elon
Company / organization: Name: Nissan Motor Co Ltd; NAICS: 336111; Name: United Automobile Aerospace & Agricultural Implement Workers of America--UAW; NAICS: 813930; Name: National Labor Relations Board--NLRB; NAICS: 926150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Sep 1, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1934158021
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1934158021?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla's 'Autopilot' Shares Blame in 2016 Fatal Crash, U.S. Investigators Say; Safety board finds the auto maker's hands-on-the-wheel detection system didn't substitute for measuring driver alertness.
Author: Spector, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Sep 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: U.S. officials said Tesla Inc.'s Autopilot feature contributed to a fatal crash, finding the Silicon Valley company's semiautonomous technology allowed a driver to go long periods without his hands on the wheel and ignore the company's warnings.
The U.S. National Transportation Safety Board's judgment was rendered at a meeting Tuesday in Washington on the probable cause of a collision last year that killed the driver of a Tesla electric car. It represented the first official finding that the auto maker shoulders some responsibility in the crash.
Officials found Autopilot could be used on roads for which it wasn't designed, and that a hands-on-the-wheel detection system was a poor substitute for measuring driver alertness.
The safety board's determination is the first stemming from automated-driving technology and comes as U.S. lawmakers are debating legislation aimed at speeding development of autonomous vehicles. Government officials and industry experts contend self-driving cars will minimize congestion and reduce pollution while aiding the elderly and disabled. Lawmakers and regulators also have said they believe the technology will make transportation safer by cutting traffic fatalities largely caused by human error, including impaired and distracted driving.
U.S. Transportation Secretary Elaine Chao visited Michigan on Tuesday to unveil new voluntary guidelines for companies working on self-driving technology, focusing partly on safety recommendations for testing and development of advanced systems that rely less on human interaction. The policy, begun under the Obama administration, aims to encourage adoption of driverless cars and discourage states from safety regulation that has historically been the purview of U.S. officials.
The findings released Tuesday by the safety board could refocus scrutiny on self-driving technologies' potential dangers and the need for more rigorous oversight.
The safety board found the driver, 40-year-old Joshua Brown, relied too heavily on the technology and didn't understand its limitations, and that Tesla could have done more to prevent Autopilot from being misused.
The driver of an 18-wheel truck that pulled in front of Mr. Brown should have been able to see the Tesla car and didn't "give an adequate safety margin before starting the turn," the safety board found. Mr. Brown also should have been able to see the truck before colliding with it, the agency found.
In the end, the safety board determined the probable cause of the May 2016 crash was shared among the truck driver, Mr. Brown and Autopilot. The findings won't result in any penalties or other immediate consequences.
The safety board approved a series of recommendations, including for auto makers to prevent systems from being used in situations for which they aren't designed.
A Tesla spokeswoman said the company prioritizes safety, and that Autopilot "significantly increases" it. "We appreciate the NTSB's analysis of last year's tragic accident and we will evaluate their recommendations as we continue to evolve our technology," she said. "We will also continue to be extremely clear with current and potential customers that Autopilot is not a fully self-driving technology and drivers need to remain attentive at all times."
Owners' manuals describe Autopilot as a collection of "driver assistance features" and note that motorists are responsible for staying alert, maintaining control of the vehicle and driving safely.
Still, Tesla's system allowed Mr. Brown to "use the system outside of the environment for which it was designed, and...gave far too much leeway to the driver to divert his attention to something other than driving," said NTSB Chairman Robert Sumwalt. "The result was a collision that, frankly, should never have happened. System safeguards were lacking."
Safety board officials found Autopilot's operational limitations--including an inability at the time of the crash to detect cross traffic--played a "major role" in the collision. Tesla updated Autopilot in September 2016 with enhanced radar that Chief Executive Elon Musk has suggested likely would have prevented the crash.
Mr. Brown activated Autopilot in his Model S car during a trip on a Florida highway. Traveling at 74 miles an hour, he collided with an 18-wheel truck crossing in front of him and died in the crash. Tesla said Autopilot didn't see the truck's white trailer against a brightly lighted sky. Mr. Brown's hands were detected on the steering wheel for just 25 seconds of 37 minutes of the trip when Autopilot was actively controlling his vehicle, according to the safety board.
The safety board found Tesla's Autopilot also did little to constrain the system to roadways for which it was designed, increasing the risk drivers would inappropriately use the technology.
Automatic steering, for instance, is intended for highways and limited access roads. The road Mr. Brown traveled on didn't meet the system's criteria. In addition, Autopilot allowed drivers to keep hands off the steering wheel for up to five minutes before receiving a warning when traveling above 45 miles an hour on roadways without sharp curves, the safety board found.
Tesla's system also fell short because it focused on measuring torque applied as people placed their hands on the steering wheel, as opposed to whether drivers were actually alert, the safety board found.
"Since driving is a largely visual task and the driver may interact with the steering wheel without assessing the environment, monitoring steering wheel torque is a poor surrogate for monitoring driver engagement," said Dr. Ensar Becic, a safety board investigator.
The safety board's judgment follows a National Highway Traffic Safety Administration probe that officials closed in January without finding that Autopilot posed an unreasonable safety risk. The NHTSA investigation found the truck should have been visible to Mr. Brown for at least seven seconds before the collision, and that Tesla made an effort during its design process to prevent drivers from misusing Autopilot.
Tesla, which has described Mr. Brown's death as a "tragic loss," has in the meantime forged ahead under Mr. Musk with plans to eventually enable its cars to fully drive themselves.
Mr. Brown's family in a statement Monday said his death led to improvements in Autopilot and declined to blame Tesla or its technology for the crash.
"We heard numerous times that the car killed our son. That is simply not the case," Mr. Brown's relatives said in the statement released by an Ohio law firm representing them. "There was a small window of time when neither Joshua nor the Tesla features noticed the truck making the left-hand turn in front of the car."
Write to Mike Spector at mike.spector@wsj.com
Credit: By Mike Spector
Subject: Aircraft accidents & safety; Automobile industry
Location: United States--US
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Sep 12, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1937812501
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1937812501?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Trump Administration to Tread Lightly on Autonomous-Vehicles Rules; Announcement comes as U.S. probe places some blame on Tesla for fatal crash
Author: Colias, Mike; Spector, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Sep 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: The Trump administration said Tuesday it would maintain a hands-off approach to federal regulation of autonomous vehicles, even as government investigators placed some blame on Tesla Inc.'s Autopilot technology for a fatal crash last year.
Transportation Secretary Elaine Chao laid out revised guidelines for companies developing robocars, aiming to speed development of autonomous vehicles expected to be safer than those piloted by people. Ms. Chao said revisions are aimed at helping guide developers as they conduct tests on public roads, though she said the government should "not impede progress with unnecessary or unintended barriers to innovation."
Many states are working to enact legislation governing the testing of autonomous cars in public, but the National Highway Traffic Safety Administration doesn't want a thicket of local rules to get in the way of technological development.
The updates were announced at autonomous-vehicle testing grounds in Ann Arbor, Mich., coming on the same day the National Transportation Safety Board said Tesla's Autopilot semiautonomous feature contributed to a fatal crash last year.
While tens of thousands more Americans are killed in crashes linked to more conventional factors such as impaired or distracted driving, regulators have expressed concerns over how automated-vehicle systems are being marketed, and whether car owners fully understand the technologies' limitations.
The NTSB's findings marked the first time officials singled out Tesla's technology for responsibility in the crash, which killed the driver of a Model S electric car. The driver went long periods without hands on the wheel before colliding with a semi truck, investigators found.
The safety board's judgment follows a separate investigation by the traffic-safety administration that officials closed in January without finding that Autopilot posed an unreasonable safety risk. That investigation found the truck should have been visible to the Tesla driver, 40-year-old Joshua Brown, for at least seven seconds before the collision, and that Tesla made an effort during its design process to prevent drivers from misusing Autopilot.
A Tesla spokeswoman said the company prioritizes safety, and that Autopilot "significantly increases" it. "We appreciate the NTSB's analysis of last year's tragic accident and we will evaluate their recommendations as we continue to evolve our technology," she said, adding that Tesla would continue to make clear that Autopilot doesn't render its cars fully self-driving and that motorists must remain attentive.
Tesla's Autopilot feature has a hands-on-the-wheel feature that forces drivers to check in, but the safety board found it a poor substitute for measuring driver alertness, such as with eye-tracking devices.
Autonomous-vehicle advocates say human drivers are largely responsible for an increasing number of deaths taking place on American roadways. A flood of infotainment features entering vehicle cabins and widespread ownership of smartphones are increasing the likelihood drivers will be distracted, and drunken drivers continue to cause traffic fatalities.
The race to develop autonomous vehicles is forcing a clash between conventional auto makers, including General Motors Co., and Silicon Valley tech companies that are increasingly able to engineer cars. Alphabet Inc.'s Waymo unit is considered the leader in developing self-driving vehicles and has argued steering wheels and pedals will eventually no longer be needed.
The guidelines published Tuesday primarily affect development of more advanced vehicles that aren't yet sold to U.S. buyers.
Auto makers now sell so-called Level 2 automated vehicles that combine features such as adaptive cruise control, automatic steering, self-braking and autonomous lane-changing to allow cars to drive themselves under certain circumstances, with instructions for drivers to remain engaged with their hands on the wheel and ready to take control. Tesla's Autopilot is an example.
Over the next decade, engineers expect to refine software, lasers, radars, cameras and other systems so that computer-driven cars can begin replacing conventional ones.
"There are 40,000 reasons a year to move on this issue," said Mitch Bainwol, president of the Alliance of Automobile Manufacturers, a Washington-based group lobbying on behalf of auto makers. There were more than 35,000 U.S. traffic fatalities last year.
Others argue the auto industry needs firmer rules.
"This isn't a vision for safety," said John M. Simpson, a director at advocacy group Consumer Watchdog. "It's a road map that allows manufacturers to do whatever they want, wherever and whenever they want, turning our roads into private laboratories for robot cars with no regard to our safety."
Jim Zizelman, an executive with self-driving-technology supplier Delphi Automotive PLC, said car companies are already far down the road when it comes to experimentation. "You've already had millions of test miles being put on these cars...."
GM said Monday it is capable of building a self-driving car that theoretically could be safe enough for public roads. It will begin testing it in San Francisco in a few weeks.
Ms. Chao said publishing "best practices" is "the best way to proceed in a field that is changing so rapidly." The NTSB's findings, however, could boost the case for more rigorous oversight.
The safety board found that Mr. Brown, the driver in the Tesla crash, relied too heavily on Autopilot and didn't understand its limitations, and that Tesla could have done more to prevent the technology from being misused. Tesla's technology allowed Mr. Brown to "use the system outside of the environment for which it was designed, and...gave far too much leeway to the driver to divert his attention to something other than driving," said NTSB Chairman Robert Sumwalt.
The driver of an 18-wheel truck that pulled in front of Mr. Brown should have been able to see the Tesla car and didn't "give an adequate safety margin before starting the turn," the safety board found. Mr. Brown also should have been able to see the truck before colliding with it, the board found.
In the end, the safety board determined the probable cause of the May 2016 crash was shared among the truck driver, Mr. Brown and Autopilot.
John McKinnon contributed to this article.
Write to Mike Colias at Mike.Colias@wsj.com and Mike Spector at mike.spector@wsj.com
Credit: By Mike Colias and Mike Spector
Subject: Aircraft accidents & safety; Fatalities; Investigations; Automobile drivers; Automation; Traffic accidents & safety; Autonomous vehicles; Engineers; Federal regulation
Location: United States--US Ann Arbor Michigan
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Sep 12, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1937884086
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1937884086?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla's SolarCity Hangover; Car maker's solar-panel unit's small settlement with the Justice Department should concern investors
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Sep 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Every investor in Tesla has put their trust in Elon Musk to create a very large and very profitable electric-car maker.
That trust took a slight hit on Friday when the Justice Department announced that SolarCity, a Tesla subsidiary, agreed to pay about $30 million to settle alleged violations of the False Claims Act. The government alleged that SolarCity inflated its solar-installation costs in government reports to secure larger government payments than it was entitled to earn. As part of the settlement, SolarCity dropped a countersuit that alleged it had been underpaid on those same contracts.
A SolarCity spokesman said in a statement that the company accurately valued the solar-energy systems and pointed out that the settlement was for a fraction of the money that it allegedly owed. And by some measures, solar panels are a small part of Tesla's business--just 10% of revenues in the second quarter.
The bigger concern is the impact on SolarCity, which Tesla acquired last fall . SolarCity installs solar panels on homes and businesses as part of Mr. Musk's vision for a clean energy future. He was the company's chairman and largest shareholder before the merger, which was approved by investors despite Mr. Musk's conflicts. That stretched Tesla's balance sheet--which now has nearly $20 billion in total liabilities--and contributed to a $400 million net loss in the second quarter.
At minimum, SolarCity will need to be careful about how it claims government payments, which will lower its proceeds from the tax program. But, either way, that program is due to become less generous in coming years. The investment-tax credit is worth 30% of qualifying solar costs through 2019, but, in 2022, it falls to 10% for commercial systems and expires for residential systems.
Tesla's shares fell 4% on Friday and are up 64% this year.
The stock is on such a run because investors believe fully in Mr. Musk's vision, and ignore the fragility of the balance sheet. That trust took a $30 million dent with Friday's settlement, and investors should wonder what could be in store for the stock if confidence in Mr. Musk were to waver even slightly.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Settlements & damages; Investments; Balance sheets
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Sep 22, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1941452516
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1941452516?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla's China Dream Edges Closer to Reality; Beijing suggests rules requiring foreign auto makers to have a Chinese partner could be relaxed
Author: Moss, Trefor; Dou, Eva
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Sep 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: SHANGHAI--China is considering relaxing rules requiring foreign auto makers to have a local partner, according to people with knowledge of the situation, a move that could pave the way for Tesla Inc. to manufacture vehicles in the country.
Tesla has long dreamed of planting its flag in China, the world's biggest market for electric vehicles, but finds itself the only notable auto maker without public plans to manufacture electric vehicles there. Finding a local partner has been a sticking point.
While there has long been talk of easing these rules, U.S. President Donald Trump's decision last month to launch an investigation into Chinese trade practices likely accelerated discussions, these people said.
Under a draft proposal shared with auto-industry executives, China is preparing to allow foreign companies to manufacture electric vehicles in free-trade zones without a Chinese partner, though the cars would be still subject to import tariffs if sold in the country, the people said. The plans were reported earlier by Bloomberg.
China's commerce ministry spokesman Gao Feng declined to confirm those plans when asked by state-owned broadcaster CCTV at a press briefing Thursday. But he said the government, in the future, would roll back policies limiting foreign investment in EVs, without mentioning joint-venture rules.
Industry watchers said such a change would be a limited concession by China, as long as a 25% tariff on imports remains in force. Last year, in a comparable move, China allowed foreign battery companies to set up wholly owned companies in selected free-trade zones, including Shanghai.
Even so, the development could be significant for Tesla, which analysts said is concerned that a joint venture could compromise its technology.
The Silicon Valley auto maker, led by Elon Musk, is under mounting pressure to open a Chinese base. General Motors Co., Volkswagen AG, Ford Motor Co. and many other foreign manufacturers with established operations in China have recently announced plans to begin or substantially increase electric-car production here as Beijing moves to phase out traditional gas and diesel vehicles.
Tesla said in June that it was talking to Chinese authorities about building a factory in Shanghai and that it hoped to have an announcement within 2017. On Friday, Tesla said it had no comment beyond that statement.
Analysts said Tesla appeared to be holding back on manufacturing plans in hope that China would ease rules require foreign auto makers to set up 50-50 joint venture if they want to build cars here.
The free-trade-zone plan for electric vehicles would be more cosmetic than a game changer for many companies, said Jing Yang, an associate director at Fitch Ratings. Companies operating in those free-trade zones will almost certainly still incur a 25% tariff levied on imported cars and not qualify for China's generous EV subsidies, Ms. Yang said.
But that may be less of an issue for Tesla, a luxury brand with unquestioned cachet here. Even with the tariffs, Tesla sold about 11,000 cars worth over $1 billion here in 2016--enough to make China its second-largest market, after the U.S.
That figure is dwarfed by the market potential, however, with Beijing targeting 7 million electric-car sales in 2025, and 15 million in 2030.
Other foreign auto makers are overcoming their concerns about intellectual-property protection by building entry-level EVs with no cutting-edge technology. GM, for example, just launched its first pure-electric car for China, the Baojun E100, with a $5,300 price tag. Its premium U.S. offering, the Chevrolet Bolt, is unavailable here.
But Tesla doesn't make low-end vehicles. Even the $35,000 Model 3 would be one of the priciest electric models in China.
At the same time, Mr. Musk has long hoped to set up shop in China, having first discussed plans for a Chinese plant in Beijing in 2015 . He most recently visited China in April to meet top officials.
In March, Mr. Musk gained a powerful friend in internet giant Tencent Holdings Ltd.--which bought a 5% stake in the company for $1.8 billion--creating an alliance that could help smooth talks with Chinese officials.
A representative of one foreign car company cautioned that Chinese officials had been discussing the potential reform for months, adding that "there's really nothing on the table yet."
Even with the rule change, this person added, foreign auto makers already established in China wouldn't abandon their existing joint ventures, which they have invested heavily in and spent many years building.
Kersten Zhang and Yang Jie in Beijing and Tim Higgins in San Francisco contributed to this article.
Write to Trefor Moss at Trefor.Moss@wsj.com and Eva Dou at eva.dou@wsj.com
Related
* Renault-Nissan Alliance to Produce Electric Vehicle in China (Aug. 29)
* Ford Plans Joint Venture to Make Electric Cars in China (Aug. 22)
* Feeling Pressed by Beijing, Auto Makers Set Plans to Build Electric Cars in China (April 21)
Credit: By Trefor Moss and Eva Dou
Subject: Automobile industry; Foreign investment; Foreign trade zones; Electric vehicles; Joint ventures
Location: China Beijing China United States--US
People: Gao Feng Trump, Donald J
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Volkswagen AG; NAICS: 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Sep 25, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1942154627
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1942154627?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
China's Plan Brightens Tesla's Prospects There
Author: Moss, Trefor; Dou, Eva
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]26 Sep 2017: B.1.
ProQuest document link
Abstract: None available.
Full text: SHANGHAI -- China is considering relaxing rules requiring foreign auto makers to have a local partner, according to people with knowledge of the situation, a move that could pave the way for Tesla Inc. to manufacture vehicles in the country.
Tesla has long dreamed of planting its flag in China, the world's biggest market for electric vehicles, but finds itself the only notable auto maker without public plans to manufacture electric vehicles there. Finding a local partner has been a sticking point.
While there has long been talk of easing these rules, President Donald Trump's decision last month to launch an investigation into Chinese trade practices likely accelerated discussions, these people said.
Under a draft proposal shared with auto-industry executives, China is preparing to allow foreign companies to manufacture electric vehicles in free-trade zones without a Chinese partner, though the cars would still be subject to import tariffs if sold in the country, the people said. The plans were reported earlier by Bloomberg.
China's commerce ministry spokesman Gao Feng declined to confirm those plans when asked by state-owned broadcaster CCTV at a press briefing Thursday. But he said the government, in the future, would roll back policies limiting foreign investment in EVs, without mentioning joint-venture rules.
Industry watchers said such a change would be a limited concession by China, as long as a 25% tariff on imports remains in force. Last year, in a comparable move, China allowed foreign battery companies to set up wholly owned companies in selected free-trade zones, including Shanghai.
Even so, the development could be significant for Tesla, which analysts said is concerned that a joint venture could compromise its technology.
The Silicon Valley auto maker, led by Elon Musk, is under mounting pressure to open a Chinese base. General Motors Co., Volkswagen AG, Ford Motor Co. and many other foreign manufacturers with established operations in China have recently announced plans to begin or substantially increase electric-car production there as Beijing moves to phase out traditional gas and diesel vehicles.
Tesla said in June that it was talking to Chinese authorities about building a factory in Shanghai and that it hoped to have an announcement within 2017. On Friday, Tesla said it had no comment beyond that statement.
Analysts said Tesla appeared to be holding back on manufacturing plans in hopes that China would ease rules require foreign auto makers to set up 50-50 joint ventures if they want to build cars.
The free-trade-zone plan for electric vehicles would be more cosmetic than a game changer for many companies, said Jing Yang, an associate director at Fitch Ratings. Companies operating in those free-trade zones will almost certainly still incur a 25% tariff levied on imported cars and not qualify for China's generous EV subsidies, Ms. Yang said.
But that may be less of an issue for Tesla, a luxury brand with unquestioned cachet in China. Even with the tariffs, Tesla sold about 11,000 cars worth over $1 billion in China in 2016 -- enough to make the country its second-largest market after the U.S.
That figure is dwarfed by the market potential, however, with Beijing targeting sales of 7 million electric cars in 2025, and 15 million in 2030.
Other foreign auto makers are overcoming their concerns about intellectual-property protection by building entry-level EVs with no cutting-edge technology. GM, for example, just launched its first pure-electric car for China, the Baojun E100, with a $5,300 price tag. Its premium U.S. offering, the Chevrolet Bolt, is unavailable in China.
But Tesla doesn't make low-end vehicles. Even the $35,000 Model 3 would be one of the priciest electric models in China.
At the same time, Mr. Musk has long hoped to set up shop in China, having first discussed plans for a Chinese plant in Beijing in 2015. He most recently visited in April to meet top officials.
In March, Mr. Musk gained a powerful friend in internet giant Tencent Holdings Ltd. -- which bought a 5% stake in the company for $1.8 billion -- creating an alliance that could help smooth talks with Chinese officials.
A representative of one foreign car company cautioned that Chinese officials had been discussing the potential change for months, adding that "there's really nothing on the table yet."
Even with the rule change, this person added, foreign auto makers already established in China wouldn't abandon their existing joint ventures, which they have invested heavily in and spent many years building.
---
Kersten Zhang and Yang Jie in Beijing and Tim Higgins in San Francisco contributed to this article.
Credit: By Trefor Moss and Eva Dou
Subject: Automobile industry; Foreign trade zones; Electric vehicles; Tariffs; Automobile production
Location: China
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2017
Publication date: Sep 26, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1942491867
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1942491867?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Misses Model 3 Production Goals; Electric-car maker built 260 Model 3s in latest period, missing out on goal of building 1,500
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Oct 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. badly missed its goal of building 1,500 Model 3 cars in the third quarter, the first sign that the production ramp-up for the new sedan isn't going as smoothly as planned.
The Silicon Valley electric-car maker built 260 of the Model 3s between July and September, the company said Monday in a statement. In August, the auto maker predicted it would build more than 1,500 Model 3s before cranking up production to 5,000 a week by the end of the fourth quarter.
The Model 3, which starts at about $35,000 , represents Chief Executive Elon Musk's bet that he can transform the luxury auto maker into a more mainstream player around the world. Tesla blamed "production bottlenecks" for the weaker production.
"It is important to emphasize that there are no fundamental issues with the Model 3 production or supply chain," Tesla said in a statement. "We understand what needs to be fixed and we are confident of addressing the manufacturing bottleneck issues in the near-term."
When Mr. Musk touted the new cars in a July celebration, he warned the first six months of production could be "manufacturing hell" as its Fremont, Calif., factory learns how to build the new vehicle.
Enthusiasm for the Model 3 and Mr. Musk's vision for transportation technology has helped boost shares more than 50% this year, at times making the 14-year-old, unprofitable company's market value greater than General Motors Co., which sold about 10 million vehicles globally last year and made more than $9 billion in profit.
GM on Monday said it plans to introduce two more electric vehicles within 18 months in the U.S. and 20 globally within six years.
Tesla on Monday said its total global deliveries--including Model S sedans and Model X sport-utility vehicles--rose 4.5% to 26,150 compared with a year earlier. That beat the average estimate of 25,900 deliveries by five analysts surveyed by FactSet.
Tesla's third-quarter results were helped by a 36% rise in Model X sales to 11,865 compared with a year ago, while Model S sales fell about 11% to 14,065.
Tesla delivered only 220 Model 3s during the quarter, well below the 1,300 that analysts surveyed by FactSet expected on average. Tesla sold these first Model 3 vehicles in the quarter to employees and investors, and expects to begin delivering them to nonemployees in the final three months of the year.
Some analysts weren't confident in Tesla's ability to meet Model 3 expectations in the quarter. Ben Kallo, an analyst for R.W. Baird, said in a Sept. 29 note to investors that Tesla was likely behind, estimating the company had delivered only about 300 to 400 Model 3s. "We believe Q3 will be the most challenging part of the Model 3 production ramp," he wrote.
Tesla in August said it expected combined sales of the Model S and Model X to increase during the second half of the year, up from the 47,100 units reported in the first six months. On Monday, Tesla said it expects sales to exceed that first-half total "by several thousand," reaching about 100,000 vehicles delivered for the year.
Unlike major auto makers, Tesla doesn't report monthly sales results.
The company said 4,820 vehicles were in transit at the end of the quarter, which will be counted as sales in the fourth quarter. That is a 38% increase from the roughly 3,500 vehicles in transit at the end of the second quarter.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Vehicles
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Oct 2, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1945301985
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1945301985?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Misses Goal for Model 3
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Oct 2017: B.1.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. badly missed its goal of building 1,500 Model 3 cars in the third quarter, the first sign that the production ramp-up for the new sedan isn't going as smoothly as planned.
The Silicon Valley electric-car maker built 260 of the Model 3s between July and September, the company said Monday in a statement. In August, the auto maker predicted it would build more than 1,500 Model 3s before cranking up production to 5,000 a week by the end of the fourth quarter.
The Model 3, which starts at about $35,000, represents Chief Executive Elon Musk's bet that he can transform the luxury auto maker into a more mainstream player around the world. Tesla blamed "production bottlenecks" for the weaker production.
"It is important to emphasize that there are no fundamental issues with the Model 3 production or supply chain," Tesla said in a statement. "We understand what needs to be fixed and we are confident of addressing the manufacturing bottleneck issues in the near-term."
When Mr. Musk touted the new cars in a July celebration, he warned the first six months of production could be "manufacturing hell" as its Fremont, Calif., factory learns how to build the new vehicle.
Enthusiasm for the Model 3 and Mr. Musk's vision for transportation technology have helped boost shares more than 50% this year, at times making the 14-year-old, unprofitable company's market value greater than General Motors Co., which sold about 10 million vehicles globally last year and made more than $9 billion in profit.
GM on Monday said it plans to introduce two more electric vehicles within 18 months in the U.S. and 20 globally within six years.
Tesla on Monday said its total global deliveries -- including Model S sedans and Model X sport-utility vehicles -- rose 4.5% to 26,150 compared with a year earlier.
That beat the average estimate of 25,900 deliveries by five analysts surveyed by FactSet.
Tesla's third-quarter results were helped by a 36% rise in Model X sales to 11,865 compared with a year ago, while Model S sales fell about 11% to 14,065.
Tesla delivered only 220 Model 3s during the quarter, well below the 1,300 that analysts surveyed by FactSet expected on average. Tesla sold these first Model 3 vehicles in the quarter to employees and investors and expects to begin delivering them to nonemployees in the final three months of the year.
Credit: By Tim Higgins
Subject: Automobile production; Automobile industry
Location: United States--US
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2017
Publication date: Oct 3, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1945526388
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1945526388?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Has a Forecasting Problem; Inability to predict near-term Model 3 production should give investors pause about Elon Musk's vision
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Oct 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: The mass-market car of the future is taking its sweet time to arrive.
Tesla announced Monday that it delivered 220 Model 3 sedans in the third quarter and produced just 260. The company had predicted it would produce 1,500 in the quarter. Tesla attributed the shortfall to various "production bottlenecks."
That news overshadowed an otherwise strong delivery report and shares fell only slightly Tuesday morning.
It is unlikely that this stumble will immediately reverse much of the 55% gains Tesla shareholders had reaped so far this year. After all, the company said in a statement that there are no fundamental issues with the supply chain. No American company enjoys a more loyal shareholder base than Tesla and this moment is unlikely to be different.
Still, Tesla's persistent inability to forecast its results should raise concerns. Tesla issued the forecast of 1,500 cars just two months ago and missed it by over 80%. Monday's announcement marked the third time since January that Tesla has cited production issues as a reason for a missed forecast, yet Tesla is no startup--the company has been in business since 2003.
Given those stumbles, the longer-term forecasts that have investors so excited deserve some scrutiny. Analysts expect Tesla to deliver 748,000 cars by 2020, according to FactSet. That is up from a forecast of 114,000 this year.
To reach that goal, Tesla will have to consistently deliver reliable cars while selling them at a profit, something the company has never been able to accomplish. It will also have to fend off new competition from better-capitalized rivals showing renewed interest in developing electric cars of their own.
Long-term shareholders have been richly rewarded for their faith. Exiting before the story sours would be a wise decision.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Stockholders
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Oct 3, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1945781480
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1945781480?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Behind Tesla's Production Delays: Parts of Model 3 Were Being Made by Hand; Company this week blamed 'production bottlenecks' for coming well short of promised 1,500 vehicles
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Oct 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: FREMONT, Calif.--Tesla Inc. blamed "production bottlenecks" for having made only a fraction of the promised 1,500 Model 3s, the $35,000 sedan designed to propel the luxury electric-car maker into the mainstream.
Unknown to analysts, investors and the hundreds of thousands of customers who signed up to buy it, as recently as early September major portions of the Model 3 were still being banged out by hand, away from the automated production line, according to people familiar with the matter.
While the car's production began in early July, the advanced assembly line Tesla has boasted of building still wasn't fully ready as of a few weeks ago, the people said. Tesla's factory workers had been piecing together parts of the cars in a special area while the company feverishly worked to finish the machinery designed to produce Model 3's at a rate of thousands a week, the people said.
Automotive experts say it is unusual to be building large parts of a car by hand during production. "That's not how mass production vehicles are made," said Dennis Virag, a manufacturing consultant who has worked in the automotive industry for 40 years. "That's horse-and-carriage type manufacturing. That's not today's automotive world."
In a statement, a Tesla spokeswoman declined to answer questions for this article and said, "For over a decade, the WSJ has relentlessly attacked Tesla with misleading articles that, with few exceptions, push or exceed the boundaries of journalistic integrity. While it is possible that this article could be an exception, that is extremely unlikely." The Journal disagrees with the company's categorization of its journalism.
Tesla introduced the Model 3 at an event outside the company's factory in July, when Chief Executive Elon Musk drove a shiny red Model 3 onstage as hundreds of his employees cheered the first sedans rolling off the production line.
Within minutes of stepping out of the new vehicle, Tesla's leader warned his engineers and designers the coming months would be challenging. "Frankly, we're going to be in production hell. Welcome, welcome!" he said to laughter.
Behind the scenes, Tesla had fallen weeks behind in finishing the manufacturing systems to build the vehicle, the people said.
The extent of the problem came to light on Monday when Tesla said it made only 260 Model 3s during the third quarter--averaging three cars a day. The company cited production bottlenecks but didn't explain much further.
"Although the vast majority of manufacturing subsystems at...our California car plant...are able to operate at high rate, a handful have taken longer to activate than expected," the company said at the time.
In Mr. Musk's pursuit to rid the world of combustion engines, Tesla is trying to apply Silicon Valley's ethos of rapid change to the type of complex manufacturing process that traditional auto makers have spent decades perfecting. Unusual in the U.S. tech industry, where even companies that do make hardware generally outsource their manufacturing, Tesla's challenge requires integrating an army of factory workers and some 10,000 parts from suppliers around the world.
Tesla's rollout of the Model X sport-utility vehicle in 2015 also was plagued by quality and design issues that left suppliers scrambling and hourly workers having to rush to meet lofty goals. But the plans for the Model 3 are far larger, meaning the lack of a fully working assembling line so late in production could deal a bigger blow to the company.
Mr. Musk has said Tesla learned from the Model X mistakes. And he has proven doubters wrong before, creating a luxury brand that competes against BMW and Mercedes-Benz for buyers and has demonstrated that fully electric cars can find an enthusiastic following beyond a niche of environmentalists.
Calling his cars a "computer on wheels," Mr. Musk caught conservative Detroit off guard with Tesla's ability to quickly change features, such as a semiautonomous drive system, with software updates over the air. The company's stock has soared about 69% in the past 12 months, at times pushing its market value past General Motors Co.'s.
But building 500,000 vehicles a year--as Mr. Musk had projected Tesla would start doing next year--is a sizable leap for a company that only made 84,000 Model S sedans and Model X SUVs last year. By comparison, General Motors Co., the largest U.S. auto maker by sales, delivered about 10 million vehicles globally last year, or more than 27,000 a day.
To approach what a typical factory in North America churns out, 14-year-old Tesla must build the muscles to roll out a car every minute of the workday and do it so well that the vehicles don't cause headaches for customers down the road.
Most auto makers celebrate the start of production of a new vehicle to sell--so-called Job 1--after six months or so of running the assembly line to build a few hundred vehicles to work out the bugs, said Doug Betts, senior vice president of global automotive operations at consultancy J.D. Power and a former manufacturing executive for Toyota Motor Corp., Fiat Chrysler Automobiles NV and Apple Inc.
"You're not really improving the final process if you're not running on it," Mr. Betts said. "Problems can only be solved once they are found."
It isn't uncommon for much larger auto makers to handbuild pre-production versions of a car prior to the sales launch, but those are typically reserved for employees and others willing to test the cars and return them to the company. By the time a car goes on sale, the body shop is typically fully automated.
Inside the Fremont factory, workers said equipment for the so-called body-in-white line for the Model 3, where the car body's sheet metal is welded together, wasn't installed until by around September. They guessed at least another month of work remained to calibrate the tools.
One worker who spent time in the Model 3 shop--dubbed by some as Area 51 because of the limited access and secretive nature--described watching young workers in September struggling to move large pieces of steel to weld together instead of using robots as is traditionally the case.
"In place of the robots...you've got two associates lining up with a big, old spot welder hanging from the ceiling by a chain, and you've got one associate kind of like balancing it and trying to get the welder in position, and you've got another welder with his arm guiding it," this worker recalled seeing. "Sparks go flying."
In August, Mr. Musk told analysts that the Model 3s coming out of the factory were "not engineering validation units."
"They're fully certified, fully DOT-approved, EPA-approved production cars," Mr. Musk said, referring to the Department of Transportation and the Environmental Protection Agency. "These are not prototypes in any way. They're not validation anything. They are full production cars."
But he also said early versions coming out of Fremont would have issues, which is why the first cars were going to employees and investors who paid for them.
Tesla has said it expects to begin delivering the first cars to nonemployees this quarter. It will have to seriously boost production to meet Mr. Musk's 5,000-a-week projection.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Investments; Environmental protection; Automation; Employees; Workers; Vehicles
Location: California United States--US
Company / organization: Name: General Motors Corp; NAICS: 333415, 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Oct 6, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1947601378
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1947601378?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Output Faltered Badly
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 Oct 2017: B.1.
ProQuest document link
Abstract: None available.
Full text: FREMONT, Calif. -- Tesla Inc. blamed "production bottlenecks" for having made only a fraction of the promised 1,500 Model 3s, the $35,000 sedan designed to propel the luxury electric-car maker into the mainstream.
Unknown to analysts, investors and hundreds of thousands of customers, as recently as early September major portions of the Model 3 were still being banged out by hand, away from the automated production line, according to people familiar with the matter.
While the car's production began in early July, the advanced assembly line Tesla has boasted of building still wasn't fully ready as of a few weeks ago, the people said. Tesla's factory workers had been piecing together parts of the cars in a special area while the company feverishly worked to finish the machinery designed to produce Model 3s at a rate of thousands a week, the people said.
Automotive experts say it is unusual to be building large parts of a car by hand during production. "That's not how mass production vehicles are made," said Dennis Virag, a manufacturing consultant who has worked in the automotive industry for 40 years. "That's horse-and-carriage type manufacturing. That's not today's automotive world."
In a statement, a Tesla spokeswoman declined to answer questions for this article and said, "For over a decade, the WSJ has relentlessly attacked Tesla with misleading articles that, with few exceptions, push or exceed the boundaries of journalistic integrity. While it is possible that this article could be an exception, that is extremely unlikely." The Journal disagrees with the company's categorization of its journalism.
Tesla introduced the Model 3 at an event outside the company's factory in July, when Chief Executive Elon Musk drove a shiny red Model 3 onstage as hundreds of his employees cheered the first sedans rolling off the production line.
Within minutes of stepping out of the new vehicle, Tesla's leader warned his engineers and designers the coming months would be challenging. "Frankly, we're going to be in production hell. Welcome, welcome!" he said to laughter.
Behind the scenes, Tesla had fallen weeks behind in finishing the manufacturing systems to build the vehicle, the people said.
The extent of the problem came to light on Monday when Tesla said it made only 260 Model 3s during the third quarter -- averaging three cars a day. The company cited production bottlenecks but didn't explain much further.
"Although the vast majority of manufacturing subsystems at . . . our California car plant . . . are able to operate at high rate, a handful have taken longer to activate than expected," the company said at the time.
In Mr. Musk's pursuit to rid the world of combustion engines, Tesla is trying to apply Silicon Valley's ethos of rapid change to the type of complex manufacturing process that traditional auto makers have spent decades perfecting. Unusual in the U.S. tech industry, where even companies that do make hardware generally outsource their manufacturing, Tesla's challenge requires integrating an army of factory workers and some 10,000 parts from suppliers around the world.
Tesla's rollout of the Model X sport-utility vehicle in 2015 also was plagued by quality and design issues that left suppliers scrambling and hourly workers having to rush to meet lofty goals. But the plans for the Model 3 are far larger, meaning the lack of a fully working assembling line so late in production could deal a bigger blow to the company.
Mr. Musk has said Tesla learned from the Model X mistakes. And he has proven doubters wrong before, creating a luxury brand that competes against BMW and Mercedes-Benz for buyers and has demonstrated that fully electric cars can find an enthusiastic following beyond a niche of environmentalists.
Calling his cars a "computer on wheels," Mr. Musk caught conservative Detroit off guard with Tesla's ability to quickly change features, such as a semiautonomous drive system, with software updates over the air. The company's stock has soared about 69% in the past 12 months, at times pushing its market value past General Motors Co.'s.
But building 500,000 vehicles a year -- as Mr. Musk had projected Tesla would start doing next year -- is a sizable leap for a company that made only 84,000 Model S sedans and Model X SUVs last year. By comparison, GM, the largest U.S. auto maker by sales, delivered about 10 million vehicles globally last year, or more than 27,000 a day.
Tesla has said it expects to begin delivering the Model 3s to nonemployees this quarter. It will have to seriously boost production to meet Mr. Musk's 5,000-a-week projection.
Credit: By Tim Higgins
Subject: Automobile industry; Manufacturing; Vehicles; Automobile production
Location: United States--US
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2017
Publication date: Oct 7, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1947761233
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1947761233?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-1 1-24
Database: The Wall Street Journal
The Truth Is Catching Up With Tesla; CEO Elon Musk is a visionary, but there is a fine line between setting aggressive goals and misleading shareholders
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Oct 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: New revelations about Tesla Inc.'s production
of the highly anticipated Model 3 sedan should shock, but not surprise, investors.
The Wall Street Journal reported Friday that Tesla has recently been building major portions of the Model 3 by hand. This comes less than a week after Tesla announced it fell short of its third-quarter production guidance
of 1,500 cars by more than 80%.
At the time, Tesla attributed the shortfall to "production bottlenecks." On Friday, Tesla said it would postpone its launch event
for a new truck to November to deal with Model 3 issues and to help provide assistance to Puerto Rico.
Tesla Chief Executive Elon Musk is known as a risk-taker, which has endeared him to Wall Street analysts and investors alike. There is a fine line, however, between setting aggressive goals and misleading shareholders.
Tesla is inching closer to that line. Tesla was making three Model 3s on an average day in the third quarter. Mr. Musk should have known in August, when production guidance was reiterated, that the company wasn't going to produce 1,500 Model 3s by the end of September.
There are other examples. At the Model 3 launch event in July, he told reporters that Tesla had received more than 500,000 customer deposits for the car. Five days later, after a series of questions from The Wall Street Journal, Mr. Musk revised that number to 455,000 on a conference call with investors. The earlier, higher figure he quoted had been "just a guess."
Investors approved Tesla's decision
to pay about $8 billion in stock and assumed debt to acquire Mr. Musk's struggling SolarCity last fall, after Mr. Musk demonstrated roofs that could generate solar power for homes and promised production would begin in the spring. A year later, those roofs are conspicuously absent, beyond some installations for Tesla executives.
Last, but certainly not least, Mr. Musk told investors in May 2016 that he expected Tesla to produce between 100,000 and 200,000 Model 3s
in the second half of 2017.
There is far more at stake here than just semantics. Investors have bid Tesla to a nearly $60 billion equity valuation on expectations the company will dominate the automobile market. That will be a fantasy if Tesla can't produce enough cars profitably.
Tesla doesn't have the financial wherewithal for investors to be patient. It burned more than $1 billion of cash in the second quarter and has nearly $20 billion in liabilities on its balance sheet. Tesla's soaring stock reignited the interest of better-capitalized car rivals in electric cars. Fresh competition is coming.
At 67 times 2019's expected earnings, Tesla stock is valued as though the company can execute on its vision flawlessly. The facts suggest the opposite.
It is high time for Tesla--and Wall Street--to acknowledge reality.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Stockholders; Investments
Location: Puerto Rico
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Oct 7, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1947929520
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1947929520?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-18
Database: The Wall Street Journal
Volvo Unveils a Direct Challenge to Tesla; Polestar debut renews Volvo's commitment to make only electric or hybrid vehicles starting in 2019
Author: Moss, Trefor
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Oct 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: SHANGHAI--In a direct challenge to Tesla Inc., Volvo Cars unveiled its first high-performance electric-car model in Shanghai on Tuesday, doubling down on its commitment to make only electric or hybrid vehicles starting in 2019.
Polestar, a new stand-alone premium electric-vehicle company owned by Volvo, will bring its first two vehicles to market that same year, with Volvo and its Chinese owner Zhejiang Geely Holding Group Co. pledging to invest $755 million to develop the company.
Polestar will build its cars at a new plant in the western Chinese city of Chengdu, which already hosts a Volvo factory.
"We want to be leaders in electrification," Volvo Chief Executive Hakan Samuelsson at the event.
The launch of the first Polestar marks the latest step in a global shift toward electric vehicles which, led by China, is quickly gathering pace. Last month, the Chinese government told all auto makers, foreign and domestic, to start building EVs by 2019, having also outlined future plans to ban gasoline cars. Beijing is spending billions of dollars on subsidies to boost the efforts of domestic auto makers to develop EVs.
Polestar--which previously existed as a Volvo model, rather than as a distinct company--will also be an experiment in marketing cars through smartphone-based subscription plans with monthly payments but no upfront fee. Polestar vehicles will be available only through 2 or 3-year subscription plans, a method some auto analysts believe could become the norm in years ahead.
"We believe that subscription is the future," said Jonathan Goodman, Polestar's chief operating officer.
The high-performance, low-volume Polestar 1 hybrid coupe--the vehicle made its debut in Shanghai--will go on sale in the first half of 2019, followed by the higher-volume, pure-electric Polestar 2 later that year.
The second vehicle is designed to go head-to-head with the Tesla Model 3, said Polestar CEO Thomas Ingenlath, laying down the gauntlet to the California-based pioneer of premium EVs.
Polestar still needs to work out the details of its subscription-based approach, including how much consumers will pay, Mr. Ingenlath conceded, but he said the brand would be "competitive and profitable."
Volvo makes a fifth of its sales in China, and Polestar has the same target here, said Mr. Samuelsson, with Europe and the U.S. also key markets for the new brand.
Tesla is the leading maker of electric premium vehicles, but the broader automotive industry is taking aim at the Silicon Valley upstart. In addition to Volvo's Polestar, the big German premium brands Mercedes-Benz, BMW AG, Audi AG, and Porsche are planning to launch dozens of new high-end electric vehicles and hybrids in the next few years. Maserati, Jaguar, Bentley and other luxury brands are also getting in on the act.
But targeting high-end EV sales is risky, especially in China, some analysts say. While China is the world's biggest EV market, demand for upscale electric cars will be weak for several years, as most auto makers launch bargain vehicles designed to fulfill the government's production quota. Tesla--which imports cars to China in low volumes--won't start selling locally assembled cars before the early 2020s, having yet to announce firm plans for a China plant.
"The market for high-end EVs is still very small," said Jing Yang, an associate director at Fitch Ratings.
Mr. Samuelsson dismissed concerns about premium EV demand. He said demand for premium cars is strong and growing in China, claiming Geely ownership would give the company an edge.
"This is our second home," Mr. Samuelsson said. "We are the only [foreign auto] company that really has control over business" in China thanks to Volvo's autonomy within the Geely group, he said, comparing other foreign car makers which must operate through local joint ventures.
Polestar is the latest sign of Geely and Volvo's determination to be at the forefront of the industry's transformation. "Electrification and new energy is the focus of the wider Zhejiang Geely Holding Group," said a Geely spokesman.
The Hangzhou-based firm has emerged as China's leading privately owned Chinese auto maker by sales, with Geely Auto selling over 827,000 cars in the first nine months of 2017, up 80% on the same period last year.
Geely's brand stable is also growing fast. Last year it opened Yuan Cheng, a domestic commercial vehicle maker, before acquiring a controlling stake in Malaysia's Proton and taking over Lotus Cars in May. Lynk & Co., a new marque targeting young buyers with connected cars and innovative service packages, goes on sale in China next month.
Geely previously acquired Volvo from Ford Motor Co. in 2010, and bought the London Taxi Co.--recently rebadged as the London Electric Vehicle Co.--in 2013.
William Boston in Berlin contributed to this article
Write to Trefor Moss at Trefor.Moss@wsj.com
Credit: By Trefor Moss
Subject: Automobile industry; Subscriptions; Hybrid vehicles; Automobile sales; Electric vehicles
Location: China Beijing China United States--US Europe
Company / organization: Name: Zhejiang Geely Holding Group Co Ltd; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Oct 17, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1951561338
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1951561338?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-25
Database: The Wall Street Journal
Eviation, Electric-Plane Startup, Is WSJ D.Live Audience Favorite; Israel-based startup is hoping to build a company it describes as 'Uber meets Tesla in the sky'
Author: Brown, Eliot
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Oct 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: LAGUNA BEACH, Calif.--Eviation, a startup developing self-flying, electric passenger planes, was crowned the audience choice for the most promising startup at The Wall Street Journal's WSJ D. Live technology conference Tuesday evening.
The Israel-based startup is hoping to build a company it describes as "Uber meets Tesla in the sky," using self-piloting, lightweight aircraft that can whisk up to nine passengers each at 280 miles an hour on demand. With the aircraft still in planning, it is an ambitious vision that would require rapid changes to U.S. aviation, a highly regulated and crowded industry where self-flying and electric planes are still thought by many to be far off.
Eviation won out in the audience choice over five other young companies that made up the Startup Showcase at the conference.
Founders from each of the startups faced off in pitches before three judges--Levi Strauss & Co. Chief Executive Chip Bergh; Philip Krim, CEO of mattress seller Casper Sleep Inc.; and Jenny Lee, managing partner at venture-capital firm GGV Capital. Sitting on white fabric director's chairs on an outdoor stage overlooking the Pacific Ocean, the judges peppered the founders with questions on their business models.
In the end, the judges unanimously went with a different choice than Eviation, all three favoring Laughly, a comedy-streaming service that claims 30,000 monthly active users who pay for something akin to a Netflix of stand-up comedy.
But Eviation, helmed by Omer Bar-Yohay, won over the crowd. Mr. Bar-Yohay, dressed in a dark, pinstripe suit, spoke about the plane in epoch-shifting terms, comparing it to the shift from horses to highways. Highways, he said in a slide presentation "gave us traffic, and they gave us the suburbs ... is this the last paradigm shift?"
Eviation's planned aircraft, shaped similar to many military drones, is designed to be about 36 feet long, and very low-cost, he said.
Others in the startup showcase include:
-KinTrans, a sign-language translator that aims to read sign language made by a human, transcribe it, and play it back with voice.
-Hurdl, which makes low-cost, wirelessly connected LED wristbands meant for concerts and other live events, aimed at making more ways to allow musicians to interact with the audience.
-Bounce Imaging, a Buffalo-based company that makes tossable cameras for law enforcement to see into rooms or around corners.
-My Jomo, which makes small, round digital screens worn by retail salespeople that can flash discount promotions or a person's name to draw in consumers.
Write to Eliot Brown at eliot.brown@wsj.com
Credit: By Eliot Brown
Subject: Aircraft; Audiences; Startups
Location: United States--US Pacific Ocean
People: Bergh, Chip
Company / organization: Name: GGV Capital; NAICS: 523910; Name: Levi Strauss & Co; NAICS: 315220, 315240; Name: Casper Sleep Inc; NAICS: 337910; Name: Netflix Inc; NAICS: 512120, 518210, 532230
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Oct 18, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1951799704
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1951799704?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Reliability Ratings for Electric Cars Get a Boost; Consumer Reports says Chevrolet Bolt, Tesla Model 3 should require less maintenance than gasoline-powered vehicles
Author: Roberts, Adrienne
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Oct 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Auto makers struggling to sell drivers on electric cars can look forward to one advantage of adding more battery-powered vehicles to their fleets: beefing up their reliability ratings thanks to the electric cars' simplicity.
Influential product-review magazine Consumer Reports issued its latest reliability survey Thursday, saying General Motors Co.'s Chevrolet Bolt and the Tesla Inc.'s Model 3--two long-range electric cars selling for about $30,000--will have above average or average reliability respectively and should require less maintenance than regular gasoline-powered vehicles. The forecast is based on the fact neither car has an engine nor transmission, which are components made up of a lot of parts and require several years to engineer.
The prediction bodes well for other auto makers racing to make affordable electric cars that can travel over 200 miles on a charge. Although there is currently limited demand for long-range EVs, car companies plan to introduce significantly more of them to meet government regulations and keep up with expected shifts in consumer tastes.
GM and Tesla could both use a boost in the reliability department.
GM brands, for instance, typically perform worse than most other brands in their surveys, according to Jake Fisher, Consumer Reports' head of automotive testing. Although released in January, the Bolt is already Chevy's best-performing car when it comes to reliability, he said, a rare distinction in an industry where cars often need to be on sale for a considerable amount of time to work out "growing pains."
GM has sold 14,302 Bolts through September.
While Tesla's Model S sedan has generally been praised by Consumer Reports since going on sale in 2012, Tesla's more-recent launch of the Model X SUV has faced criticism from other product testers. The Model 3, just now going on sale, has had hiccups out of the gate with major portions of the sedan still being built by hand away from automated production line as recent as September.
Mr. Fisher said although there isn't data or real-world driving tests available yet, the Model 3 could succeed in the reliability department because it "has similar technologies as the Model S and that's been in production four to five years," he said. "The Model 3 is the least complicated vehicle in Tesla's lineup--it's the Chromebook of cars," referring to Alphabet Inc.'s Google-based platform for ultrasimple laptops.
Tesla, which has been unhappy with past Consumer Reports studies of its vehicles, reiterated past grievances with the magazine and questioned the forecast that the Model 3 would have average performance out of the gate.
"Regarding its predicted reliability rating for Model 3, it's important to note that Consumer Reports has not yet driven a Model 3, let alone do they know anything substantial about how the Model 3 was designed and engineered," a Tesla spokeswoman said in a statement.
Consumer Reports had yanked its recommendation for the Model S two years ago, citing quality complaints from owners like body squeaks and rattles and sunroof leaks. That marked a surprising turn for Consumer Reports, which until then had been a strong advocate for the Silicon Valley electric-car maker. The magazine's seal of approval had been a central claim in Tesla's marketing.
Tesla is seventh from the bottom out of 27 manufacturers in the 2017 reliability study, with rankings helped by the Model S, which the magazine recommended once again last year. The Model X, meanwhile, is tied with the Cadillac Escalade as the worst-performing vehicle.
GM's Chevrolet, Cadillac and GMC scored in the bottom third of all brands on issues with models like the GMC Acadia, which has reported problems with the drive system, power equipment and climate system. The Chevrolet Volt, a plug-in hybrid vehicle running on battery power and a backup gasoline engine, is below average for reliability due to the complexity of the design, Mr. Fisher said.
"General Motors places the utmost importance on vehicle quality and customer service," a spokesperson said in an emailed statement. "While we take this study seriously, it is one of several data sources we use to measure customer's satisfaction with our vehicles, including our own internal data, warranty results and JD Power vehicle dependability and initial quality studies--where all GM brands have consistently ranked much higher."
Mr. Fisher said he expects the redesigned Nissan Leaf--which will go 150 miles on a single charge--will have above average reliability. The Leaf, on sale for several years with much lower battery power than the Model 3 and Bolt, has been among the only pure-electric vehicles on sale for a relatively affordable asking price. Nissan sold 10,740 Leafs through October, representing a sliver of the company's overall U.S. sales.
Tim Higgins and Mike Colias contributed to this article
Write to Adrienne Roberts at Adrienne.Roberts@wsj.com
Credit: By Adrienne Roberts
Subject: Automobile industry; Electric vehicles
Company / organization: Name: Consumer Reports; NAICS: 511120; Name: Alphabet Inc; NAICS: 551114
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Oct 19, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1952679267
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1952679267?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
GM's Stock Gets a Charge as It Gears Up to Take On Tesla; Driverless-car and other emerging-technology bets may be helping the largest U.S. auto maker shrug off its 'dinosaur' image
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Oct 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: After spending years frustrated by Wall Street's lack of interest in record profits, a fortress balance sheet and a revamped approach to selling cars, General Motors Co. has decided to change its story. And investors are finally listening.
GM reports third-quarter earnings Tuesday following a flurry of announcements about rapid advances in driverless-car development. The company's share price--stuck in neutral during Chief Executive Mary Barra's nearly four-year tenure--is springing to life, trading well above the previous highs notched since GM's 2010 initial public offering.
The company's $66.5 billion market value firmly outpaces Ford Motor Co., whose shares have languished in recent years, and Fiat Chrysler Automobiles, which is valued far below GM but trading near a several-year high amid rampant takeover rumors. But more important than beating Detroit rivals, the largest U.S. auto maker appears to be lapping Tesla Inc., a small electric-vehicle maker held up as the auto industry's future.
Tesla, founded by billionaire Elon Musk, stole the crown as highest-valued domestic auto maker earlier this year. Production hiccups with its new Model 3 mass-market sedan , however, have dampened enthusiasm for Mr. Musk's plan.
"We see potential for investors, both auto and non-auto, to view GM's progress and Tesla's production challenges as a sign that some of Tesla's market cap needs to go back to GM," Barclays auto analyst Brian Johnson wrote in a recent note to investors. GM has been underestimated in the emerging automotive tech race, he said, and shouldn't necessarily take a back seat to Silicon Valley's newcomers, including Alphabet Inc.'s Waymo and Uber Technologies Inc.
A GM spokesman said that while the company is pleased with its recent share gains, it continues to believe the stock is undervalued. GM remains focused on "delivering strong and consistent results" and generating higher returns for shareholders, he said.
Ms. Barra began building the case for GM as a new-mobility pioneer in early 2016, sinking $500 million in ride-hailing company Lyft Inc. and purchasing Cruise Automation, a Silicon Valley startup focused on autonomous cars. The value of Lyft has doubled since then, and Cruise's staff has grown to about 350 from 40, with employees saying GM's ownership provides a smoother pathway to the mass production of robotaxis.
Cruise earlier this month acquired Strobe Inc., a company that makes low-cost "lidar," or the laser/radar technology that serves as an autonomous car's eyes and ears. These developments, combined with momentum on electric vehicles, have killed the suggestion that GM is "a dying dinosaur," Mr. Johnson said.
The pressure, however, isn't off Ms. Barra as she chases the lofty target of being the world's most valued automotive company. Joseph Spak, an RBC Capital Markets auto analyst, said investors need to question whether GM is adequately funding technology play that "may burn cash for a long time." And there is no clear strategy to make money on self-driving cars, electric vehicles and ride sharing.
The car business, meanwhile, faces headwinds, with GM poised to report a 33% decline in operating profit for the quarter ended Sept. 30. GM's North American production declined 25% during the third quarter, according to WardsAuto.com.
Lower output is due to slumping demand for GM's bread-and-butter family cars, luxury sedans and compact vehicles, as well as other production-related factors. Revenue is booked at the point of production, so slower factories likely hit GM's top line hard.
Adding further pressure is the company's increased reliance on sales incentives during the summer as it cleared excess inventory off dealer lots and spent heavily on disaster-relief programs in September.
Ms. Barra, however, is reducing GM's exposure to volatile markets at a time when many of her competitors are embracing them. GM closed the sale of its money-losing European business in August, shortly after exiting the Indian and Russian markets. More recently, it consolidated all of its remaining non-China international businesses into a single operation and shuttered production in Australia.
These moves could help GM maintain its record profit clip, even if volumes in China and the U.S. fall off all-time highs. The company forecasts 10% operating margins in its North America business, mirroring a profit haul typically enjoyed only by luxury brands or Toyota Motor Corp.
Ms. Barra's blueprint contrasts domestic counterparts. Analysts say her ability to create more daylight between GM and its rivals will further bolster the case for an outsized valuation.
Fiat Chrysler CEO Sergio Marchionne has been slow to embrace moonshot ideas and has instead focused on finding a partner capable of boosting the company's scale. Even though Ford is moving ahead in driverless cars and EVs under a new CEO, the No. 2 U.S. auto maker's progress is murky and the company's new cost-cutting efforts appear to be the central narrative. Both companies report earnings next week.
Tesla, reporting Nov. 1, has a well-publicized list of challenges, will post deep losses for the July through September period, according to analyst expectations. The company finished the latest quarter with $3 billion in cash and plans to spend $2 billion in the second half to make way for the Model 3.
Write to John D. Stoll at john.stoll@wsj.com
Related
* China's Road to Electric-Car Domination Is Driven in Part by Batteries (Oct. 21)
* Reliability Ratings for Electric Cars Get a Boost (Oct. 19)
* GM to Test Fleet of Self-Driving Cars in New York (Oct. 17)
* U.S. Auto Makers Step Up Plans for Electric Vehicles (Oct. 2)
Credit: By John D. Stoll
Subject: Automobile industry; Corporate profits; Ride sharing services; Investments; Electric vehicles; Competition
Location: United States--US Detroit Michigan China
People: Musk, Elon
Company / organization: Name: Alphabet Inc; NAICS: 551114; Name: Fiat Chrysler Automobiles NV; NAICS: 336111; Name: Lyft Inc; NAICS: 518210; Name: Ford Motor Co; NAICS: 333924, 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Oct 22, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuestdocument ID: 1953638546
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1953638546?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Strikes Deal With Shanghai to Build Factory in China; Arrangement could enable electric-car maker to slash production costs; firm would still likely incur 25% import tariff
Author: Higgins, Tim; Moss, Trefor; Dou, Eva
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Oct 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Electric-car maker Tesla Inc. has reached an agreement to set up its own manufacturing facility in Shanghai, according to people briefed on the plan, a move that could help the company gain traction in China's fast-growing EV market.
The deal with Shanghai's government will allow the Silicon Valley auto maker to build a wholly owned factory in the city's free-trade zone, these people said. This arrangement, the first of its kind for a foreign auto maker, could enable Tesla to slash production costs, but it would still likely incur China's 25% import tariff.
Tesla is currently working with the Shanghai government about details of the deal's announcement, such as timing, one of these people said. The effort comes as President Donald Trump, who has been critical of China's trade policies , prepares to visit Beijing early next month.
A Tesla spokesman didn't have a comment beyond reiterating the company's previous statement in June that it planned to "clearly define" production plans in China by year's end. The Shanghai government didn't reply to a request for comment.
China's electric-vehicle market--already the world's largest--is primed for growth. The Chinese government is targeting seven million EV sales a year by 2025, up from 351,000 last year, and in September it ordered all auto makers already operating in China to start producing EVs by 2019 . Officials have also said they are working on a plan to ban gasoline cars.
China had previously circulated a proposal that would allow electric-car makers into the country without local partners if they were to locate in the so-called free-trade zones. The government set up the country's first such zone in Shanghai in 2013, and has since approved 10 more around the country.
Until now, foreign auto makers have built cars in China through joint ventures with local manufacturers. That allows them to avoid the 25% tariff on autos, but also forces them to split profits, and potentially share technology, with the local partner--something that has tripped up Tesla's previous efforts to expand there.
Under current rules, the cars Tesla builds in the free-trade zone would still count as imports and incur the tariff. Auto analysts in Shanghai doubt the Chinese government has any incentive to give Tesla special treatment.
"Government regulators examine every deal and try not to set a precedent," said Bill Russo, chief executive of Automobility, a Shanghai-based consultancy, and a former Chrysler executive. "Whatever deal Tesla gets, others will want it too."
A plant in Shanghai's free-trade zone still has clear benefits, Mr. Russo said. It would give Tesla a base from which to export to the region, while offering proximity to the Chinese supply chain, thereby lowering production costs and the sale price of Tesla cars sold there. Today, a Tesla costs roughly 50% more in China than it does in the U.S.
Manufacturing in Shanghai would also put Tesla in good standing with the Chinese government, said Michael Dunne, an auto-industry consultant who spent years in Asia. Having Tesla cars built on Chinese soil would please Beijing officials, he said, which "in turn, will give Tesla goodwill leverage to negotiate better China market-access terms in the future."
The auto maker reported more than $1 billion in revenue in China for 2016 on sales of roughly 11,000 imported vehicles, representing about 15% of total revenue. Sales in China were up from about $319 million in 2015.
In June, Tesla revealed it was in talks with the Shanghai government about the possibility of opening a factory and reiterated that it aims to define its China production plans by year's end. A month earlier, Chief Executive Elon Musk cryptically had told analysts that a change in China rules would be "good timing."
Mr. Musk has said Tesla could cut prices in China by one-third by reducing shipping costs and avoiding import duties.
Mr. Musk has previously signaled a desire to expand manufacturing capabilities in China and Europe. The company, which manufactures its vehicles in Fremont, Calif., does final assembly at a facility in Tilburg, Netherlands, for the European market.
Fremont is currently under pressure to expand manufacturing capacity to meet Mr. Musk's ambitious goals of making 10,000 Model 3 sedans a week by the end of next year. The Model 3, priced starting at $35,000, is part of his vision for expanding the auto maker beyond selling luxury niche vehicles.
While the cost of introducing the new vehicle has left the auto maker with little cash to spare, investors' enthusiasm for Mr. Musk's vision has helped push shares of the company up more than 50% this year so far, propelling Tesla's market value to rival General Motors Co.'s.
Chinese internet company Tencent Holdings Ltd. acquired a 5% stake in Tesla in March, giving Mr. Musk a powerful ally in China.
Yang Jie in Beijing contributed to this article.
Write to Tim Higgins at Tim.Higgins@WSJ.com , Trefor Moss at Trefor.Moss@wsj.com and Eva Dou at eva.dou@wsj.com
Credit: Tim Higgins, Trefor Moss, Eva Dou
Subject: Acquisitions & mergers; Automobile industry; Manufacturing; Foreign trade zones; Automobile sales
Location: China Beijing China
People: Trump, Donald J
Company / organization: Name: Automobility; NAICS: 336390; Name: US Manufacturing; NAICS: 339940
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Oct 22, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1953834806
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1953834806?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Tesla Plugs In Own China Plant --- Electric-car maker reaches deal to build a factory in Shanghai without local partner
Author: Higgins, Tim; Moss, Trefor; Dou, Eva
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]23 Oct 2017: B.1.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. has reached an agreement to set up its own manufacturing facility in Shanghai, said people briefed on the plan, a move that could help the car maker gain traction in China's fast-growing electric-vehicle market.
The deal with Shanghai's government will allow the Silicon Valley company to build a wholly owned factory in the city's free-trade zone, these people said. This arrangement, the first of its kind for a foreign auto maker, could enable Tesla to cut production costs, but it would still likely incur China's 25% import tariff.
Tesla is working with the Shanghai government about details of the deal's announcement, such as timing, one of these people said. The effort comes as President Donald Trump, who has been critical of China's trade policies, prepares to visit Beijing early next month.
A Tesla spokesman didn't have a comment beyond reiterating the company's previous statement in June that it planned to "clearly define" production plans in China by year's end. The Shanghai government didn't reply to a request for comment.
China's electric-vehicle market -- already the world's largest -- is primed for growth. The Chinese government is targeting seven million EV sales a year by 2025, up from 351,000 last year, and in September it ordered all auto makers already operating in China to start producing EVs by 2019. Officials have also said they are working on a plan to ban gasoline cars.
China had previously circulated a proposal that would allow electric-car makers into the country without local partners if they were to locate in the free-trade zones. The government set up the country's first such zone in Shanghai in 2013 and has since approved 10 more around the country.
Until now, foreign auto makers have built cars in China through joint ventures with local manufacturers. That allows them to avoid the 25% tariff on autos, but also forces them to split profits, and potentially share technology, with the local partner -- something that has tripped up Tesla's previous efforts to expand there.
Under current rules, the cars Tesla builds in the free-trade zone would still count as imports and incur the tariff. Auto analysts in Shanghai doubt the Chinese government has any incentive to give Tesla special treatment.
"Government regulators examine every deal and try not to set a precedent," said Bill Russo, chief executive of Automobility, a Shanghai-based consultancy. "Whatever deal Tesla gets, others will want it too."
A plant in Shanghai's free-trade zone still has clear benefits, Mr. Russo said. It would give Tesla a base from which to export to the region, while offering proximity to the Chinese supply chain, thereby lowering production costs and the sale price of Tesla cars sold there. Today, a Tesla costs roughly 50% more in China than it does in the U.S.
Manufacturing in Shanghai would also put Tesla in good standing with the Chinese government, said Michael Dunne, an auto-industry consultant who spent years in Asia. Having Tesla cars built on Chinese soil would please Beijing officials, he said, which "in turn, will give Tesla goodwill leverage to negotiate better China market-access terms."
The auto maker reported more than $1 billion in revenue in China for 2016 on sales of roughly 11,000 imported vehicles, representing about 15% of total revenue. Sales in China were up from about $319 million in 2015.
Chief Executive Elon Musk has said Tesla could cut prices in China by one-third by reducing shipping costs and avoiding import duties.
Mr. Musk has previously signaled a desire to expand manufacturing capabilities in China and Europe. The company, which manufactures its vehicles in Fremont, Calif., does final assembly at a facility in Tilburg, Netherlands, for the European market.
Fremont is under pressure to expand manufacturing capacity to meet Mr. Musk's ambitious goals of making 10,000 Model 3 sedans a week by the end of next year. The Model 3, priced starting at $35,000, is part of his vision for expanding the auto maker beyond selling luxury niche vehicles.
While the cost of introducing the new vehicle has left the auto maker with little cash to spare, investors' enthusiasm for Mr. Musk's vision has helped push shares of the company up more than 50% this year so far, propelling Tesla's market value to rival General Motors Co.'s.
Chinese internet company Tencent Holdings Ltd. acquired a 5% stake in Tesla in March, giving Mr. Musk a powerful ally in China.
---
Yang Jie in Beijing contributed to this article.
Credit: Tim Higgins, Trefor Moss, Eva Dou
Subject: Foreign trade zones; Factories; Electric vehicles
Location: China
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2017
Publication date: Oct 23, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1953835775
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1953835775?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-12-06
Database: The Wall Street Journal
If Tesla Wants to Go Mainstream in China, It Needs to Cut Prices; Plan to expand from luxury end to mass market will run into lots of local traffic; tariff barrier likely to stay in place
Author: Moss, Trefor
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Oct 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: SHANGHAI--The Tesla Inc. brand is becoming popular in China. But the electric-car maker's plan to establish a factory here raises the question, Is it popular enough?
Tesla has carved out a lucrative niche among wealthy buyers seeking brand cachet, but to reach the huge mainstream market it "will need to lower its costs as soon as possible," said Yale Zhang, managing director of Automotive Foresight, a Shanghai-based consultancy.
Emboldened by strong sales of imported, high-end cars and by an anticipated boom in electric vehicles in China, Tesla has struck a deal to build its first overseas plant in the Shanghai free-trade zone , The Wall Street Journal reported on Sunday.
Tesla didn't comment beyond referring to a June statement in which it said it was in talks with Shanghai authorities about a factory.
Chief Executive Elon Musk has significant star power in China, where he is regularly praised in the media as a tech visionary. That has helped the upstart become the only foreign maker to make significant inroads into China's electric-vehicle market--despite being the only one without a local base.
Tesla sold roughly 12,000 imported cars in the first nine months of this year, up from an estimated 11,000 in 2016 and good for 4% of China's plug-in market, according to EV Sales, a website tracking the sector. Tesla hasn't revealed unit sales figures, but says China accounted for $1.1 billion of its $7 billion revenue last year, second only to the U.S.
A 25% tariff on imported cars means Tesla's Chinese customers pay far more than their American counterparts: The Model S starts at $106,000 on Chinese auto website Yiche.com, compared with the recommended U.S. retail price of $74,500.
Zhou Lixun said she bought a $166,000 Model X for her business partner, who owns an auto-parts company in Beijing, earlier this year. "There are other EV brands, but nothing else at the top end," said Ms. Zhou. "We think Tesla is high-tech, and it makes us feel young and fashionable."
Now Tesla is seeking to appeal to a much broader customer base. Its China strategy is to become the first foreign auto maker to build a wholly owned plant, according to people familiar with the company's plans. Not having to form a joint venture with a local company will allow it to safeguard its technology and retain 100% of profits.
The drawback is that cars built in a free-trade zone will almost certainly be subject to the 25% tariff, auto analysts say. The Shanghai government didn't respond to a request for comment. That could be a deal breaker for potential buyers of the mass-market Model 3, which starts at $35,000 in the U.S.
"The people who would buy that car care about their money," Mr. Zhang said.
By effectively prioritizing control over cost, Tesla will find it harder to sell enough cars to justify building a factory whose annual production capacity analysts estimate at 150,000 vehicles--especially given the tariff-free competition from an expanding pack of domestic EV rivals.
Other foreign auto makers are joining the race. Last week Polestar, the new high-performance EV subsidiary of Volvo Cars, unveiled its first vehicle in Shanghai. Polestar executives said the cars--which will be built in China and so escape tariffs--were designed as a direct challenge to Tesla's Model 3.
A Tesla dealer in the western city of Chengdu said demand is already strong, but that local production would boost sales even more. Right now, he said, it takes a month to ship a Tesla from the U.S. to China, and then two weeks more to deliver it to the buyer.
Kersten Zhang in Beijing contributed to this article.
Write to Trefor Moss at Trefor.Moss@wsj.com
Credit: By Trefor Moss
Subject: Automobile industry; Foreign trade zones; Production capacity; Automobile sales; Tariffs; Vehicles
Location: China Beijing China United States--US
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Oct 23, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1953853017
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1953853017?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
If Tesla Wants to Go Mainstream in China, It Needs to Cut Prices; Plan to expand from luxury end to mass market will run into lots of local traffic; tariff barrier likely to stay in place
Author: Moss, Trefor
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Oct 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: SHANGHAI--The Tesla Inc. brand is becoming popular in China. But the electric-car maker's plan to establish a factory here raises the question, Is it popular enough?
Tesla has carved out a lucrative niche among wealthy buyers seeking brand cachet, but to reach the huge mainstream market it "will need to lower its costs as soon as possible," said Yale Zhang, managing director of Automotive Foresight, a Shanghai-based consultancy.
Emboldened by strong sales of imported, high-end cars and by an anticipated boom in electric vehicles in China, Tesla has struck a deal to build its first overseas plant in the Shanghai free-trade zone , The Wall Street Journal reported on Sunday.
Tesla didn't comment beyond referring to a June statement in which it said it was in talks with Shanghai authorities about a factory.
Chief Executive Elon Musk has significant star power in China, where he is regularly praised in the media as a tech visionary. That has helped the upstart become the only foreign maker to make significant inroads into China's electric-vehicle market--despite being the only one without a local base.
Tesla sold roughly 12,000 imported cars in the first nine months of this year, up from an estimated 11,000 in 2016 and good for 4% of China's plug-in market, according to EV Sales, a website tracking the sector. Tesla hasn't revealed unit sales figures, but says China accounted for $1.1 billion of its $7 billion revenue last year, second only to the U.S.
A 25% tariff on imported cars means Tesla's Chinese customers pay far more than their American counterparts: The Model S starts at $106,000 on Chinese auto website Yiche.com, compared with the recommended U.S. retail price of $74,500.
Zhou Lixun said she bought a $166,000 Model X for her business partner, who owns an auto-parts company in Beijing, earlier this year. "There are other EV brands, but nothing else at the top end," said Ms. Zhou. "We think Tesla is high-tech, and it makes us feel young and fashionable."
Now Tesla is seeking to appeal to a much broader customer base. Its China strategy is to become the first foreign auto maker to build a wholly owned plant, according to people familiar with the company's plans. Not having to form a joint venture with a local company will allow it to safeguard its technology and retain 100% of profits.
The drawback is that cars built in a free-trade zone will almost certainly be subject to the 25% tariff, auto analysts say. The Shanghai government didn't respond to a request for comment. That could be a deal breaker for potential buyers of the mass-market Model 3, which starts at $35,000 in the U.S.
"The people who would buy that car care about their money," Mr. Zhang said.
By effectively prioritizing control over cost, Tesla will find it harder to sell enough cars to justify building a factory whose annual production capacity analysts estimate at 150,000 vehicles--especially given the tariff-free competition from an expanding pack of domestic EV rivals.
Other foreign auto makers are joining the race. Last week Polestar, the new high-performance EV subsidiary of Volvo Cars, unveiled its first vehicle in Shanghai. Polestar executives said the cars--which will be built in China and so escape tariffs--were designed as a direct challenge to Tesla's Model 3.
A Tesla dealer in the western city of Chengdu said demand is already strong, but that local production would boost sales even more. Right now, he said, it takes a month to ship a Tesla from the U.S. to China, and then two weeks more to deliver it to the buyer.
Kersten Zhang in Beijing contributed to this article.
Write to Trefor Moss at Trefor.Moss@wsj.com
Credit: By Trefor Moss
Subject: Automobile industry; Foreign trade zones; Production capacity; Automobile sales; Tariffs; Vehicles
Location: China Beijing China United States--US
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Oct 24, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1954089351
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1954089351?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Tesla Likely to Face Price Test in China
Author: Moss, Trefor
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 Oct 2017: B.3.
ProQuest document link
Abstract: None available.
Full text: SHANGHAI -- The Tesla Inc. brand is becoming popular in China. But the electric-car maker's plan to establish a factory here raises the question: Is it popular enough?
Tesla has carved out a lucrative niche among wealthy buyers seeking brand cachet, but to reach the huge mainstream market it "will need to lower its costs as soon as possible," said Yale Zhang, managing director of Automotive Foresight, a Shanghai-based consultancy.
Emboldened by strong sales of imported high-end cars and by an anticipated boom in electric vehicles in China, Tesla has struck a deal to build its first overseas plant in the Shanghai free-trade zone, The Wall Street Journal reported on Sunday.
Tesla didn't comment beyond referring to a June statement in which it said it was in talks with Shanghai authorities about a factory.
Chief Executive Elon Musk is praised in the Chinese media as a tech visionary. That has helped the upstart become the only foreign maker to make significant inroads into China's electric-vehicle market -- despite being the only one without a local base.
Tesla sold roughly 12,000 imported cars in the first nine months of 2017, up from an estimated 11,000 in 2016 and good for 4% of China's plug-in market, according to EV Sales, a website tracking the sector. Tesla hasn't disclosed unit sales figures, but says China accounted for $1.1 billion of its $7 billion revenue last year, second only to the U.S.
A 25% tariff on imported cars means Tesla's Chinese customers pay far more than their American counterparts: The Model S starts at $106,000 on Chinese auto website Yiche.com, compared with the recommended U.S. retail price of $74,500.
Zhou Lixun said she bought a $166,000 Model X for her business partner, who owns an auto-parts company in Beijing, earlier this year. "There are other EV brands, but nothing else at the top end," said Ms. Zhou. "We think Tesla is high-tech, and it makes us feel young and fashionable."
Now Tesla is seeking to appeal to a much broader customer base. Its China strategy is to become the first foreign auto maker to build a wholly owned plant, according to people familiar with the company's plans. Not having to form a joint venture with a local company will allow it to safeguard its technology and retain 100% of profits.
The drawback is that cars built in a free-trade zone will almost certainly be subject to the 25% tariff, auto analysts say. The Shanghai government didn't respond to a request for comment. That could be a deal breaker for potential buyers of the mass-market Model 3, which starts at $35,000 in the U.S. "The people who would buy that car care about their money," Mr. Zhang said.
---
Kersten Zhang in Beijing contributed to this article.
Credit: By Trefor Moss
Subject: Foreign trade zones; Automobile sales; Factories; Electric vehicles
Location: China
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Oct 24, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1954180028
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1954180028?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-12-07
Database: The Wall Street Journal
Tesla Faces Labor Discord as It Ramps Up Model 3 Production; Effort to build first electric car for the masses could face resistance as Musk pushes his ambitious goals
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Oct 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: In early 2016, a crisis unfolded at Tesla Inc.'s electric-car factory. The company's new Model X sport-utility vehicles were stacking up in the repair yard with misaligned parts.
Tesla took the unusual step of placing more than a dozen workers at the end of the assembly line who whacked doors and side panels into shape with rubber hammers, according to people familiar with the matter. The company suffered months of delays as it learned to build the Model X, leading to long hours and injuries as factory workers rushed to meet lofty goals, say people familiar with the effort.
Chief Executive Elon Musk has said Tesla fixed the quality and design problems and improved safety at the Fremont, Calif., factory. But as Tesla cranks up production on the Model 3 sedan, it is having to wrestle with mounting signs of labor unrest that could disturb the Silicon Valley company's effort to build its first electric car for the masses.
Several workers say the quality and design issues stemming from the Model X assembly have left them tired and worried about strenuous working conditions re-emerging as the company falls behind in meeting Mr. Musk's ambitious goal of producing 5,000 cars a week by year's end.
Tesla made just 260 Model 3 cars during the third quarter, missing its projection of more than 1,500. The factory's body shop wasn't ready at the start of production in July and workers were hand-making portions of the car as recently as September, The Wall Street Journal reported.
Mr. Musk, who acknowledged Tesla has entered "production hell," will likely speak about Model 3 production Wednesday when the company reports quarterly results.
In a statement, Tesla reiterated that the Model 3 is easier and safer to build than the Model X. "The challenge is fine-tuning the bring-up of certain automated production processes. However, this will ultimately result in higher volumes and even safer production for our employees."
The production ramp-up has stirred the United Automobile Workers union, which since last fall has rented an office about a mile from Tesla's factory and has spent thousands of dollars to put organizers in a local hotel, according to union records and a person familiar with the matter.
The UAW also hired a public-relations firm that specializes in politics and joined in filing complaints against the company with the National Labor Relations Board, claiming Tesla harassed workers trying to unionize. An administrative judge expects to hear the complaint in November. Tesla has denied wrongdoing, saying the effort was motivated "only to generate headlines."
The union last Wednesday filed another complaint, saying Tesla fired some workers in October because they were union activists. Tesla said the workers were laid off because of performance.
The labor discord raises questions whether the factory will struggle with the demands of a leader whose vision of Tesla is as much a software company as it is an auto maker, one that bucks tradition and draws its strength and creativity from Silicon Valley.
Mr. Musk has proven doubters wrong by creating a coveted luxury brand with electric cars. But at $35,000, the Model 3 will test whether Tesla's manufacturing prowess can produce vehicles at a projected rate of a half-million a year.
"If there ever was an opening [for the union], this is it," said Kristin Dziczek, a longtime labor analyst at the Center for Automotive Research in Ann Arbor, Mich.
Signs of trouble for the Model X began in 2015 when, just weeks ahead of production, Tesla changed the SUV's signature feature: rear passenger doors that opened upward using a hydraulic system. Tesla said the supplier had difficulty building the complicated door, so it switched to a more traditional engineering solution.
Adding to the complications, in early 2016 Tesla managers realized the vehicles' frames were flexing too much during the build process, throwing the parts out of alignment, according to people who worked on the Model X.
With quarterly production targets looming, Tesla managers required longer hours and weekend work. One hourly worker recalled working 13 straight days. "They went by with carts and dollies full of Red Bull and threw them out to everybody," he said. "It felt like we literally lived there."
Unlike traditional unionized factories that schedule overtime in advance, Tesla's workweek could change with little notice, workers said. Several of them said they feared losing their jobs if they didn't work the overtime.
To address workers' concerns, Tesla said it added a third shift in the fourth quarter of last year, reducing overtime by more than 60%.
Workers, meanwhile, said they noticed a change in irregular overtime this year after hourly worker Jose Moran wrote an open letter in February to Mr. Musk laying out complaints as part of a union organizing effort. Mr. Moran complained of unsafe working conditions and said the company was forcing overtime, claims Tesla says aren't correct.
Tesla recorded 8.8 injuries per 100 workers in 2015, higher than the industry average of 6.7, according to an analysis by Worksafe using company data. Tesla's injury rate last year was 8.1, though an industrywide comparison isn't yet available.
In May, Tesla said the recordable incident rate dropped to 4.6 during the first quarter, ahead of Model 3 production.
The company also said it employs an ergonomics team to address repetitive labor in the design of making the Model 3.
People who worked on the Model X say injuries likely multiplied during the nine-month production ramp-up because Tesla's design team didn't factor in enough of the effects of repetitive labor. For example, Tesla designed middle-row seats to appear like they rested on a pedestal, requiring dozens of extra bolts. Those bolts kept stripping, so workers had to crawl into the vehicle to twist each one by hand, these people said.
Tesla built a flawless version of the Model X in April of last year and celebrated the milestone at about 3 a.m., Mr. Musk said. He later acknowledged that Tesla went too far with the Model X. "We got overconfident and created something great that probably will never be made again and perhaps should not be," he told shareholders in June.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Working conditions; Manufacturing; Factories; Workers; Electric vehicles; Injuries
Company / organization: Name: United Automobile Aerospace & Agricultural Implement Workers of America--UAW; NAICS: 813930; Name: National Labor Relations Board--NLRB; NAICS: 926150; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Oct 31, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1957698551
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1957698551?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-01
Database: The Wall Street Journal
Tesla Hits Labor Discord on Model 3
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]01 Nov 2017: B.1.
ProQuest document link
Abstract: None available.
Full text: In early 2016, a crisis unfolded at Tesla Inc.'s electric-car factory. The company's new Model X sport-utility vehicles were stacking up in the repair yard with misaligned parts.
Tesla took the unusual step of placing more than a dozen workers at the end of the assembly line to whack doors and side panels into shape with rubber hammers, according to people familiar with the matter. The company suffered months of delays as it learned to build the Model X, leading to long hours and injuries as factory workers rushed to meet lofty goals, say people familiar with the effort.
Chief Executive Elon Musk has said Tesla fixed the quality and design problems and improved safety at the Fremont, Calif., factory. But as Tesla cranks up production on the Model 3 sedan, it is having to wrestle with mounting signs of labor unrest that could disturb the Silicon Valley company's effort to build its first electric car for the masses.
Several workers say the quality and design issues stemming from the Model X assembly have left them tired and worried about strenuous working conditions re-emerging as the company falls behind in meeting Mr. Musk's ambitious goal of producing 5,000 cars a week by year's end.
Tesla made just 260 Model 3 cars during the third quarter, missing its projection of more than 1,500. The factory's body shop wasn't ready at the start of production in July and workers were hand-making portions of the car as recently as September, The Wall Street Journal reported.
Mr. Musk, who acknowledged Tesla has entered "production hell," will likely speak about Model 3 production Wednesday when the company reports quarterly results.
In a statement, Tesla reiterated that the Model 3 is easier and safer to build than the Model X. "The challenge is fine-tuning the bring-up of certain automated production processes. However, this will ultimately result in higher volumes and even safer production for our employees."
The production ramp-up has stirred the United Automobile Workers union, which since last fall has rented an office about a mile from Tesla's factory and has spent thousands of dollars to put organizers in a local hotel, according to union records and a person familiar with the matter.
The UAW also hired a public-relations firm that specializes in politics and joined in filing complaints against the company with the National Labor Relations Board, claiming Tesla harassed workers trying to unionize. An administrative judge expects to hear the complaint in November. Tesla has denied wrongdoing, saying the effort was motivated "only to generate headlines."
The union last Wednesday filed another complaint, saying Tesla fired some workers in October because they were union activists. Tesla said the workers were laid off because of performance.
The labor discord raises questions whether the factory will struggle with the demands of a leader whose vision of Tesla is as much a software company as it is an auto maker, one that bucks tradition and draws its strength and creativity from Silicon Valley.
Mr. Musk has proven doubters wrong by creating a coveted luxury brand with electric cars. But at $35,000, the Model 3 will test whether Tesla's manufacturing prowess can produce vehicles at a projected rate of a half-million a year.
"If there ever was an opening [for the union], this is it," said Kristin Dziczek, a longtime labor analyst at the Center for Automotive Research in Ann Arbor, Mich.
Signs of trouble for the Model X began in 2015 when, just weeks ahead of production, Tesla changed the SUV's signature feature: rear passenger doors that opened upward using a hydraulic system. Tesla said the supplier had difficulty building the complicated door, so it switched to a more traditional engineering solution.
Adding to the complications, in early 2016 Tesla managers realized the vehicles' frames were flexing too much during the build process, throwing the parts out of alignment, according to people who worked on the Model X.
With quarterly production targets looming, Tesla managers required longer hours and weekend work. One hourly worker recalled working 13 straight days. "They went by with carts and dollies full of Red Bull and threw them out to everybody," he said. "It felt like we literally lived there."
Unlike traditional unionized factories that schedule overtime in advance, Tesla's workweek could change with little notice, workers said. Several of them said they feared losing their jobs if they didn't work the overtime.
To address workers' concerns, Tesla said it added a third shift in the fourth quarter of last year, reducing overtime by more than 60%.
Workers, meanwhile, said they noticed a change in irregular overtime this year after hourly worker Jose Moran wrote an open letter in February to Mr. Musk laying out complaints as part of a union organizing effort. Mr. Moran complained of unsafe working conditions and said the company was forcing overtime, claims Tesla says aren't correct.
Tesla recorded 8.8 injuries per 100 workers in 2015, higher than the industry average of 6.7, according to an analysis by Worksafe using company data. Tesla's injury rate last year was 8.1; an industrywide comparison isn't yet available.
In May, Tesla said the recordable incident rate dropped to 4.6 during the first quarter, ahead of Model 3 production.
The company also said it employs an ergonomics team to address repetitive labor in the design of making the Model 3.
People who worked on the Model X say injuries likely multiplied during the nine-month production ramp-up because Tesla's design team didn't factor in enough of the effects of repetitive labor. For example, Tesla designed middle-row seats to appear like they rested on a pedestal, requiring dozens of extra bolts. Those bolts kept stripping, so workers had to crawl into the vehicle to twist each one by hand, these people said.
Tesla built a flawless version of the Model X in April of last year and celebrated the milestone at about 3 a.m., Mr. Musk said.He later acknowledged that Tesla went too far with the Model X. "We got overconfident and created something great that probably will never be made again and perhaps should not be," he told shareholders in June.
Credit: By Tim Higgins
Subject: Manufacturing; Factories; Electric vehicles; Labor disputes; Working conditions; Automobile production
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2017
Publication date: Nov 1, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1958147779
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1958147779?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-01-08
Database: The Wall Street Journal
Tesla Earnings: What to Watch; Auto maker's third-quarter financial report comes amid challenging Model 3 production start
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Nov 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. is expected to release third-quarter financial results after the market closes on Wednesday. Here's what you need to know:
EARNINGS FORECAST: Tesla is expected to post an adjusted loss of $2.28 a share, according to the average estimate of analysts surveyed by Thomson Reuters. That compares to a slight quarterly profit a year earlier--the second in the company's history--and would mark the worst quarter since the final three months of 2015, when Tesla was struggling to ramp up production of the Model X sport-utility vehicle.
REVENUE FORECAST: Third-quarter revenue is forecast to rise to $2.95 billion from $2.3 billion during the same period a year ago. Tesla has said that deliveries of the Model X, Model S sedan and new Model 3 totaled 26,150 during the period, up 4.5% from a year ago. The gains were fueled by the Model X, deliveries of which rose 36%, while the Model S fell 11%. The company delivered just 220 Model 3s.
WHAT TO WATCH:
Production hell: Investors will be looking for details on production delays of the Model 3 sedan and whether Tesla is sticking to its goal of making 5,000 Model 3s a week by year's end. Chief Executive Elon Musk in July cautioned of a coming manufacturing "hell," as the auto maker's factory ramped up production of the Model 3. Tesla had predicted it would make more than 1,500 of the sedans during the quarter but badly missed that goal with just 260. The company has attributed the miss to production bottlenecks. The Wall Street Journal has reported that parts of the body shop weren't in place at the start of production and workers were hand making portions of the car as recently as early September. "While the difficulties in ramping the...Model 3 could very well prove temporary, we do wonder if they could hint at structurally lower profitability for the vehicle" going forward if, for example, the vehicle proves harder to manufacture than intended, Ryan Brinkman, an analyst for J.P. Morgan, said in a note to investors.
Cash Burn: A delay in scaling up the Model 3 could eat into Tesla's cash and investors will be looking for guidance on upcoming spending. Tesla finished the second quarter with $3 billion in cash and said it planned spending of $2 billion in the second half of the year. In August, Tesla sold $1.8 billion in bonds to help pay for the Model 3. Tesla "still has not provided a realistic plan for capex that reflects both the company's ambitions as well as cash generating ability," Jeffrey Osborne, an analyst for Cowen, said in a note to investors. UBS estimates--assuming Tesla needs to keep about $1 billion in operating cash--that the company ended the third quarter with four quarters worth of cash left at its current burn rate. Tesla has about $1.4 billion in debt due by the end of next year and has talked about plans for new factories in Europe and China.
Mass Firings?: The Silicon Valley auto maker has confirmed that some of its more than 33,000 employees were fired last month as part of its annual performance review process but hasn't detailed the extent of the dismissals. The United Automobile Workers union has said that among the hundreds fired were factory workers that were agitating for a union. "No one at Tesla has ever or will ever have any action taken against them based on their feelings on unionization," the company said in a statement. Investors could look for clarity on why Tesla is reducing head count at its factory as it ramps up production.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Tesla Faces Labor Discord as It Ramps Up Model 3 Production
* If Tesla Wants to Go Mainstream in China, It Needs to Cut Prices
(Oct. 23)
* Tesla Strikes Deal With Shanghai to Build Factory in China
(Oct. 22)
Credit: By Tim Higgins
Subject: Automobile industry; Corporate profits; Manufacturing; Factories
Location: China
People: Musk, Elon
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: JPMorgan Chase & Co; NAICS: 522110, 522292, 523110; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Nov 1, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1958189202
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1958189202?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-01
Database: The Wall Street Journal
Tesla Posts Loss, Boosting Pressure to Speed Output of Model 3; Gains in sales of Tesla's Model X sport-utility vehicle helped boost revenue 30%
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Nov 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. warned it will take months longer than expected to reach its goal of making 5,000 Model 3 sedans a week, a significant delay that could put additional pressure on Chief Executive Elon Musk's limited cash pile.
The Silicon Valley electric-car maker had aimed to hit that production threshold by the end of this year, but said on Wednesday it won't reach the milestone until late in the first quarter of next year.
Tesla also reported its worst financial quarter ever, posting a loss of $619 million attributed to common shareholders in the three months that ended on Sept. 30, compared with a rare profit of $22 million a year ago. On an adjusted basis, the company's per-share loss of $2.92 was wider than the $2.28 consensus estimate of analysts surveyed by Thomson Reuters.
The company attributed the primary delay of ramping up the Model 3, which began production in July, to battery-pack assembly at its factory near Reno, Nev.
"The combined complexity of module design and its automated manufacturing process has taken this line longer to ramp than expected," Mr. Musk said in a shareholder letter detailing the company's third quarter.
Expectations for the Model 3, which starts at $35,000, have helped push Tesla's shares up more than 50% this year, giving it a market value that rivals General Motors Co. despite Tesla having never turned an annual profit nor built more than 84,000 vehicles in a year.
Mr. Musk's ability to defy the odds by making Tesla into a global luxury brand is being tested anew with the Model 3, a midprice sedan that he hopes will move the company more into the mainstream. A year ago, Mr. Musk was suggesting that Tesla would begin volume production of the four-door car in July of this year and make, perhaps, as many as 200,000 units in the second half of 2017. In regulatory filings in March, Tesla was promising 500,000 vehicles in 2018, including the Model 3, Model X and Model S sedan.
But as the deadline to start assembly grew closer this year, Mr. Musk's publicly stated goals began to diminish to the point of him warning in July that Tesla faced six months of manufacturing "hell."
He predicted making more than 1,500 Model 3s in the third quarter and reaching 5,000 a week by year's end and 10,000 a week sometime in 2018.
Last month, Tesla surprised investors with disappointing news: It badly missed the third-quarter production target, making just 260 Model 3s. The auto maker attributed the miss to an unspecified production bottleneck while saying there are "no fundamental issues" with the car's production or supply chain.
The Wall Street Journal has reported that Tesla's body shop wasn't ready when production began and that workers were hand-making portions of the Model 3 as recently as early September.
On Wednesday, Tesla said some parts of the car factory have been able to demonstrate an ability to make more than 1,000 units per week "during burst builds of short duration" while others have demonstrated burst builds of 500 units per week.
Social-media posts by Mr. Musk in recent days also suggested issues at the battery factory near Reno. He posted a picture of himself at a campfire on the factory's roof at night along with a video of himself apparently drinking whiskey, roasting a marshmallow and singing a Johnny Cash song.
He later followed with another social-media posting to say that he was camping on the roof "because it was less time than driving to a hotel room in Reno" and noted "production hell."
A little more than a year ago, the average analysts surveyed by FactSet were predicting Tesla would turn a profit during the third quarter, but those forecasts grew cloudier as time went on.
Now, Mr. Musk finds himself in a familiar situation: running low on cash amid a make-or-break effort to push out a new car.
If he is successful, money will flow in and all the hiccups will be mostly forgotten. Two years ago, Tesla was struggling to ramp up production of the Model X, another troubled period in the company's short history. The company has since fixed those problems and sales have surged.
A 36% gain in sales of Tesla's Model X sport-utility vehicle during the latest quarter helped boost revenue 30% to $2.98 billion from $2.3 billion a year earlier. The results exceeded the $2.95 billion expected by analysts.
Mr. Musk took steps in the third quarter to boost his cash pile, issuing $1.8 billion in bonds. But starting production on a new vehicle is expensive, and he ended the period with $3.5 billion in cash--$500 million more than at the end of the second quarter.
"The cash burn situation looks horrible right now but should improve in 2018 once Model 3 gets to bigger volumes," said David Whiston, an analyst for Morningstar Research Services.
Tesla said on Wednesday it plans $1 billion in capital expenditures during the fourth quarter after spending $1.1 billion in the third quarter, for a total slightly more than the $2 billion planned during the second half as detailed at the end of the second quarter.
Tesla has suggested it needs a minimum of $1 billion each quarter for working capital. The company has about $1.4 billion in debt due by the end of next year and has talked about plans for new factories in Europe and China.
"Between cash on hand, future cash flows and available lines of credit, we believe that we are well capitalized to accommodate the revised ramp of Model 3 production to 5,000 per week," Mr. Musk wrote. "Upon achieving this production level, we expect to generate significant cash flows from operating activities."
Since going public in mid-2010, Tesla has burned through $9.8 billion in cash, putting it on pace to spend through more than $10 billion by year-end.
That is a rare feat, according to an analysis this fall by Bernstein Research analyst Toni Sacconaghi. Tesla "appears to be the largest public company in history to have never generated either positive annual cash flow or positive annual profit, unlike peers who had historically proven financial models and were generating positive net income through their growth phases," he wrote in the report.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Read More
* Heard on the Street: Tesla Drives Further Off Course
* Auto Sales Continued Hot Streak in October
* Tesla Faces Labor Discord as It Ramps Up Model 3 Production
* Behind Tesla's Production Delays: Parts of Model 3 Were Being Made by Hand
* Tesla Misses Model 3 Production Goals
Credit: By Tim Higgins
Subject: Automobile industry; Losses; Vehicles
People: Musk, Elon
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: General Motors Corp; NAICS: 333415, 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Nov 1, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1958363146
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1958363146?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-01
Database: The Wall Street Journal
Tesla Drives Farther Off Course; Elon Musk's goals appear less realistic as Tesla again downshifts plans for its Model 3, reveals slowdown in older models
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Nov 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc.'s quest to live up to sky-high expectations looks tougher than ever.
The company reported third-quarter sales
of $3.0 billion and an adjusted loss of $2.92 a share on Wednesday afternoon, falling short of analyst estimates. This looks worse when one considers that profit estimates already had dropped steadily. The consensus analyst forecast for the third quarter called for a profit of 80 cents a share last June.
Tesla burned through a record amount of cash during the period--some $1.4 billion. That is disconcerting, but investors' emphasis has been on the future with this company. Developments during the quarter make CEO Elon Musk's vision look more and more like a pipe dream. For starters, Tesla said it would build 10% fewer Model S and X vehicles in the fourth quarter than the third quarter--a worrying sign on future demand for its more expensive, higher margin products.
The outlook is even worse for the Model 3, the mass-market model that Tesla has struggled to build. It now expects to produce 5,000 a week by the first quarter of next year, another slippage in its timeline. And Tesla seemed to hint that key equipment to produce even more Model 3s hasn't yet been installed, noting "it has always been our intention to implement that capacity addition after we have achieved a 5,000 per week run rate." Its ultimate target is twice as many. Given Tesla's long history of questionable forecasts
, investors should take a dim view of even these lowered expectations.
Tesla shares are up sharply in 2017, but all those gains accrued early in the year. The euphoria surrounding that rally is wearing off, and with good reason.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Earnings
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Nov 1, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1958378526
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1958378526?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-02
Database: The Wall Street Journal
Tesla Posts Loss, Boosting Pressure to Speed Output of Model 3; Gains in sales of Tesla's Model X sport-utility vehicle helped boost revenue 30%
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Nov 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Elon Musk's usual bravado as the billionaire leader of Tesla Inc. seemed to waver on Wednesday as he warned of monthslong delays in the production of the Model 3 sedan and raised the possibility the electric-car company could pump the brakes on planned growth.
The Silicon Valley auto maker had aimed to make 5,000 Model 3 sedans a week by the end of this year but said it won't reach the milestone until late in the first quarter of next year.
Tesla also reported its worst financial quarter ever, posting a loss of $619 million attributed to common shareholders in the three months that ended on Sept. 30, compared with a rare profit of $22 million a year ago. On an adjusted basis, the company's per-share loss of $2.92 was wider than the $2.28 consensus estimate of analysts surveyed by Thomson Reuters.
The company attributed the primary delay of ramping up the Model 3, which began production in July, to battery-pack assembly at its factory near Reno, Nev.
"The combined complexity of module design and its automated manufacturing process has taken this line longer to ramp than expected," Mr. Musk said in a shareholder letter detailing the company's third quarter.
Mr. Musk, who on a conference call with analysts said he was struggling with a cold, seemed at a loss of words when asked about when Tesla might reach the rate of building 10,000 Model 3s a week. After a 12-second delay, he suggested it was too early to say because Tesla is still learning to build the Model 3 and later added the company faces a strategic choice between growth and capital spending.
"We want to make sure we know what to scale before we spend money on it," Mr. Musk said.
His comments surprised some analysts. "Quite frankly, I think it's really the first time that I've heard you talk about that potential trade-off," Toni Sacconaghi, an analyst for Bernstein Research, told Mr. Musk. Mr. Sacconaghi asked whether Tesla is concerned it might run out of cash or is trying to do too much too quickly.
Tesla Chief Financial Officer Deepak Ahuja responded that Tesla had a "certain sense of fiduciary responsibility that we have in addition to just growing like crazy." Added Mr. Musk: "We're talking about a rate of growth faster than the Model T, which is the fastest in history. These are nutty growth rates."
Expectations for the Model 3, which starts at $35,000, have helped push Tesla's shares up more than 50% this year, giving it a market value that rivals General Motors Co. despite Tesla having never turned an annual profit nor built more than 84,000 vehicles in a year.
Mr. Musk's ability to defy the odds by making Tesla into a global luxury brand is being tested anew with the Model 3, a midprice sedan that he hopes will move the company more into the mainstream.
A year ago, Mr. Musk was suggesting that Tesla would begin volume production of the four-door car in July of this year and make, perhaps, as many as 200,000 units in the second half of 2017. In regulatory filings in March, Tesla was promising 500,000 vehicles in 2018, including the Model 3, Model X and Model S sedan.
But as the deadline to start assembly grew closer this year, Mr. Musk's publicly stated goals began to diminish to the point of him warning in July that Tesla faced six months of manufacturing "hell."
He predicted making more than 1,500 Model 3s in the third quarter and reaching 5,000 a week by year's end and 10,000 a week sometime in 2018.
Last month, Tesla surprised investors with disappointing news: It badly missed the third-quarter production target, making just 260 Model 3s. The auto maker attributed the miss to an unspecified production bottleneck while saying there are "no fundamental issues" with the car's production or supply chain.
The Wall Street Journal has reported that Tesla's body shop wasn't ready when production began and that workers were hand-making portions of the Model 3 as recently as early September.
On Wednesday, Tesla said some parts of the car factory have been able to demonstrate an ability to make more than 1,000 units per week "during burst builds of short duration" while others have demonstrated burst builds of 500 units per week.
Social-media posts by Mr. Musk in recent days also suggested issues at the battery factory near Reno. He posted a picture of himself at a campfire on the factory's roof at night along with a video of himself apparently drinking whiskey, roasting a marshmallow and singing a Johnny Cash song.
He later followed with another social-media posting to say that he was camping on the roof "because it was less time than driving to a hotel room in Reno" and noted "production hell."
A little more than a year ago, the average analysts surveyed by FactSet were predicting Tesla would turn a profit during the third quarter, but those forecasts grew cloudier as time went on.
Now, Mr. Musk finds himself in a familiar situation: running low on cash amid a make-or-break effort to push out a new car.
If he is successful, money will flow in and all the hiccups will be mostly forgotten. Two years ago, Tesla was struggling to ramp up production of the Model X, another troubled period in the company's short history. The company has since fixed those problems and sales have surged.
A 36% gain in sales of Tesla's Model X sport-utility vehicle during the latest quarter helped boost revenue 30% to $2.98 billion from $2.3 billion a year earlier. The results exceeded the $2.95 billion expected by analysts.
Mr. Musk took steps in the third quarter to boost his cash pile, issuing $1.8 billion in bonds. But starting production on a new vehicle is expensive, and he ended the period with $3.5 billion in cash--$500 million more than at the end of the second quarter.
"The cash burn situation looks horrible right now but should improve in 2018 once Model 3 gets to bigger volumes," said David Whiston, an analyst for Morningstar Research Services.
Tesla said on Wednesday it plans $1 billion in capital expenditures during the fourth quarter after spending $1.1 billion in the third quarter, for a total slightly more than the $2 billion planned during the second half as detailed at the end of the second quarter.
Tesla has suggested it needs a minimum of $1 billion each quarter for working capital. The company has about $1.4 billion in debt due by the end of next year and has talked about plans for new factories in Europe and China. On Wednesday, Mr. Musk suggested capital spending next year could be similar to this year, which is on track to total $3.6 billion.
"Between cash on hand, future cash flows and available lines of credit, we believe that we are well capitalized to accommodate the revised ramp of Model 3 production to 5,000 per week," Mr. Musk wrote. "Upon achieving this production level, we expect to generate significant cash flows from operating activities."
Write to Tim Higgins at Tim.Higgins@WSJ.com
Read More
* Heard on the Street: Tesla Drives Further Off Course
* Auto Sales Continued Hot Streak in October
* Tesla Faces Labor Discord as It Ramps Up Model 3 Production
* Behind Tesla's Production Delays: Parts of Model 3 Were Being Made by Hand
* Tesla Misses Model 3 Production Goals
Credit: By Tim Higgins
Subject: Lines of credit; Manufacturing; Factories; Capital expenditures; Vehicles
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Nov 2, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1958426561
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1958426561?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-02
Database: The Wall Street Journal
Tesla Reveals Time Frame for China Factory; Tesla CEO Elon Musk doesn't expect significant investment in a China factory until 2019
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Nov 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. indicated Wednesday that it plans to make cars and sport-utility vehicles in China in about three years as part of a bet to make the pricey electric vehicles more appealing to local buyers.
Chief Executive Elon Musk laid out the timeline Wednesday during a conference call with analysts, saying he doesn't expect significant investment in a China factory until 2019.
The Silicon Valley auto maker has been vague about its efforts to set up a factory in the Middle Kingdom beyond a statement that it was exploring the possibility with the city of Shanghai and aimed to announce its plans by year's end. The Wall Street Journal reported last month that the car maker had reached an agreement
to set up its own manufacturing facility in the city's free-trade zone.
Such an agreement would be a milestone for a U.S. company operating in China, giving Tesla a first-of-its kind arrangement and a way around forming a partnership with a local company.
Foreign auto makers that currently build vehicles in China do so through joint ventures with local manufacturers, allowing the foreign companies to avoid a 25% tariff on autos while also forcing them to share profits and technology. Tesla has been reluctant to forge a local partnership.
It is unclear whether Tesla's plans will allow it to avoid the tariffs. Local analysts are skeptical that China will give Tesla a break on the tax. But by building a wholly owned factory in a free-trade zone, Tesla could significantly cut its production costs--and lofty sales prices. It could also help the company build goodwill among government officials, analysts say.
It generally takes several years for auto makers to build a large manufacturing plant.
Even with tariffs that make the least-costly Model S roughly 50% more expensive in China than in the U.S., Tesla's sales in the country have surged in recent years. The auto maker's revenue in China rose to more than $1 billion last year, from $319 million in 2015, representing about 15% of total revenue and making the country Tesla's second-largest market.
Mr. Musk said a China factory, with a capacity of at least 200,000 vehicles, would build the Model 3, a $35,000 sedan aimed at a broader market than the more expensive Model S, and coming Model Y compact sport-utility vehicle.
"It's really the only way to make the cars affordable in China," he said.
On Wednesday, Tesla reported its worst financial quarter to date
and warned of delays in building the Model 3 car.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Tesla Strikes Deal With Shanghai to Build Factory in China
* Tesla Posts Loss, Boosting Pressure to Speed Output of Model 3
* Tesla Faces Labor Discord as It Ramps Up Model 3 Production
* China Sends a Jolt Through Auto Industry With Plans for Electric Future
Credit: By Tim Higgins
Subject: Automobile industry; Manufacturing; Foreign trade zones; Tariffs
Location: China United States--US
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Nov 2, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1958449699
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1958449699?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-03
Database: The Wall Street Journal
Tesla Rolls Back Goal On Sedan Amid Loss
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Nov 2017: B.1.
ProQuest document link
Abstract: None available.
Full text: Elon Musk's usual bravado as the billionaire leader of Tesla Inc. seemed to waver on Wednesday as he warned of monthslong delays in the production of the Model 3 sedan and raised the possibility the electric-car company could pump the brakes on planned growth.
The Silicon Valley auto maker had aimed to make 5,000 Model 3 sedans a week by the end of this year but said it won't reach the milestone until late in the first quarter of next year.
Tesla also reported its worst financial quarter ever, posting a loss of $619 million attributed to common shareholders in the three months that ended on Sept. 30, compared with a rare profit of $22 million a year ago. On an adjusted basis, the company's per-share loss of $2.92 was wider than the $2.28 consensus estimate of analysts surveyed by Thomson Reuters.
The company attributed the primary delay of ramping up the Model 3, which began production in July, to battery-pack assembly at its factory near Reno, Nev.
"The combined complexity of module design and its automated manufacturing process has taken this line longer to ramp than expected," Mr. Musk said in a shareholder letter detailing the company's third quarter.
Mr. Musk, who on a conference call with analysts said he was struggling with a cold, seemed at a loss of words when asked about when Tesla might reach the rate of building 10,000 Model 3s a week. After a 12-second delay, he suggested it was too early to say because Tesla is still learning to build the Model 3 and later added the company faces a strategic choice between growth and capital spending.
"We want to make sure we know what to scale before we spend money on it," Mr. Musk said.
His comments surprised some analysts. "Quite frankly, I think it's really the first time that I've heard you talk about that potential trade-off," Toni Sacconaghi, an analyst for Bernstein Research, told Mr. Musk.
Credit: By Tim Higgins
Subject: Automobile production; Electric vehicles
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2017
Publication date: Nov 2, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1958464431
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1958464431?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-01-10
Database: The Wall Street Journal
Business News: Tesla Sets Timeline For Plant In China
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Nov 2017: B.3.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. indicated that it plans to make cars and sport-utility vehicles in China in about three years as part of a bid to make the pricey electric vehicles more appealing to local buyers.
Chief Executive Elon Musk laid out the timeline Wednesday during a conference call with analysts, saying he doesn't expect significant investment in a China factory until 2019.
The Silicon Valley auto maker has been vague about its efforts to set up a factory in China beyond a statement that it was exploring the possibility with the city of Shanghai and aimed to announce its plans by year's end.
The Wall Street Journal reported last month that the car maker had reached an agreement to set up its own manufacturing facility in the city's free-trade zone.
Such an agreement would be a milestone for a U.S. company operating in China, giving Tesla a first-of-its-kind arrangement and a way around forming a partnership with a local company.
Foreign auto makers that currently build vehicles in China do so through joint ventures with local manufacturers, allowing the foreign companies to avoid a 25% tariff on autos while also forcing them to share profits and technology. Tesla has been reluctant to forge a local partnership.
It is unclear whether Tesla's plans will allow it to avoid the tariffs. Local analysts are skeptical that China will give Tesla a break on the tax. But by building a wholly owned factory in a free-trade zone, Tesla could significantly cut its production costs -- and lofty sales prices. It could also help the company build goodwill among government officials, analysts say.
It generally takes several years for auto makers to build a large manufacturing plant.
Even with tariffs that make the least-costly Model S roughly 50% more expensive in China than in the U.S., Tesla's sales in the country have surged in recent years. The auto maker's revenue in China rose to more than $1 billion last year, from $319 million in 2015, representing about 15% of total revenue and making the country the company's second-largest market.
Mr. Musk said that a China factory, with a capacity of at least 200,000 vehicles, would build the Model 3, a $35,000 sedan aimed at a broader market than the more expensive Model S and coming Model Y compact sport-utility vehicle.
"It's really the only way to make the cars affordable in China," he said.
On Wednesday, Tesla reported its worst financial quarter to date and warned of delays in building the company's Model 3 car.
Credit: By Tim Higgins
Subject: Foreign trade zones; Automobile production; Electric vehicles
Location: United States--US China
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Nov 3, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1959061603
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1959061603?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-01-10
Database: The Wall Street Journal
Watch the Cash at Tesla; Issuing stock now can protect Tesla from risks of Model 3 production delays
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Nov 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla has huge growth plans and a heavy balance sheet. Those conflicting realities mean the company, and investors, should be closely watching its capital needs.
The electric car giant is scrambling to get its Model 3 mass-market sedan into full production and speed up deliveries to its long list of reservation holders, who were informed of delays
earlier this week.
Reducing that backlog is necessary to get the stock moving in the right direction once again: Tesla shares are down 21% in the past six weeks, though still up 43% this year. Tesla expects
improved profitability and positive cash flow once it hits its weekly Model 3 production targets in the first quarter of next year. Further delays would put a focus on its balance sheet.
Tesla ended the third quarter with $3.5 billion in cash. But that money is bound to go quickly. Tesla burned $1.4 billion in cash in the third quarter, meaning nearly all the proceeds of August's $1.8 billion bond issue have already been spent. Tesla expects $1 billion in capital spending for the fourth quarter and given the continued production problems, operating cash flow is likely to be negative, so the cash burn could look similar to the third quarter. Chief Executive Elon Musk said on Wednesday's earnings conference call that next year's capital needs will be similar to this year's total of $3.6 billion.
Issuing more bonds doesn't seem practical. The company now has more than $9.5 billion in long term bonds. Investors who bought the bonds sold in August are already sitting on losses--the debt trades at less than 95 cents on the dollar just three months after it was issued. Those are large losses for bond investors, especially in a strong credit market.
Stock would be easier to sell. Investors who bought shares in the last stock sale in March still have healthy gains. Even now, there doesn't appear to be a shortage of investors who want to own a piece of the electric car maker. Tesla announced in March that Chinese internet company Tencent had bought nearly $2 billion of stock on the open market.
The more cash Tesla can raise now, the more breathing room it can buy itself to sort out the production issues. The longer it takes to solve the problems, the lower the share price will be and the more skeptical investors will grow. There's always some comfort in having cash in the bank. Tesla should top up its account.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Automobile industry; Investments; Cash flow; Balance sheets; Capital expenditures
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Nov 3, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1959293381
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1959293381?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-04
Database: The Wall Street Journal
Electric-Vehicle Tax-Credit Proposal Slows Tesla, Detroit; Eliminating the $7,500 federal incentive would likely crimp sales of battery-powered cars
Author: Roberts, Adrienne
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Nov 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: The clock appears to be ticking on the $7,500 tax credit given to electric-vehicle buyers
, casting a cloud over plans by domestic auto makers to invest billions into electric-vehicle development.
The move, signaled Thursday as part of a broader House Republican tax plan
, will likely crimp sales of battery-powered cars while such vehicles cost far more than conventional cars to produce. Shares of the two biggest U.S. auto makers in terms of sales--General Motors Co. and Ford Motor Co.--slipped modestly even as the broader market posted gains.
Shares of Tesla Inc. rallied late Friday after trading down earlier. Tesla, which sells only electric vehicles, closed at $306.09 on the Nasdaq, far below the $319.18 price that the car maker started the week at. Fiat Chrysler Automobiles NV--an auto maker far less bullish on electrics, also finished in positive territory.
Neither GM nor Ford rely heavily on electric cars for overall sales, but both have signaled plans to substantially increase battery-powered offerings in coming years. In a note Friday, Evercore said the change in legislation could hit GM hard because it would be reliant on the credits to offer its new Chevrolet Bolt for quite some time at cut-rate lease prices.
"Will GM have to offer a further $7,500 to keep volumes at today's levels?" the firm wrote. GM sold 17,083 Chevrolet Bolt electric cars through October.
Nissan Motor Co., another auto maker that has been offering electric vehicles, sold 10,953 Leaf electric cars this year through October. It is in the midst of launching an updated version of the car that can achieve increased range on a single charge.
"We believe price (as well as unappealing product, though the two are interlinked) is the main inhibitor for electric vehicle sales over the next three to five years," Evercore said.
In a statement issued Thursday, GM said "tax credits are an important customer benefit that can help accelerate the acceptance of electric vehicles," and it intends to work with congressional leaders to maintain the incentive.
Electric vehicles are already a tough sell to U.S. consumers because gas prices are low, and the tax credit was seen as a way to lure customers to buy electric or plug-in hybrid vehicles that are more expensive than their gasoline-powered counterparts. Electric cars aren't seen being cost-competitive with conventional cars until the middle of the next decade, according to analysts.
Tesla, selling three electric models, could also be hit. The Silicon Valley company was already under severe pressure following the report of its worst quarterly financial losses
earlier this week.
Tesla has also faced heat because of hiccups related to production of its new Model 3 sedan, an affordable electric vehicle aimed at the broader mass market. Tesla made just 250 Model 3 cars during the third quarter
, missing its projection of more than 1,500.
Evercore said that while the absence of the $7,500 tax credit isn't a "make or break for the majority of Tesla's potential customers...the absence of the credit is likely to lead to some people altering their purchase decision."
Tesla had been vying for the No. 1 spot among U.S. auto makers in terms of market valuation during the summer months, but has since fallen far behind GM, which is valued at $61.5 billion. Tesla, currently valued at $49.9 billion, is now virtually even with Ford.
A Tesla spokesman declined to comment.
Write to Adrienne Roberts at Adrienne.Roberts@wsj.com
Credit: By Adrienne Roberts
Subject: Automobile industry; Tax credits; Electric vehicles
Location: United States--US Detroit Michigan
Company / organization: Name: Nissan Motor Co Ltd; NAICS: 336111; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Fiat Chrysler Automobiles NV; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Nov 3, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1959305134
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1959305134?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-03
Database: The Wall Street Journal
One Laker's Antidote for L.A. Traffic: His Tesla; When he's not driving to the hoop, NBA veteran Corey Brewer navigates the Los Angeles freeways in his new electric SUV
Author: Baime, A J
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Nov 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Corey Brewer, 31, a 6-foot-9 forward with the Los Angeles Lakers in his 11th NBA season, on his 2017 Tesla Model X 100D, as told to A.J. Baime.
I live in the Valley, and my team practices in El Segundo. I have played for a lot of basketball teams and lived in a lot of cities, and I will tell you, there is no traffic like the traffic in L.A. It can take 45 minutes to go 4 miles on I-405. I decided to buy a Tesla because it is an electric car, so I could go in the HOV lane when I am by myself, and because it has an autopilot function, so the car is supposed to basically drive itself.
The process of buying the car was unlike anything I have experienced. You go online and pick out what you want--the color, the color of the rims, how many seats you want. [The car can come with five, six or seven.] A few weeks later, the car is ready. I spent about $115,000, and I got the car home in September. The rear doors are falcon wing doors. I put my son Sebastian's car seat in the back and he freaked out when he saw these doors open. He thought the car was the Batmobile.
There is no gas tank. Each night, I plug the car into a wall outlet. At the practice facility, there is a charging station that works much faster. [Tesla claims a range of 295 miles when fully charged.]
The first time I turned on the autopilot, I was thinking, is this really going to work? It does! The car has cameras and radar so it will stay in its lane automatically. If the car in front slows down or stops, my car does the same. You have to pay attention, but you can enjoy the ride. Also, the Model X is really comfortable for tall people.
My first car was a 1994 Eagle Talon. I was 16 years old, working at a Hardee's fast-food place in Tennessee making, I think, $5.15 an hour. I saved up and bought the car for $1,000. Every now and then, I pass a Carl's Jr. in my Tesla. (In California, Hardee's is called Carl's Jr.) I'll cruise by--the car doing most of the driving by itself--and I think, man, I have come a long way
.
Contact A.J. Baime at Facebook.com/ajbaime
.
Credit: By A.J. Baime
Subject: Professional basketball; Fast food industry
Location: Tennessee California Los Angeles California
People: Brewer, Corey Baime, A J
Company / organization: Name: National Basketball Association; NAICS: 813990; Name: Los Angeles Lakers; NAICS: 711211; Name: Hardees Food Systems Inc; NAICS: 722513
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Nov 7, 2017
Section: Life
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1961029826
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1961029826?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-08
Database: The Wall Street Journal
Life & Arts -- My Ride: One Laker's Antidote for L.A. Traffic: His Tesla
Author: Baime, A J
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 Nov 2017: A.12.
ProQuest document link
Abstract: None available.
Full text: Corey Brewer, 31, a 6-foot-9 forward with the Los Angeles Lakers in his 11th NBA season, on his 2017 Tesla Model X 100D, as told to A.J. Baime.
I live in the Valley, and my team practices in El Segundo. I have played for a lot of basketball teams and lived in a lot of cities, and I will tell you, there is no traffic like the traffic in L.A. It can take 45 minutes to go 4 miles on I-405. I decided to buy a Tesla because it is an electric car, so I could go in the HOV lane when I am by myself, and because it has an autopilot function, so the car is supposed to basically drive itself.
The process of buying the car was unlike anything I have experienced. You go online and pick out what you want -- the color, the color of the rims, how many seats you want. [The car can come with five, six or seven.] A few weeks later, the car is ready. I spent about $115,000, and I got the car home in September. The rear doors are falcon wing doors. I put my son Sebastian's car seat in the back and he freaked out when he saw these doors open. He thought the car was the Batmobile.
There is no gas tank. Each night, I plug the car into a wall outlet. At the practice facility, there is a charging station that works much faster. [Tesla claims a range of 295 miles when fully charged.]
The first time I turned on the autopilot, I was thinking, is this really going to work? It does! The car has cameras and radar so it will stay in its lane automatically. If the car in front slows down or stops, my car does the same. You have to pay attention, but you can enjoy the ride.
Also, the Model X is really comfortable for tall people.
My first car was a 1994 Eagle Talon. I was 16 years old, working at a Hardee's fast-food place in Tennessee making, I think, $5.15 an hour. I saved up and bought the car for $1,000. Every now and then, I pass a Carl's Jr. in my Tesla. (In California, Hardee's is called Carl's Jr.)
I'll cruise by -- the car doing most of the driving by itself -- and I think, man, I have come a long way.
---
Contact A.J. Baime at Facebook.com/ajbaime.
Credit: By A.J. Baime
Subject: Professional basketball
Location: Tennessee California
People: Baime, A J
Company / organization: Name: Los Angeles Lakers; NAICS: 711211; Name: Hardees Food Systems Inc; NAICS: 722513
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.12
Publication year: 2017
Publication date: Nov 8, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Documenttype: News
ProQuest document ID: 1961299214
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1961299214?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-08
Database: The Wall Street Journal
Tesla, SpaceX Director Steve Jurvetson on Leave Amid Misconduct Probe; Co-founder of venture firm DFJ is out after an internal investigation over the summer
Author: Zakrzewski, Cat
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Nov 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Prominent investor Steve Jurvetson has left DFJ, the venture-capital firm he co-founded, and has gone on leave from the boards of Tesla Motors and SpaceX following an investigation by DFJ into alleged misconduct.
DFJ said his departure is by "mutual agreement." In October DFJ said it had opened an investigation into Mr. Jurvetson over the summer after hearing indirect and secondhand allegations about Mr. Jurvetson's conduct. The Menlo Park, Calif.-based firm didn't specify the nature of the allegations.
"DFJ's culture has been, and will continue to be, built on the values of respect and integrity in all of our interactions," DFJ spokeswoman Carol Wentworth said via email on Monday.
In a statement, Mr. Jurvetson said, "I am leaving DFJ to focus on personal matters, including taking legal action against those whose false statements have defamed me."
Mr. Jurvetson's leave from the boards of Tesla and SpaceX, the Elon Musk-led companies, is in place "pending resolution of these allegations," said John Taylor, a SpaceX spokesman, via email.
In addition to those boards, Mr. Jurvetson has most recently held board roles with Planet, D-Wave, Memphis Meats, Mythic, and Synthetic Genomics, according to the DFJ website.
He also was an early investor in Hotmail. Last year, Mr. Jurvetson was named a presidential ambassador for global entrepreneurship by President Barack Obama.
Write to Cat Zakrzewski at cat.zakrzewski@wsj.com
Credit: By Cat Zakrzewski
People: Musk, Elon Obama, Barack
Company / organization: Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Nov 13, 2017
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1963226082
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1963226082?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-13
Database: The Wall Street Journal
Tesla Reveals Semi Truck With 500-Mile Range, New Roadster Car; The new $200,000 Roadster sports car will have a range of 620 miles on a single charge
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Nov 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: HAWTHORNE, Calif.--Tesla Inc. Chief Executive Elon Musk on Thursday revealed the company's first all-electric semitrailer truck and a $200,000 super car, his latest attempt to stir excitement for his vision to upend transportation as the company struggles to mass-produce an affordable sedan.
The Semi, due out in 2019, is designed to go 500 miles on a single charge, Mr. Musk said. It is also equipped with Tesla's semiautonomous driving system that will assist drivers and allow the trucks to travel autonomously in convoys with the company's other big-rigs.
In a surprise, Mr. Musk also unveiled Tesla's newest Roadster, a sports car he said would have a range of 620 miles on a single charge and be available in 2020. The car, Mr. Musk said, will be the quickest production car ever made, going from zero to 60 miles an hour in 1.9 seconds, and topping speeds of 250 miles an hour.
"These numbers sound nutty," Mr. Musk told a cheering crowd of about a thousand people, minutes after the Roadster drove out of one of the semi trucks' trailers and sped around outside the company's design studio.
The Tesla Semi is part of Mr. Musk's vision to offer safer and cheaper vehicles to move cargo around. Without giving the sticker price of the commercial truck, Mr. Musk said the semi would be cheaper to operate than a diesel competitor and possibly--using the autonomous technology--less expensive than rail.
The event, live-streamed on Tesla's website, occurred as the auto maker struggles to ramp up production of the Model 3
, a sedan starting at $35,000 that represents Mr. Musk's bet that he can make all-electric vehicles mainstream.
Mr. Musk, who at one point suggested Tesla would build as many as 200,000 Model 3s this year, made just 260 during the third quarter and has pushed back his goal of making them at a rate of 5,000 a week until late in the first quarter from the current three-month period. He has spent recent days at the company's battery factory in Nevada as Tesla irons out technical issues there.
Investors, however, have mostly shrugged off the production hiccups. His vision for transportation--including promises of eventually offering fully self-driving vehicles--has excited shareholders who have pushed the small company's market value this year to rival that of both Ford Motor Co. and General Motors Co.
"The specs on the new semi truck and sports car would put both vehicles at the top of their segments--assuming they can be produced and sold as part of a sustainable business plan," Karl Brauer, executive publisher of Kelley Blue Book and Autotrader, said in an email. "So far that final element has eluded Tesla Motors, which makes it difficult to see these vehicles as more than 'what if' concept cars."
Tesla has already begun taking $5,000 deposits for the Semi and will begin taking $50,000 reservations for the $200,000 base version of the Roadster, according to the company.
A founder's version of the sports car, limited to 1,000, will be sold for $250,000 upfront. The Roadster was Tesla's first production car, coming out in 2008.
The new truck exceeded analysts' expectations for range. Analysts, such as Toni Sacconaghi of Bernstein and Joseph Spak of RBC Capital Markets, have published notes to investors saying they expected the vehicle to have a range of 300-450 miles on a charge.
The challenge for a commercial vehicle is to balance the need for distance and the cost of the batteries.
"We see the Tesla Semi's range as a significant constraint, given that long-haul trucks drive up to 500 to 600 miles per day," Mr. Sacconaghi wrote ahead of the event.
Tesla says the Semi improves on the performance of a heavy-duty truck, aiming to be cheaper to operate while providing better driver experiences, safety and reliability.
The interior of the Tesla truck has more in common with a Model 3 than a Freightliner.
A "day cab" version of the Semi shown to reporters ahead of the event did away with the two-seat cockpit found in most trucks and traditional dashboard gauges.
All of that was replaced with a driver's seat centered in the middle of the vehicle between two 15-inch display touch screens. The vehicle comes with the ability to directly integrate with a trucking company's fleet management system for routing and scheduling.
A jump seat is found to the right rear of the driver. There's enough room to the left of the driver's seat for a duffel bag.
To reduce costs, Mr. Musk has said the truck aims to share parts with the Model 3, which is evident with the exterior door handle that is flush with the door and pops out when pressed, as it is on the car.
The driver's side door opens to reveal stairs that lead to a roomy entryway inside the vehicle that gives the driver enough space to stand upright and to change clothing. Two bins fold into the rear wall for storage.
The vehicle is propelled by four motors--the same as used in the Model 3--located in the rear of the vehicle. Without an engine, transmission and other traditional powertrain to maintain, Tesla says its vehicles should require less maintenance.
Tesla plans to create a new network of so-called megachargers world-wide where Tesla Semi trucks can quickly recharge in 30 minutes for 400 miles of range.
The batteries, located beneath the cab, are reinforced to protect against impact and the location gives the vehicle a low center of gravity.
The front of the cab looks like a bullet train as engineers work to reduce air resistance by 50% compared with typical trucks, according to the company. Tesla also says the windshield is made of impact resistant glass.
The vehicle comes outfitted with Tesla's so-called Enhanced Autopilot, which includes semiautonomous driving features such as automatic emergency braking and automatic lane keeping ability.
While Mr. Musk didn't explain how his convoy system would work, other companies are rushing to create so-called platooning technology that would allow a lead truck to navigate highways while trucks follow closely behind, potentially saving money on manpower but also improving efficiency. Some autonomous vehicle developers think the hurdles for self-driving trucks are less complex than for using the technology in busy cities.
Tesla calculates that operating a diesel truck will be at least 20% more expensive than operating a Tesla truck when taking into account all costs, including lease payments, insurance and maintenance.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Elon Musk Plugs New Truck Even as Model 3 Faces Delays
* Tesla Posts Loss, Boosting Pressure to Speed Output of Model 3
* Tesla Faces Labor Discord as It Ramps Up Model 3 Production
Credit: By Tim Higgins
Subject: Automobile industry
Location: Nevada
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Nov 17, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1964946345
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1964946345?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-17
Database: The Wall Street Journal
Business News: Tesla Introduces Its All-Electric Semitrailer Truck
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 Nov 2017: B.3.
ProQuest document link
Abstract: None available.
Full text: HAWTHORNE, Calif. -- Tesla Inc. Chief Executive Elon Musk on Thursday revealed a sleek, all-electric semitrailer truck that he promises will go a surprising 500 miles on a single charge and be able to travel autonomously in convoys.
Mr. Musk also surprised the audience of about a thousand people here with Tesla's newest Roadster, a $200,000 car he promised would have a range of 620 miles on a charge and be available in 2020. The car, Mr. Musk said, will be the fastest production car ever, topping 250 miles per hour.
The Tesla Semi is due out in 2019. Without giving a sticker price, Mr. Musk said the semi would be cheaper to operate than a diesel rival.
Credit: By Tim Higgins
Subject: Automobile industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Nov 17, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1965015020
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1965015020?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-17
Database: The Wall Street Journal
Tesla Changes the Subject; Elon Musk needs more focus as he grapples with Model 3 production issues
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Nov 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla CEO Elon Musk was in his element Thursday night, announcing to grand applause that the company will build a truck that will change transportation and the world's fastest production car. Whether Tesla can actually produce and make money on its mass-market Model 3 is a less exciting but far more important topic.
In unveiling a semitrailer truck and new version of Tesla's Roadster
sports car to a crowd of delighted fans, Mr. Musk sold a bright future. Each new product, at first blush, offers highly compelling features. The electric truck, Tesla says, will offer 500 miles of range. The company says it will be significantly cheaper to operate than a traditional diesel truck. And the new sports car, which will cost $200,000 for a base model, will offer 620 miles.
But, some aspects of the plan were thoroughly unconvincing. Mr. Musk said the truck would be available in 2019 and the sports car by 2020, which seems impossible given the company's significant production issues
. "We guarantee the truck won't break down for a million miles" of driving, he declared at one point.
And some key details about the feasibility of the truck project were missing altogether. Mr. Musk didn't say how much the truck will weigh, for instance, or what its price would be.
Investors have never been too concerned about the practicality of Mr. Musk's vision--the stock has gone up nearly sixteen fold since the 2010 IPO. But that nonchalance might not last much longer.
That is because Tesla continues to take on more challenges while it is seriously under the gun to fix problems with the Model 3. Tesla built just 260 of them in the third quarter. That is after suggesting as recently as 2016 it could build as many as 200,000 in the second half of this year. There are hundreds of thousands of Model 3 reservation holders who won't have infinite patience.
Tesla's cash-burn issues are growing more severe, meanwhile. It burned $1.4 billion in free cash in the third quarter. Producing the Model 3, plus getting started on these new projects, will require billions more.
Fresh deposits for its new products will help, but not for long. Tesla will sell up to 1,000 ultra high-end versions of the Roadster for $250,000 apiece, with payment required up front. That could raise $250 million quickly, but that capital would last for just two weeks at the current burn rate.
Meanwhile, Wall Street's reaction was less enthusiastic than the crowd's. Shares were up 1% at midday Friday and are still 18% below their peak.
If the Tesla can't get the Model 3 right soon, we can expect another glitzy announcement. Tesla minivan anyone?
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Product development
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Nov 17, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1965413460
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1965413460?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-18
Database: The Wall Street Journal
Tesla's Electric Semi Truck Gets Orders From Wal-Mart and J.B. Hunt; Ryder is in the process of an order for the truck due out in 2019
Author: Smith, Jennifer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Nov 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Some of the country's biggest trucking fleets are among Tesla Inc.'s first customers for its all-electric big rig.
J.B. Hunt Transport Services Inc. and Wal-Mart Stores Inc., which operate thousands of trucks, said Friday they had reserved Tesla's truck, which Chief Executive Elon Musk revealed at an event
in Hawthorne, Calif., on Thursday. The first highway-ready vehicles aren't due out until 2019, but the company is taking $5,000 deposits.
Truck leasing and fleet management company Ryder System Inc. "is in the process of placing its initial order for a fleet of Tesla semi-trucks," Dennis Cooke, the company's president of global fleet management solutions, said in an email. Ryder declined to specify the size of the order.
The Semi is designed to run up to 500 miles on a single charge, and incorporates Tesla's semiautonomous driving system, which the company said could allow big rigs to travel in autonomous convoys with other of its trucks. The company did not provide a sticker price, but said the truck would be cheaper to operate than diesel rivals and could potentially cost less than transport by rail.
Wal-Mart has preordered five units for the U.S. and 10 for its Canadian division, and sees potential for the trucks to help meet company targets for lower emissions, a spokesman said Friday. The order was reported earlier by CNBC.
The company has one of the largest private fleets in the U.S., with some 6,000 trucks. Wal-Mart has tested other new vehicle technology, including diesel-electric hybrid trucks and some that run on liquefied natural gas or other alternative fuels.
J.B. Hunt, a leading U.S. carrier, said Friday it "placed a reservation to purchase multiple Tesla Semi tractors," but declined to specify how many units it ordered. The vehicles will support West Coast operations of J.B. Hunt's intermodal unit, where freight is moved long distance by road and rail, and its dedicated contract division, which provides trucking services for companies that have outsourced their private fleet operations.
The electric vehicles will be most useful on local routes, J.B. Hunt Chief Executive John Roberts said in a statement.
The Semi's 500-mile range on a single charge exceeds what some analysts had expected but could still limit its use on long-haul routes, at least until a nationwide network of charging stations is built. The battery's weight could also be an issue, as heavier trucks can carry less freight. "As presented it is hard to argue that the Tesla semi ... can do anything a diesel truck can do," Bernstein analysts said in a research note.
Tesla says it is planning to build a global network of "megachargers" where truckers could recharge vehicles in about 30 minutes, gaining another 400 miles of range.
Other companies are working on electric trucks
, including medium-duty and delivery vehicles. Engine maker Cummins Inc., which unveiled an electric powertrain with a 100-mile range earlier this year, has said "there's just no case today" for electric long-haul trucks, citing the battery weight. The company's shares were down 4% Friday.
Daimler AG, which makes U.S. market leader Freightliner big rigs, showed off an electric prototype in October. U.S. Xpress, a large fleet, said earlier this year it had ordered hydrogen-electric semi-trucks from Nikola Motor Co., to be delivered in 2020.
In the meantime, fleets that move cargo thousands of miles across the country may be less eager to test the Semis out.
"The limited 500-mile range of the Tesla truck hinders our ability to be an early adopter," Greg Hirsch, a senior vice president at trucking company Daseke Inc., said in an email. The company specializes in hauling oversize industrial equipment and materials, often over long distances. "There will need to be an over-the-road infrastructure put into place prior to us being able take advantage of this technology."
Sarah Nassauer contributed to this article.
Write to Jennifer Smith at jennifer.smith@wsj.com
RELATED
* Electric Trucking Charges Up
* Elon Musk Plugs New Truck Even as Model 3 Faces Delays
Credit: By Jennifer Smith
Subject: Industrial equipment; Trucking industry; Trucks; Vehicles
Location: United States--US
People: Musk, Elon
Company / organization: Name: Ryder System Inc; NAICS: 484121, 532120; Name: Wal-Mart Stores Inc; NAICS: 452112, 452910; Name: J B Hunt Transport Inc; NAICS: 484121
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Nov 17, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1965437487
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1965437487?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-17
Database: The Wall Street Journal
Tesla Plays the Long Game With Semi Truck; Commercial truck makers say weight and cost of long-haul electric vehicles makes them impractical
Author: Tita, Bob; Higgins, Tim; Smith, Jennifer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Nov 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. Chief Executive Elon Musk is taking on the commercial truck market with an approach that defies conventional expectations: an all-electric vehicle capable of traveling for hundreds of miles on a single charge.
Commercial truck makers trying electrification initiatives have largely focused on smaller trucks for short-run duties, arguing the battery range, weight and cost of long-haul electric trucks makes them impractical. With the Semi, unveiled this week and due out in 2019, Mr. Musk is promising a vehicle that can travel 500 miles on a single charge--enough to cover most regional freight deliveries--and is cheaper to operate than diesel trucks.
Some potential customers said they are willing to give Tesla a try. Retailer Wal-Mart Stores Inc. said Friday it has preordered 15 Tesla trucks to test. J.B. Hunt Transport Services Inc. also placed a reservation for "multiple" Semis, but only to deploy in short-run service such as to and from West Coast ports and truck-to-train transfer yards.
Fleets that move cargo thousands of miles across the country may be less eager. The Semi is aerodynamic, but the likely weight of the battery and its 500-mile range may hurt its ability to compete against heavy-duty diesel trucks can run for 800 to 1,000 miles between refills.
"The limited 500-mile range of the Tesla truck hinders our ability to be an early adopter," Greg Hirsch, a senior vice president at trucking company Daseke Inc., said in an email. The company specializes in hauling oversize industrial equipment and materials, often over long distances. "There will need to be an over-the-road infrastructure put into place prior to us being able take advantage of this technology."
While Tesla has weathered its share of production hiccups, the company maintains appeal by offering high-end performance cars in a sexy package. Mr. Musk further appealed to enthusiasts this week by unveiling the Semi alongside a small $200,000 roadster that he says will be the quickest production car ever to hit roads.
Morgan Stanley auto analyst Ravi Shanker said the Semi "topped most of our expectations in terms of performance, cost savings, capability and time to market." Cowen analyst Jeffrey Osborne said "our mind wasn't blown."
Trucking companies are focused on ownership costs, reliability and the availability of service. Without costs for diesel fuel and maintenance expenses for an internal combustion engine, Mr. Musk said the Semi will cost $1.26 a mile to operate, compared with $1.51 for a diesel truck.
Incumbent truck and engine makers in the U.S. remain wary of the economics behind heavy-duty electric trucks. With the price of diesel averaging $2.50 a gallon and new model trucks providing significantly better fuel economy than a decade ago, most predict that widespread adoption of large electric trucks is at least a decade away and will be driven by regulatory restrictions for truck engine emissions.
"We don't think they're viable in long-haul, heavy-duty trucks," Tom Linebarger, chief executive of engine maker Cummins Inc. told investors Thursday. "Given the range and given the weight sacrifice with lithium ion, it just doesn't look like battery electric vehicles are the right solution for long-haul trucks."
Cummins plans to spend about $500 million over the next three years developing electric powertrains for buses, fork lifts, city delivery trucks and other vehicles that typically travel shorter distances and would require smaller batteries.
Cummins also is among several companies working on e-trucks. Daimler AG, which makes U.S. market leader Freightliner big rigs, showed off an electric prototype in October. U.S. Xpress, a large fleet, said earlier this year it had ordered hydrogen-electric semi-trucks from Nikola Motor Co., to be delivered in 2020.
Tesla was vague about how it achieves the cost difference. Tesla would charge truckers 7 cents per kilowatt-hour for electricity drawn from its solar-powered charging stations. That is about half the average kilowatt cost in the U.S.
Part of Mr. Musk's calculation for making his trucks at least 20% cheaper to operate than a diesel truck is through the creation of a fast-charging network dubbed Megachargers that he says will be built world-wide, allowing the commercial vehicles to regain 400 miles worth of charge in 30 minutes. They could be installed at origin and destination points allowing for recharging during loading and unloading.
Mr. Musk didn't release a price for the Semi and there are other issues to address. Lithium ion batteries are heavy and bulky, for instance, and extending the range of the battery likely adds weight, which subtracts from the amount of cargo that can be carried.
Venkat Viswanathan, an assistant professor of mechanical engineering at Carnegie Mellon University in Pittsburgh, estimates that a 500-mile battery for the Tesla truck would weigh 26,000 pounds.
"That is certainly much heavier than the diesel engine that is there now," he said. "The battery weighs so much that you'd eat into the cargo weight."
The Semi's battery would likely account for about a third of the 80,000-pound weight limit in most states for a fully loaded semitrailer truck. Heavy-duty truck loads typically range from 34,000 to 44,000 pounds.
Mr. Viswanathan predicts the cost of the batteries alone for the Tesla truck would be about $170,000 and figures the rest of the truck would run about $100,000. Heavy-duty diesel trucks average about $150,000 each. Tesla is counting on the lower ongoing cost of operating its truck to offset the initial high cost.
Mr. Musk is promising superior performance, saying a fully loaded Semi would travel from zero to 60 mph in 20 seconds and feature autonomous driving systems to improve safety.
Four separate motors driving the rear wheels of the truck are intended to eliminate jackknife accidents where trucks and their trailers swerve out of alignment during a panic stop or on icy roads.
Still, electric vehicles are still seen as niche and their inability to stick in the marketplace raises big questions for owners concerned about resale values. The market for natural-gas powered commercial trucks looked promising a few years ago, for instance, but shrank when the initial buyers of the trucks, which carried a higher price, had difficulty selling them when diesel fuel prices retreated. Peter Nativo, a vice president for Florida-based Oakley Transport Inc., said his company tries to recover at least 20% of the original cost of its trucks from the used market.
"At the end of its life if an electric truck doesn't have market value, that could be a problem," he said. "I don't think we'd be the guinea pigs. We'll watch the way the rest of the industry goes first on electric trucks."
Write to Bob Tita at robert.tita@wsj.com , Tim Higgins at Tim.Higgins@WSJ.com
and Jennifer Smith at jennifer.smith@wsj.com
Credit: By Bob Tita, Tim Higgins and Jennifer Smith
Subject: Diesel fuels; Trucking industry; Electric vehicles; Trucks
Location: United States--US
Company / organization: Name: Daseke Inc; NAICS: 484230; Name: Wal-Mart Stores Inc; NAICS: 452112, 452910; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: J B Hunt Transport Inc; NAICS: 484121
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Nov 18, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1965468391
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1965468391 ?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-18
Database: The Wall Street Journal
Business News: Tesla Plays the Long Game With Semi --- Company touts range and cost to operate, but questions remain; 'mind wasn't blown'
Author: Tita, Bob; Higgins, Tim; Smith, Jennifer
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 Nov 2017: B.3.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. Chief Executive Elon Musk is taking on the commercial truck market with an approach that defies conventional expectations: an all-electric vehicle capable of traveling for hundreds of miles on a single charge.
Commercial truck makers trying electrification initiatives have largely focused on smaller trucks for short-run duties, arguing the battery range, weight and cost of long-haul electric trucks makes them impractical. With the Semi, unveiled this week and due out in 2019, Mr. Musk is promising a vehicle that can travel 500 miles on a single charge -- enough to cover most regional freight deliveries -- and is cheaper to operate than diesel trucks.
Some potential customers said they are willing to give Tesla a try. Retailer Wal-Mart Stores Inc. said Friday it has preordered 15 Tesla trucks to test. J.B. Hunt Transport Services Inc. also placed a reservation for "multiple" Semis, but only to deploy in short-run service such as to and from West Coast ports and truck-to-train transfer yards.
Fleets that move cargo thousands of miles may be less eager. The Semi is aerodynamic, but the likely weight of the battery and its 500-mile range may hurt its ability to compete against heavy-duty diesel trucks can run for 800 to 1,000 miles between refills.
"The limited 500-mile range of the Tesla truck hinders our ability to be an early adopter," Greg Hirsch, a senior vice president at trucking company Daseke Inc., said in an email. The company specializes in hauling oversize industrial equipment and materials, often over long distances.
Morgan Stanley auto analyst Ravi Shanker said the Semi "topped most of our expectations in terms of performance, cost savings, capability and time to market." Cowen analyst Jeffrey Osborne said "our mind wasn't blown."
Trucking companies are focused on ownership costs, reliability and the availability of service. Without costs for diesel fuel and maintenance expenses for an internal combustion engine, Mr. Musk said the Semi will cost $1.26 a mile to operate, compared with $1.51 for a diesel truck.
Incumbent truck and engine makers in the U.S. remain wary of the economics behind heavy-duty electric trucks. With the price of diesel averaging $2.50 a gallon and new model trucks providing significantly better fuel economy than a decade ago, most predict that widespread adoption of large electric trucks is at least a decade away and will be driven by regulatory restrictions for truck engine emissions.
"We don't think they're viable in long-haul, heavy-duty trucks," Tom Linebarger, chief executive of engine maker Cummins Inc. told investors Thursday. "Given the range and given the weight sacrifice with lithium ion, it just doesn't look like battery electric vehicles are the right solution for long-haul trucks."
Cummins plans to spend about $500 million over the next three years developing electric powertrains for buses, fork lifts, city delivery trucks and other vehicles that typically travel shorter distances and would require smaller batteries.
Tesla was vague about how it achieves the cost difference. Tesla would charge truckers 7 cents per kilowatt-hour for electricity drawn from its solar-powered charging stations. That is about half the average kilowatt cost in the U.S.
Part of Mr. Musk's calculation for making his trucks at least 20% cheaper to operate than a diesel truck is through the creation of a fast-charging network dubbed Megachargers that he says will be built world-wide, allowing the commercial vehicles to regain 400 miles worth of charge in 30 minutes. They could be installed at origin and destination points allowing for recharging during loading and unloading.
Mr. Musk didn't release a price for the Semi and there are other issues to address. Lithium ion batteries are heavy and bulky, for instance, and extending the range of the battery likely adds weight, which subtracts from the amount of cargo that can be carried.
Credit: By Bob Tita, Tim Higgins and Jennifer Smith
Subject: Diesel fuels; Trucking industry; Cost control; Electric vehicles; Industrial trucks
Location: United States--US
People: Musk, Elon
Company / organization: Name: Wal-Mart Stores Inc; NAICS: 452112, 452910; Name: J B Hunt Transport Inc; NAICS: 484121; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2017
Publication date: Nov 18, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1965544330
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1965544330?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-02-20
Database: The Wall Street Journal
Tesla Delivers the World's Biggest Battery--and Wins a Bet; CEO Elon Musk had set a 100-days-or-it's-free deadline for completing the Australian project
Author: Taylor, Rob
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Nov 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: JAMESTOWN, Australia--Tesla Inc. Chief Executive Elon Musk may have overpromised
on production of the company's latest electric car, but he is delivering on his audacious Australian battery bet.
An enormous Tesla-built battery system
--storing electricity from a new wind farm and capable of supplying 30,000 homes for more than an hour--will be powered up over the coming days, the government of South Australia state said Thursday. Final tests are set to be followed by a street party that Mr. Musk, founder of both Tesla and rocket maker Space Exploration Technologies Corp., or SpaceX, was expected to attend.
Success would fulfill the risky pledge Mr. Musk made in March, to deliver a working system in "100 days from contract signature or it is free."
He was answering a Twitter challenge from Australian IT billionaire and environmentalist Mike Cannon-Brookes to help fix electricity problems in South Australia--which relies heavily on renewable energy--after crippling summer blackouts
left 1.7 million people without power, some for weeks.
Mr. Cannon-Brookes then brokered talks between Mr. Musk and Australian Prime Minister Malcolm Turnbull, who has faced criticism from climate groups for winding back renewable-energy policies in favor of coal. South Australia notwithstanding, the country's per-person greenhouse emissions are among the world's highest.
South Australia's government has yet to say how much the battery will cost taxpayers, although renewable-energy experts estimate it at US$50 million. Tesla says the system's 100-megawatt capacity makes it the world's largest, tripling the previous record array at Mira Loma in Ontario, Calif., also built by Tesla and U.S. power company Edison.
"An enormous amount of work has gone into delivering this project in such a short time," state Premier Jay Weatherill said Thursday, calling the system a clear message that South Australia will be a leader in renewable energy.
Mr. Musk tweeted, "Congratulations to the Tesla crew and South Australian authorities who worked so hard to get this manufactured and installed in record time!"
The battery will provide backup power through its evaluation over coming weeks, Mr. Weatherill said, but the real test will come with the Australian summer, between December and March, when temperatures regularly soar above 100 degrees Fahrenheit.
Mr. Weatherill's government tapped Tesla in July
, after a tender to build a large-scale storage system connected to the 33 million Australian dollar Hornsdale wind farm, being built by French company Neoen along low hills forming the southern tail of the Flinders Ranges.
The site, known as the "whispering plains," lies among valleys that funnel strong Southern Hemisphere winds and adjacent to lines powering Australia's eastern seaboard grid, which supplies nine million customers across five states.
Solar and wind produce about 40% of South Australia's electricity, and last summer's costly outages fueled a debate also familiar in the U.S. and Europe. The question: Are renewable sources ready to replace fossil fuels like coal and gas?
Energy storage, while in its global infancy, is meant to solve the variability problem of wind and solar, banking power for times of calm air or cloudy skies. Cumulative capacity of lithium-ion storage around the world is set to hit 1.1 gigawatts this year, according to the Australian Renewable Energy Agency, up from 0.2 gigawatts in 2010. A gigawatt is 1,000 megawatts.
Investment in electric vehicles by Tesla and others has helped lower battery costs and spread storage grids, including to the walls of homes. Mr. Musk, who test-marketed Tesla's residential Powerwall system
in Australia and in Hawaii, has predicted lithium-ion battery costs will plummet by the end of the decade.
Work at the Australian battery site has been cloaked in secrecy, but local people said that by the time Tesla signed the contract on Sept. 29--starting the 100-day clock--preparations were already well advanced.
At the Jamestown Commercial Hotel, which helped cater the project's launch party in September, manager Kerry Hodge said he'd previously had "no idea of who Mr. Musk was."
"They tried to get me to put in an electric charger for all these electric cars that he said were going to come from China in coming years. But I don't really believe him," he said. "We've just put in our own diesel generator to keep the power on."
Write to Rob Taylor at rob.taylor@wsj.com
Credit: By Rob Taylor
Subject: Wind farms; Alternative energy; Wind; Electric vehicles; Lithium
Location: Australia South Australia Australia United States--US
People: Turnbull, Malcolm Musk, Elon
Company / organization: Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Nov 23, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1967367054
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1967367054?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-18
Database: The Wall Street Journal
Tesla Delivers the World's Biggest Battery
Author: Taylor, Rob
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 Nov 2017: B.4.
ProQuest document link
Abstract: None available.
Full text: JAMESTOWN, Australia -- Tesla Inc. Chief Executive Elon Musk may have overpromised on production of the company's latest electric car, but he is delivering on his audacious Australian battery bet.
An enormous Tesla-built battery system -- storing electricity from a new wind farm and capable of supplying 30,000 homes for more than an hour -- will be powered up over the coming days, the government of South Australia state said Thursday. Final tests are set to be followed by a street party that Mr. Musk, founder of both Tesla and rocket maker Space Exploration Technologies Corp., or SpaceX, was expected to attend.
Success would fulfill the risky pledge Mr. Musk made in March, to deliver a working system in "100 days from contract signature or it is free." He was answering a Twitter challenge from Australian IT billionaire and environmentalist Mike Cannon-Brookes to help fix electricity problems in South Australia -- which relies heavily on renewable energy -- after crippling summer blackouts left 1.7 million people without power, some for weeks.
Mr. Cannon-Brookes then brokered talks between Mr. Musk and Australian Prime Minister Malcolm Turnbull, who has faced criticism from climate groups for winding back renewable-energy policies in favor of coal. South Australia notwithstanding, the country's per person greenhouse emissions are among the world's highest.
South Australia's government has yet to say how much the battery will cost taxpayers, although renewable-energy experts estimate it at US$50 million. Tesla says the system's 100-megawatt capacity makes it the world's largest, tripling the previous record array at Mira Loma near Ontario, Calif., also built by Tesla and U.S. power company Southern California Edison.
"An enormous amount of work has gone into delivering this project in such a short time," state Premier Jay Weatherill said Thursday, calling the system a clear message that South Australia will be a leader in renewable energy.
Mr. Musk tweeted, "Congratulations to the Tesla crew and South Australian authorities who worked so hard to get this manufactured and installed in record time!"
The battery will provide backup power through its evaluation over coming weeks, Mr. Weatherill said, but the real test will come with the Australian summer, between December and March, when temperatures regularly soar above 100 degrees Fahrenheit.
Mr. Weatherill's government tapped Tesla in July, after a tender to build a large-scale storage system connected to the 33 million Australian dollar (US$25 million) Hornsdale wind farm, being built by French company Neoen along low hills forming the southern tail of the Flinders Ranges.
The site, known as the "whispering plains," lies among valleys that funnel strong Southern Hemisphere winds and adjacent to lines powering Australia's eastern seaboard grid, which supplies nine million customers across five states.
Credit: By Rob Taylor
Subject: Wind farms; Alternative energy; Batteries
Location: Australia
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2017
Publication date: Nov 24, 2017
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1967768950
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1967768950?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-02-27
Database: The Wall Street Journal
Rio Tinto Isn't Tesla; It Should Hold Fire On a Lithium Bet; Lithium and battery plays are enjoying a futuristic ride, but Rio shouldn't follow yet
Author: Taplin, Nathaniel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Nov 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Mining is an industry of big upfront investments and long periods of pain or gain, depending on whether the digger bets right or wrong
.
It's understandable, therefore, that Rio Tinto's reported interest in acquiring a big stake in Chilean lithium-miner Sociedad Quimica y Minera is causing butterflies in the stomachs of some investors.
The miner's interest in lithium makes sense strategically. Rio is more heavily dependent on iron ore than some of its competitors, and slowdown in Chinese demand
seems likely. Boosting their exposure to lithium, a battery component and probable linchpin of an increasingly renewable and electric future, isn't a bad idea. The problem is price.
Rio has a history of buying into bubbly mineral plays at exactly the wrong time. The company's $38 billion purchase of aluminum firm Alcan in 2007--the height of the commodities bubble--is widely panned
as the worst mining deal of all time.
A potential bid for Potash Corp. of Saskatchewan's 32% stake in SQM would be worth about $4.7 billion at current prices, far less than the ill-fated Alcan bid. But there are some worrying similarities.
Aluminum prices had gained close 30% in the two years before the Alcan deal closed. The trend in lithium looks even more bubbly--prices have roughly doubled since late 2015, outpacing gains in aluminum, oil, iron ore, and copper.
Unsurprisingly, SQM also looks richly valued. It currently trades at a stomach-churning 41 times its last 12 months' earnings, according to FactSet, against just 16 times for Rio. On that basis, a potential deal looks even pricier than Alcan. When the Alcan acquisition closed in late 2007 the firm was only valued about 20 times trailing earnings.
Meanwhile lithium-reserve estimates vary wildly, and no one really knows exactly when--or if--the electric-car revolution will really arrive.
A bigger stake in the new-energy sector would make sense for Rio, especially since it appears to have decided coal power's days are limited
and is selling down its coal stakes. And Rio, for the first time in a while, has a lot of cash
and is clearly studying its options for how to deploy it.
A better use of that cash might be on Rio's own undeveloped lithium deposit at Jadar in Serbia. Still, analysts at Bernstein suggest Rio's real interest in SQM might be simply to get in the room with other bidders and learn more about the economics of the business.
If Rio wants to dive further into lithium, however, it might be wise to wait. Then it can assess the fortunes of other futuristic tech plays, such as those made by
Tesla, and see if lithium prices return from their voyage of discovery in outer space.
Write to Nathaniel Taplin at nathaniel.taplin@wsj.com
Related
* Tesla Delivers the World's Biggest Battery--and Wins a Bet
(Nov. 23, 2017)
* Heard on the Street: The Real 'War on Coal' Is in China
(Nov. 14, 2017)
* Heard on the Street: The Truth Is Catching Up With Tesla
(Oct. 7, 2017)
* Heard on the Street: Miners Risk Falling Down Same Old Hole
(Sept. 8, 2017)
* Rio Tinto Can't Just Mine the Current Rich Vein Forever
(Aug. 2, 2017)
* Digging Out of a $38 Billion Hole
(Feb. 12, 2013)
Credit: By Nathaniel Taplin
Subject: Aluminum; Prices; Iron compounds; Lithium; Coal
Location: Serbia
Company / organization: Name: Rio Tinto Group; NAICS: 212112, 212291; Name: Potash Corp of Saskatchewan Inc; NAICS: 212391, 423520
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Nov 24, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1967778499
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1967778499?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-25
Database: The Wall Street Journal
Tesla Truck Gets an Order from DHL as Shippers Give Elon Musk's New Vehicle a Try; DHL pre-orders 10 trucks; questions about electric trucks' range, battery weight
Author: Smith, Jennifer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Deutsche Post AG's DHL said Tuesday it has preordered 10 of Tesla Inc.'s Semi trucks, joining a growing list of large transportation companies looking to test the all-electric vehicles.
DHL Supply Chain, which handles logistics operations for retailers and manufacturers, intends to use the heavy-duty Tesla trucks for shuttle runs and same-day customer deliveries in major U.S. cities, the company said Tuesday. DHL also plans to test the electric trucks on longer runs, and to evaluate its impact on driver safety and comfort.
Tesla Chief Executive Elon Musk unveiled the Semi
earlier this month, promising the first models would hit the road in 2019, and run up to 500 miles on a single charge. Wal-Mart Stores Inc. and J.B. Hunt Transport Services Inc. said shortly after the announcement they had reserved vehicles, and other logistics and transportation companies have followed suit over the last couple of weeks.
In most cases, the orders have been small, with buyers planning to test out the Semi on short routes, such as between ports and nearby warehouses, or warehouses and stores. That reflects concerns about the vehicle's range--a diesel truck can run up to 1,000 miles on a single tank, or twice the Semi's maximum. Some analysts also question the weight of the battery needed for even a 500-mile run, which could limit an electric big rig's ability to carry a full trailer of freight.
Still, the specifications Mr. Musk announced exceeded expectations for many industry observers, and its price is competitive with diesel trucks, analysts with Morgan Stanley said in a note Monday. Tesla expects the vehicles to list for between $150,000 for a 300-mile range vehicle to as much as $200,000 for a "Founders Series" truck. A new diesel-powered big rig can sell for $150,000. The cost to reserve a Semi has jumped, to $20,000 for a base reservation from $5,000 at the time of the initial announcement.
DHL Supply Chain has been working with Tesla over the past few months and has test-driven some of the vehicles in California, said Jim Monkmeyer, the division's president of transportation in North America. The company ordered the trucks last week, for $5,000 per reservation but hasn't yet worked out the vehicle specifications or final cost.
Tesla declined to comment.
DHL Supply Chain plans to use the Tesla trucks on dedicated delivery and pickup runs for automotive and consumer products customers, ferrying freight to and from factories and to distribution centers. The runs "would be local," he said, though that could still mean hauls of "hundreds of miles" within a region.
Mr. Monkmeyer said he isn't concerned about timely delivery from Tesla, which has faced delays with production of its Model 3 sedan.
"Something like this that's new and is as complex as the Semi, I don't know if we can count on specific dates. We understand the challenges that they are facing," he said. "This is the future and we want to be in on the ground floor."
Fortigo Freight Services Inc., a Canadian logistics firm that manages trucking fleets for retailers and manufacturers, last week reserved a Tesla Semi for about 26,000 Canadian dollars ($20,000), the company said Tuesday. The balance, just under $181,000, will be due "when the Tesla is delivered, date to be confirmed," said Elias Demangos, Fortigo Freight's CEO.
The company has about 500 trucks, with an average run of 100 or so miles a day, Mr. Demangos said.
"Our longest run would be about 400 miles. They're city-to-city points mostly," he said. "For us, at 500 miles, that's perfect."
Write to Jennifer Smith at jennifer.smith@wsj.com
Credit: By Jennifer Smith
Subject: Logistics; Supply chains; Trucks; Vehicles
Location: California United States--US North America
People: Musk, Elon
Company / organization: Name: Wal-Mart Stores Inc; NAICS: 452112, 452910; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Deutsche Post AG; NAICS: 484110; Name: J B Hunt Transport Inc; NAICS: 484121
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Nov 28, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1969054599
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1969054599?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-29
Database: The Wall Street Journal
DHL To Test Tesla Semi
Author: Smith, Jennifer
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Nov 2017: B.4.
ProQuest document link
Abstract: None available.
Full text: Deutsche Post AG's DHL division said it preordered 10 of Tesla Inc.'s Semi trucks, joining a growing list of large transportation companies looking to test the all-electric vehicle.
DHL Supply Chain, which handles logistics operations for retailers and manufacturers, intends to use the heavy-duty Tesla trucks for shuttle runs and same-day customer deliveries in major U.S. cities, the company said Tuesday. DHL also plans to test the electric trucks on longer runs, and to evaluate its impact on driver safety and comfort.
Tesla Chief Executive Elon Musk unveiled the Semi this month, promising the first models would hit the road in 2019, and run up to 500 miles on a single charge. Wal-Mart Stores Inc. and J.B. Hunt Transport Services Inc. said shortly after the announcement they had reserved vehicles, and other logistics and transportation companies have followed suit.
In most cases, the orders have been small, with buyers planning to test out the Semi on short routes.
Credit: By Jennifer Smith
Location: United States--US
People: Musk, Elon
Company / organization: Name: Wal-Mart Stores Inc; NAICS: 452112, 452910; Name: J B Hunt Transport Inc; NAICS: 484121
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2017
Publication date: Nov 29, 2017
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1969665327
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1969665327?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-29
Database: The Wall Street Journal
Will Tesla Die for Lack of Cobalt? Probably not. The dreaded cobalt shortage seems like a story we have heard before
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Nov 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Corrections & Amplifications
Cobalt is used in the cathode of batteries. An earlier version of this article incorrectly stated cobalt was used in the anode of the batteries.
Wedged between iron and nickel on the periodic table, cobalt has suddenly emerged as the electric car killer.
The once-obscure metal, a critical part of batteries, has nearly tripled in price since last summer as concerns grow about whether there will be enough cobalt to meet demand.
The ingredients are certainly there for a shortage. Output is concentrated in the politically unstable Democratic Republic of Congo and refining is dominated by China. Demand is set to soar as companies from Tesla Inc. to Volkswagen AG ramp up production of electric vehicles.
With the price of cobalt hitting $30 a pound, investors have poured into shares of companies that mine or own rights to the metal. Canada's Cobalt27 Capital Corp., which believes there is already a deficit in supply which will worsen, is up 162% this year.
"I don't think automobile manufacturers are as concerned about price as availability," says George Heppel, a consultant at materials research firm CRU International who says the shortage could peak in 2021.
But the dreaded shortage of cobalt
, which is used in the cathode of the batteries, is a bit more complicated than industry projections would suggest. As anyone who remembers the fears around so-called rare earths metals will agree, high prices have a way of boosting supply and reducing demand. With the cost of cobalt alone having risen to over $800 for some leading EV models--about as much as that of aluminum or plastic per vehicle--mother necessity is calling.
Like cobalt, rare earths aren't so rare. China's move to restrict exports in 2010 exacerbated the perceived shortage, sending the prices of some varieties up 10-fold. Companies such as Molycorp, Rare Element Resources Ltd. and Quest Rare Mineral Ltd., which all had some connection to reserves, saw their shares surge based on supposedly rosy prospects
. Since then, all have lost nearly all of their value.
Already, Mr. Heppel explains, other users of the metal, for example in the pigments industry, are searching for alternatives. Meanwhile, some batteries, such as a design by Tesla
, use less of the metal. Lower-performing batteries use none at all, and those batteries' capabilities may improve with technological tweaks.
Supply will react too. Companies that operate copper and nickel mines, where cobalt is co-produced, are targeting expansion, and there are some pure-play cobalt mines being planned that could start producing shortly after the projected shortage hits.
For electric vehicles, this looks more like a speed bump than a cliff.
This column is part two of a series on the future of the booming world of batteries.
Write to Spencer Jakab at spencer.jakab@wsj.com
BATTERIES ARE TAKING OVER THE WORLD
This column is part two of a Heard on the Street series on the future of the booming world of batteries
* Part 1: Batteries Are Taking Over the World
* Part 2: Will Tesla Die for Lack of Cobalt?
* Part 3: Why Electric Car Companies Don't Need Batteries
* Part 4: Chinese Battery Champion Has Fully Charged IPO
* Part 5: Hard to Invest in Batteries When Prices Keep Plummeting
Related
* Why Are Investors Amassing Cobalt? Easiest Way to Play Hottest Commodity
Credit: By Spencer Jakab
Subject: Mines; Cobalt; Electric vehicles; Shortages
Location: China Canada
Company / organization: Name: Rare Element Resources Ltd; NAICS: 212221; Name: Volkswagen AG; NAICS: 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Nov 29, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1969794015
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1969794015?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-12-04
Database: The Wall Street Journal
Anheuser-Busch Orders 40 Tesla Semi Trucks; Brewer hasn't yet decided whether to buy vehicles outright or lease them as it seeks to cut fuel costs and vehicle emissions
Author: Smith, Jennifer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Dec 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Forget the Clydesdales. Anheuser-Busch has reserved 40 of Tesla Inc.'s all-electric Semi trucks, as the maker of Budweiser seeks to reduce fuel costs and vehicle emissions.
The U.S. subsidiary of Anheuser-Busch InBev NV plans to use the trucks for shipments to wholesalers within 150 to 200 miles of its brewery locations--well within the 500-mile range that Tesla Chief Executive Elon Musk has promised. The vehicles would be deployed among the brewer's so-called dedicated fleets of about 750 trucks, which bear the company's branding but are owned and managed by outside carriers.
One of the largest known reservations since the Semi was unveiled last month
, Anheuser-Busch's preorder is still tiny relative to the broader heavy-duty-truck market, which produces 250,000 to 300,000 big rigs a year.
Anheuser-Busch hasn't yet decided whether to buy the vehicles outright or lease them, said James Sembrot, the company's senior director of logistics strategy. It could also ask one of its dedicated carriers to buy or lease the trucks. The Semi won't be available until 2019. "We put the reservations down so we can prioritize our place in line," he said. "We don't know who the carrier is going to be in two to three years when these things are actually produced."
He declined to discuss the cost for the reservation, which he said was made before Tesla introduced the Semi in California last month. Tesla had set deposits at $5,000 at the time of the November announcement but has since raised the amount to $20,000. Tesla expects the trucks to list for $150,000 to $200,000; a new diesel-powered heavy-duty truck can sell for $150,000.
The Semi tractors are designed to travel as much as 500 miles on a single charge. Some question whether electric vehicles are a viable option for long-haul trucking, citing concerns about range and battery weight.
Still, companies looking to trim transportation costs are seeking to test out the Tesla truck. J.B. Hunt Transport Services Inc. and Wal-Mart Stores Inc., which each operate thousands of trucks, have reserved Semis, as has Deutsche Post AG's DHL Supply Chain and truck-leasing and fleet-management company Ryder System Inc.
Fuel, along with labor, is historically one of the biggest expenses for trucking companies, according to the American Transportation Research Institute, an industry research group.
Anheuser-Busch spends about $120 million on fuel each year for its dedicated fleets and long-haul transportation by for-hire carriers moving beer between breweries and wholesalers, Mr. Sembrot said. The company wants to cut its carbon footprint by 30% by 2025, and has invested in alternative-fuel vehicles, such as leasing delivery trucks that run on compressed natural gas. It is also in discussions with Nikola Motor Co., which is developing hydrogen-electric semi-trucks.
Mr. Sembrot said Anheuser-Busch views the Tesla truck and the Nikola vehicle, which the company says will be able to travel from 800 to 1,200 miles on one fill-up, as potentially complementary technologies.
"We have needs for all those types of distances," he said.
How much the Semi can haul remains in question, however.
"You don't have a transmission, you don't have an engine, but how much exactly does the battery weigh," Mr. Sembrot said. "We're not shipping cotton balls around, so the weight of the equipment matters to us."
But many trucking companies, which move freight thousands of miles across the country, might not be as eager to test out the new Tesla trucks.
"We're going to sit on the sidelines and watch that develop," said James Welch, chief executive of YRC Worldwide Inc., one of the largest less-than-truckload carriers.
YRC trucks make both local and long-distance trips, and the Tesla truck's 500-mile range would be a liability on long-haul routes, he said. The company would also have difficulty maximizing electric trucks' time on the road because they need longer to recharge, compared with time needed to refuel a diesel-powered big rig.
"Recharging time has to be quick because you're paying a driver whether he or she is running or sitting," Mr. Welch said.
Brian Baskin contributed to this article.
Write to Jennifer Smith at jennifer.smith@wsj.com
Credit: By Jennifer Smith
Subject: Wholesalers; Trucks; Breweries; Costs; Trucking industry; Vehicles
Location: United States--US California
People: Musk, Elon
Company / organization: Name: American Transportation Research Institute; NAICS: 541711; Name: J B Hunt Transport Inc; NAICS: 484121; Name: Ryder System Inc; NAICS: 484121, 532120; Name: Wal-Mart Stores Inc; NAICS: 452112, 452910; Name: Deutsche Post AG; NAICS: 484110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Dec 7, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1973389426
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1973389426?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-12-08
Database: The Wall Street Journal
Anheuser-Busch Orders 40 of Tesla's All-Electric Trucks
Author: Smith, Jennifer
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 Dec 2017: B.4.
ProQuest document link
Abstract: None available.
Full text: Forget the Clydesdales. Anheuser-Busch has reserved 40 of Tesla Inc.'s all-electric Semi trucks, as the maker of Budweiser seeks to reduce fuel costs and vehicle emissions.
The U.S. subsidiary of Anheuser-Busch InBev NV plans to use the trucks for shipments to wholesalers within 150 to 200 miles of its brewery locations -- well within the 500-mile range that Tesla Chief Executive Elon Musk has promised. The vehicles would be deployed among the brewer's so-called dedicated fleets of about 750 trucks, which bear the company's branding but are owned and managed by outside carriers.
One of the largest known reservations since the Semi was unveiled last month, Anheuser-Busch's preorder is still tiny relative to the broader heavy-duty-truck market, which produces 250,000 to 300,000 big rigs a year.
Anheuser-Busch hasn't decided whether to buy the vehicles or lease them, said James Sembrot, the company's senior director of logistics strategy. It could ask one of its dedicated carriers to buy or lease the trucks. The Semi won't be available until 2019. "We put the reservations down so we can prioritize our place in line," he said. "We don't know who the carrier is going to be in two to three years."
He declined to discuss the cost for the reservation, which he said was made before Tesla introduced the Semi in California last month. Tesla had set deposits at $5,000 at the time of the November announcement but has since raised the amount to $20,000. Tesla expects the trucks to list for $150,000 to $200,000; a new diesel-powered heavy-duty truck can sell for $150,000.
The Semi tractors are designed to travel as much as 500 miles on a single charge. Some question whether electric vehicles are a viable option for long-haul trucking, citing concerns about range and battery weight.
Still, companies looking to trim transportation costs are seeking to test out the Tesla truck. J.B. Hunt Transport Services Inc. and Wal-Mart Stores Inc., which each operate thousands of trucks, have reserved Semis, as has truck-leasing and fleet-management company Ryder System Inc.
Anheuser-Busch spends $120 million on fuel each year for its dedicated fleets and long-haul transportation by for-hire carriers moving beer between breweries and wholesalers, Mr. Sembrot said. The company wants to cut its carbon footprint by 30% by 2025, and has invested in alternative-fuel vehicles, such as leasing delivery trucks that run on compressed natural gas.
---
Brian Baskin contributed to this article.
Credit: By Jennifer Smith
Subject: Breweries; Trucks; Factory orders; Electric vehicles
Location: United States--US
People: Musk, Elon
Company / organization: Name: Anheuser-Busch InBev; NAICS: 312120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2017
Publication date: Dec 8, 2017
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1973754885
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1973754885?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-18
Database: The Wall Street Journal
How Tesla Electrified Rivals at the L.A. Auto Show; The Silicon Valley carmaker cast a long shadow in Los Angeles as BMW, Jaguar and VW imitated the wily brand. Can their electric concepts hold their own next to Elon Musk's Model 3, asks Dan Neil
Author: Neil, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: OH, HELLO. I wasn't expecting to see a Tesla booth at the Los Angeles Auto Show
, much less meet the elusive Model 3, sitting front and center at the doorway of South Hall. The Silicon Valley carmaker shares few interests with other OEMs (original equipment manufacturers) on a strategic level, and even fewer with their dealers, so it generally forgoes the pleasure of their company.
There are many cars in this building but really only one story, and you, my mouthless red friend, are it. In the space of a decade, Tesla CEO Elon Musk
has effectively reinvented the automobile, from propulsion to user interface, and helped kick-start the age of autonomy. The company's influence, its ideas, can be seen in every corner of the L.A. Convention Center.
But the Model 3 ($35,000 to start, with 220-mile range) represents the greatest challenge yet: building a mid-priced car not in thousands of units but hundreds of thousands, every year, and not losing money doing it. Many fine automakers have shed blood on that hill.
You sure are a handsome little droid. I wonder what you're like on the inside? Hmph. Locked. That figures.
To no one's particular surprise, Model 3 production is behind schedule, partly due to automation hiccups in the company's battery-making Gigafactory 1 in Reno, Nev., but mostly, if you ask me, because the schedule was wildly unrealistic. Typical product development times in the industry are around 40 months for vehicles with a fraction of the design equity of the Model 3. Its runway was much shorter, about 24 months, I estimate, assuming development began eight months before the design concept went public in April 2016. Software for some systems continues to evolve and the assembly-line robots are still honing their craft.
Even my new friend here-- a show car almost certainly hand-fettled for the occasion --suffers from faults of panel alignment. Nothing personal, dude, nothing but love.
Tesla had initially projected ramping up to 5,000 units per week by the end of the year. The latest update pushes that target to the end of Q1. Those robots better get cracking. As of the end of November Tesla had built and sold a mere 712 units, according to InsideEVs. The company has about a half-million pre-orders in hand.
These developments--and the company's prodigious burn rate, an estimated $8,000 per minute--have brought out the three-eyed ravens squawking auguries of doom. Oh, please. If Tesla were to run out of money today, by tomorrow Chinese and Arab investors would be dueling in the streets over it. The doors would still open. The Model 3 would still come out and, with the help of a half-million friends, would still hasten the rise of emission-free electrics, which was Mr. Musk's objective all along. His ownership position may not make it to the promised land but the company will.
Mr. Musk may yet drown in his own prescience. China's lurch toward vehicle electrification--including steep mandates and penalties for noncompliance--has tipped the scales in favor of electric propulsion with two things the nascent industry needed most: lower costs through economies of scale and certainty of demand. Every global carmaker is pouring resources into electrification, which lives in harmony with other rising tech such as autonomy, immersive connectivity and sharing. The OEMs are coming and they've got their knives out.
Down the way from the Model 3, VW was making the case for its own people's electric: the I.D. Crozz, unveiled for the first time in the U.S., with production set for 2020. The four-door hatch with crossover stance will be the first of 15 all-electric models from the freshly minted I.D. division by 2025, all based on its MEB platform.
While taller, the I.D. Crozz is anatomically similar to the Tesla: flat-floor mounted battery pack (83 kWh, up to 300-mile range, DC fast charging); fore and aft electric motors, totaling 302 hp; minimal front overhang, low scuttle, and short, kicked-up rear deck. Embedded in the transparent roof of the concept car are four hockey-puck sized sensors, the basis for the car's semi-autonomous dimensions. VW said its I.D. Pilot self-driving system will enter production in 2025.
Over at the Jaguar stand visitors can have a look at a near-production i-PACE luxury electric crossover. It's a witty, Brit-y riposte to Tesla's Model X but with non-insane doors. The Jag's face strikes me as a bit less strange, too, whereas the Model X looks like it's wearing a zipper-lipped bondage mask.
The Jag's prospective numbers include 400-hp all-wheel-drive; 0-60 mph in under 4 seconds; a 90-kWh battery pack with DC fast charging. The i-PACE will be built in Austria by the excellent coachbuilder Magna Steyr, with deliveries beginning the second half of year. It looks like a major winner.
BMW is also strolling toward innovation. The company brought its i Vision Dynamics concept, an all-electric "Gran Coupe" that anticipates an all-electric 5 Series model set for 2021. Also at the BMW stand was a sportier version of the i3--how hard can that be?--as well as a beautiful roadster rendition of the i8.
Of course, not everybody is disrupted, not just yet. Chevy rolled out two stupendous Corvette ZR1s, a coupe ($119,995) and a convertible ($123,995), each with a 755-hp supercharged V8 bursting through the hood. With a top speed of 212 mph, the ZR1 Coupe is the fastest 'Vette ever and is likely to go down as greatest of the front-engined Corvettes. The next-generation will put the engine behind the cockpit.
See, these are the good old days.
Credit: By Dan Neil
Subject: Automobile shows; Automobile industry
Location: Los Angeles California
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Dec 8, 2017
column: Rumble Seat
Section: Life
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1974057795
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1974057795?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-12-10
Database: The Wall Street Journal
OFF DUTY --- Gear & Gadgets -- Rumble Seat: How Tesla Electrified the Competition in L.A.
Author: Neil, Dan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 Dec 2017: D.13.
ProQuest document link
Abstract: None available.
Full text: Oh, hello. I wasn't expecting to see a Tesla booth at the Los Angeles Auto Show, much less meet the elusive Model 3, sitting front and center at the doorway of South Hall. The Silicon Valley carmaker shares few interests with other OEMs (original equipment manufacturers) on a strategic level, and even fewer with their dealers, so it generally forgoes the pleasure of their company.
There are many cars in this building but really only one story, and you, my mouthless red friend, are it. In the space of a decade, Tesla CEO Elon Musk has effectively reinvented the automobile, from propulsion to user interface, and helped kick-start the age of autonomy. The company's influence, its ideas, can be seen in every corner of the L.A. Convention Center.
But the Model 3 ($35,000 to start, with 220-mile range) represents the greatest challenge yet: building a mid-priced car not in thousands of units but hundreds of thousands, every year, and not losing money doing it. Many fine automakers have shed blood on that hill.
You sure are a handsome little droid. I wonder what you're like on the inside? Hmph. Locked. That figures.
To no one's particular surprise, Model 3 production is behind schedule, partly due to automation hiccups in the company's battery-making Gigafactory 1 in Reno, Nev., but mostly, if you ask me, because the schedule was wildly unrealistic. Typical product development times in the industry are around 40 months for vehicles with a fraction of the design equity of the Model 3. Its runway was much shorter, about 24 months, I estimate, assuming development began eight months before the design concept went public in April 2016. Software for some systems continues to evolve and the assembly-line robots are still honing their craft.
Even my new friend here -- a show car almost certainly hand-fettled for the occasion -- suffers from faults of panel alignment. Nothing personal, dude, nothing but love.
Tesla had initially projected ramping up to 5,000 units per week by the end of the year. The latest update pushes that target to the end of Q1. Those robots better get cracking. As of the end of November Tesla had built and sold a mere 712 units, according to InsideEVs. The company has about a half-million pre-orders in hand.
These developments -- and the company's prodigious burn rate, an estimated $8,000 per minute -- have brought out the three-eyed ravens squawking auguries of doom. Oh, please. If Tesla were to run out of money today, by tomorrow Chinese and Arab investors would be dueling in the streets over it. The doors would still open. The Model 3 would still come out and, with the help of a half-million friends, would still hasten the rise of emission-free electrics, which was Mr. Musk's objective all along. His ownership position may not make it to the promised land but the company will.
Mr. Musk may yet drown in his own prescience. China's lurch toward vehicle electrification -- including steep mandates and penalties for noncompliance -- has tipped the scales in favor of electric propulsion with two things the nascent industry needed most: lower costs through economies of scale and certainty of demand. Every global carmaker is pouring resources into electrification, which lives in harmony with other rising tech such as autonomy, immersive connectivity and sharing. The OEMs are coming and they've got their knives out.
Down the way from the Model 3, VW was making the case for its own people's electric: the I.D. Crozz, unveiled for the first time in the U.S., with production set for 2020. The four-door hatch with crossover stance will be the first of 15 all-electric models from the freshly minted I.D. division by 2025, all based on its MEB platform.
While taller, the I.D. Crozz is anatomically similar to the Tesla: flat-floor mounted battery pack (83 kWh, up to 300-mile range, DC fast charging); fore and aft electric motors, totaling 302 hp; minimal front overhang, low scuttle, and short, kicked-up rear deck. Embedded in the transparent roof of the concept car are four hockey-puck sized sensors, the basis for the car's semi-autonomous dimensions. VW said its I.D. Pilot self-driving system will enter production in 2025.
Over at the Jaguar stand visitors can have a look at a near-production i-PACE luxury electric crossover. It's a witty, Brit-y riposte to Tesla's Model X but with non-insane doors. The Jag's face strikes me as a bit less strange, too, whereas the Model X looks like it's wearing a zipper-lipped bondage mask.
The Jag's prospective numbers include 400-hp all-wheel-drive; 0-60 mph in under 4 seconds; a 90-kWh battery pack with DC fast charging. The i-PACE will be built in Austria by the excellent coachbuilder Magna Steyr, with deliveries beginning the second half of year. It looks like a major winner.
BMW is also strolling toward innovation. The company brought its i Vision Dynamics concept, an all-electric "Gran Coupe" that anticipates an all-electric 5 Series model set for 2021. Also at the BMW stand was a sportier version of the i3 -- how hard can that be? -- as well as a beautiful roadster rendition of the i8.
Of course, not everybody is disrupted, not just yet. Chevy rolled out two stupendous Corvette ZR1s, a coupe ($119,995) and a convertible ($123,995), each with a 755-hp supercharged V8 bursting through the hood. With a top speed of 212 mph, the ZR1 Coupe is the fastest 'Vette ever and is likely to go down as greatest of the front-engined Corvettes. The next-generation will put the engine behind the cockpit.
See, these are the good old days.
Credit: By Dan Neil
Subject: Automobile industry; Product development
Location: Los Angeles California
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: D.13
Publication year: 2017
Publication date: Dec 9, 2017
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1974505235
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1974505235?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-12-09
Database: The Wall Street Journal
The Fast and the Financed: China's Well-Funded Auto Startups Race to Overtake Tesla; Shanghai-based NIO's first production car, the ES8, launched Saturday to rival Tesla's Model X
Author: Moss, Trefor
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Dec 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Backed by billions from influential investors and armed with global talent, over a dozen Chinese startups want to make dinosaurs of incumbent auto makers. As they start production, their determination is raising the pressure to innovate at traditional auto makers.
"Tesla paved the way, now we're taking this a step further," said Padmasree Warrior, who runs the U.S. arm of Shanghai-based NIO, one of the Chinese startups that want to drive the convergence of the automotive and technology industries. "We have a mission to transform mobility."
Tesla Inc. disrupted the automobile industry a decade ago with its shift to electric vehicles. The next phase, automakers are targeting is poised to turn cars into "iPads on wheels," said Michael Dunne, managing director of Hong Kong-based consultancy Dunne Automotive.
Chinese auto startups--many of them founded just two or three years ago--are betting they can leapfrog existing auto makers in creating a new world of electric, networked cars that drive themselves. But they must make enough of a splash at a time when some of the game-changing technologies they advocate, notably self-driving software, are still in the testing lab.
NIO launched its first production car--the ES8 sport-utility vehicle--in Beijing on Saturday, having raised $1 billion last month in a funding round led by social-media giant Tencent Holdings Ltd. Baidu Inc., which dominates Chinese internet search, is another investor.
NIO Chairman William Li presents the ES8 as a rival for Tesla's Model X.
During the launch event, the ES8, which responds to voice commands and has limited self-driving capability, reverse-parked itself into a battery-swapping facility which can switch the car's battery pack in under three minutes, enabling it to match gasoline cars for convenience, claimed Mr. Li. The battery can also be fully charged in one hour, and gives the car a 220-mile range.
The ES8 starts at around $68,000 before subsidies, while Tesla's Model X, which is subject to import tariffs and is ineligible for subsidies in China, costs roughly twice that here. Mr. Li said the ES8, which is now on presale, is expected to be with buyers in the first half of 2018.
Most Chinese auto startups aim to launch in China in 2018 and expect to tackle the U.S. and Europe by around 2020. But their window of opportunity may be narrow; Tesla has confirmed plans to build a factory in Shanghai, which is likely to start producing cars in around 2021, and most traditional auto makers, both Chinese and foreign, have committed to producing electric vehicles and are experimenting with autonomous technology and in-car internet services.
In a sign of the changing times in the auto business, Ford Motor's Executive Chairman Bill Ford said at a news conference in Shanghai in December that the century-old auto maker was transforming itself into a "mobility company, designing smart vehicles for a smart world." Ford is in talks with Alibaba Group Holding, China's dominant e-commerce company, to develop advanced mobility services, while Volkswagen is holding discussions with Didi Chuxing Technology Co., the local equivalent of Uber, to design new service models.
Despite such developments, the startups believe they can tap growth in China's premium and electric-car segments--Tesla's turf--and outshine incumbents with radically innovative products.
That means following the Tesla playbook by coming to market with a killer brand, said Mr. Dunne. But Tesla has "the aura of Elon Musk standing behind the product," he said, "and that's really hard to match."
Like many Chinese technology companies and auto startups, NIO has an operation in California, with over 300 employees developing autonomous driving and other critical software. The company's trawl for global talent netted experienced tech professionals like Ms. Warrior, a former chief technology officer at both Cisco Systems Inc. and Motorola Inc. who also serves on the board of Microsoft Corp.
Rivals to NIO are making similar strides. Byton, which is run by ex-BMW and Nissan executives, opened a new California base in December, having recruited former Tesla and Apple staffers to run its team there. Like NIO, Byton plans to develop software in the U.S. but manufacture in China in time for a 2019 launch.
NEVS, a Sino-Swedish venture which acquired the assets of bankrupt Swedish auto maker Saab in 2012, started production on an electric version of the Saab 9-3 in Tianjin in December. A spokesman said NEVS isn't aiming to sell its cars to ordinary consumers, but to platform operators such as Didi Chuxing, which like Uber and other ride-share companies may develop fleets in a future less focused on private cars.
Another contender, WM Motor, also backed by Baidu and Tencent and run by former Geely Auto executives, finished building a plant in eastern China in September and plans to start production in early 2018. WM--or "Weltmeister"-- aims to offer a drastically cheaper alternative to both Tesla or NIO, with mass-market EVs for under $30,000.
In the expensive business of auto development, many of these newcomers will fall by the wayside, cautioned Mr. Dunne.
Some have already hit trouble. Overextended Chinese multimedia conglomerate LeEco's ongoing cash crunch was caused in part by a costly foray into electric-vehicle production, and its financial woes have also hit Faraday Future, a U.S. EV start-up backed by LeEco founder Jia Yueting, which has abandoned plans for a $1 billion plant in Nevada.
Write to Trefor Moss at Trefor.Moss@wsj.com
Credit: By Trefor Moss
Subject: Asset acquisitions; Automobile industry; Subsidies; Electric vehicles; Startups
Location: Beijing China California United States--US Europe
Company / organization: Name: Tencent Holdings Ltd; NAICS: 517210; Name: Ford Motor Co; NAICS: 3339 24, 336111, 336390; Name: Baidu Inc; NAICS: 519130; Name: Volkswagen AG; NAICS: 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Dec 17, 2017
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1977625723
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1977625723?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-12-18
Database: The Wall Street Journal
China Startups Take Aim at Tesla --- Host of well-financed developers are racing to bring smart electric vehicles to market
Author: Moss, Trefor
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 Dec 2017: B.4.
ProQuest document link
Abstract: None available.
Full text: Backed by billions from influential investors and armed with global talent, over a dozen Chinese startups want to make dinosaurs of incumbent auto makers. As they start production, their determination is raising the pressure to innovate at traditional auto makers.
"Tesla paved the way, now we're taking this a step further," said Padmasree Warrior, who runs the U.S. arm of Shanghai-based NIO, one of the Chinese startups that want to drive the convergence of the automotive and technology industries. "We have a mission to transform mobility."
Chinese auto startups -- many of them founded just two or three years ago -- are betting they can leapfrog existing auto makers in creating a new world of electric, networked cars that drive themselves. But they must make enough of a splash at a time when some of the game-changing technologies they advocate, notably self-driving software, are still in the testing lab.
NIO launched its first production car -- the ES8 sport-utility vehicle -- in Beijing on Saturday, having raised $1 billion last month in a funding round led by social-media company Tencent Holdings Ltd. Baidu Inc., which dominates Chinese internet search, is another investor.
NIO Chairman William Li presents the ES8 as a rival for Tesla's Model X.
During the launch event, the ES8, which responds to voice commands and has limited self-driving capability, reverse-parked itself into a battery-swapping facility that can switch the car's battery pack in under three minutes, said Mr. Li. The battery can also be fully charged in one hour, and gives the car a 220-mile range.
The ES8 starts at around $68,000 before subsidies, while Tesla's Model X, which is subject to import tariffs and is ineligible for subsidies in China, costs roughly twice that here. Mr. Li said the ES8, which is now on presale, is expected to be with buyers in the first half of 2018.
Most Chinese auto startups aim to launch in China in 2018 and expect to tackle the U.S. and Europe by around 2020. But their window of opportunity might be narrow; Tesla has confirmed plans to build a factory in Shanghai, which is likely to start producing cars around 2021, and most traditional auto makers have committed to producing electric vehicles and are experimenting with autonomous technology and in-car internet services.
In a sign of the changing times in the auto business, Ford Motor Co. Executive Chairman Bill Ford said at a news conference in Shanghai in December that the century-old auto maker was transforming itself into a "mobility company, designing smart vehicles for a smart world."
Ford is in talks with Alibaba Group Holding, China's dominant e-commerce company, to develop advanced mobility services, while Volkswagen AG is holding discussions with Didi Chuxing Technology Co., the local equivalent of Uber, to design new service models.
Like many Chinese technology companies and auto startups, NIO has an operation in California, with more than 300 employees developing autonomous driving and other critical software.
Rivals to NIO are making similar strides. Byton, which is run by former BMW AG and Nissan Motor Co. executives, opened a California base in December. Like NIO, Byton plans to develop software in the U.S., but manufacture in China in time for a 2019 launch.
NEVS, a Sino-Swedish venture that acquired the assets of bankrupt Swedish auto maker Saab in 2012, started production on an electric version of the Saab 9-3 in Tianjin in December. A spokesman said NEVS isn't aiming to sell its cars to ordinary consumers, but to platform operators such as Didi Chuxing, which like Uber Technologies Inc. and other ride-share companies might develop fleets.
WM Motor, also backed by Baidu and Tencent, finished building a plant in eastern China in September and plans to start production in early 2018. WM aims to offer a cheaper alternative to both Tesla or NIO, with mass-market EVs for under $30,000.
Credit: By Trefor Moss
Subject: Asset acquisitions; Automobile industry; Startups; Electric vehicles
Location: China
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2017
Publication date: Dec 18, 2017
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newsp apers
Language of publication: English
Document type: News
ProQuest document ID: 1977736154
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1977736154?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-24
Database: The Wall Street Journal
Elon Musk Touts Tesla Pickup Plans, Though Light on Detail; He says on Twitter that the truck would come after the release of a new compact SUV
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Dec 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Elon Musk teased details for a pickup truck that would challenge Ford Motor Co. and others in one of their most lucrative segments--though, true to form, the Tesla Inc. chief was vague about his intentions.
In comments posted Tuesday on Twitter, Mr. Musk said the truck would come after the electric-car maker releases a new compact sport-utility vehicle, which the billionaire entrepreneur has suggested could hit the road as soon as 2019
.
Mr. Musk, responding to a question on the social-media platform about how the truck's size would compare to Ford's best-selling F-Series, said his pickup would be similar if not slightly bigger "to account for a really gamechanging (I think) feature I'd like to add."
A pickup would allow Tesla to enter a market that has long fueled traditional U.S. auto makers' bottom lines. Analysts estimate the average pickup earns more than $10,000 in profit for Ford and General Motors Co.
The vague statement to his 17.1 million Twitter followers was a classic Musk move: stoking enthusiasm for future products laid out in his so-called "Master Plan, Part Deux" even as he struggles to bring his latest vehicle to market.
Tesla is rushing to ramp up production of the Model 3 sedan after delaying Mr. Musk's goal of making 5,000 a week by year's end until late in the first quarter of next year.
The Silicon Valley company has attributed delays to battery-pack assembly at its factory near Reno, Nev. The Wall Street Journal in October reported an assembly plant in Fremont, Calif., wasn't ready when production began in July
.
"Seems like Tesla is biting off a lot and should focus to master the Model 3 first," Michelle Krebs, an analyst for Autotrader, said Tuesday.
Mr. Musk had said the arrival of the Model 3, which starts at $35,000, would lift the company's overall vehicle production to 500,000 next year from about 84,000 last year, a goal he since has shied from. Similarly, he has said the Model Y SUV could reach 500,000 to 1 million vehicles a year. "It's the obvious priority after Model 3," he told analysts in August 2016.
"I promise that we will make a pickup truck right after Model Y," Mr. Musk said in the conversation on Twitter. "Have had the core design/engineering elements in my mind for almost 5 years. Am dying to build it."
In April, Mr. Musk said on Twitter the new pickup would be unveiled in 18 to 24 months. Then in September, as he prepared to reveal a commercial semitrailer truck for 2019
, he coyly responded to a question on Twitter about whether the pickup would be next by asking: "What if we just made a mini version of the Tesla Semi?"
Mike Colias contributed to this article.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Latest Entrants Into Electric Car Race: Makers of Post-It Notes, Paint
Credit: By Tim Higgins
Subject: Social networks; Automobile industry; Factories
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Dec 27, 2017
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1980393229
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1980393229?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-18
Database: The Wall Street Journal
Elon Musk Hints At Tesla Pickup To Challenge Ford
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 Dec 2017: B.4.
ProQuest document link
Abstract: None available.
Full text: Elon Musk teased details for a pickup truck that would challenge Ford Motor Co. and others in one of their most lucrative segments -- though, true to form, the Tesla Inc. chief was vague about his intentions.
In comments posted Tuesday on Twitter, Mr. Musk said the truck would come after the electric-car maker releases a new compact sport-utility vehicle, which the billionaire entrepreneur has suggested could hit the road as soon as 2019.
Mr. Musk, responding to a question on the social-media platform about how the truck's size would compare with Ford's best-selling F-Series, said his pickup would be similar if not slightly bigger "to account for a really gamechanging (I think) feature I'd like to add."
A pickup would allow Tesla to enter a market that has long fueled traditional U.S. auto makers' bottom lines. Analysts estimate the average pickup earns more than $10,000 in profit for Ford and General Motors Co.
The vague statement to his 17.1 million Twitter followers was a classic Musk move: stoking enthusiasm for future products laid out in his so-called "Master Plan, Part Deux" even as he struggles to bring his latest vehicle to market.
Tesla is rushing to ramp up production of the Model 3 sedan after delaying Mr. Musk's goal of making 5,000 a week by year's end until late in the first quarter of next year.
The Silicon Valley company has attributed delays to battery-pack assembly at its factory near Reno, Nev. The Wall Street Journal in October reported an assembly plant in Fremont, Calif., wasn't ready when production began in July.
"Seems like Tesla is biting off a lot and should focus to master the Model 3 first," Michelle Krebs, an analyst for Autotrader, said Tuesday.
Mr. Musk had said the arrival of the Model 3, which starts at $35,000, would lift the company's overall vehicle production to 500,000 next year from about 84,000 last year, a goal he since has shied from. Similarly, he has said the Model Y SUV could reach 500,000 to 1 million vehicles a year. "It's the obvious priority after Model 3," he told analysts in August 2016.
"I promise that we will make a pickup truck right after Model Y," Mr. Musk said in the conversation on Twitter. "Have had the core design/engineering elements in my mind for almost 5 years. Am dying to build it."
In April, Mr. Musk said on Twitter the new pickup would be unveiled in 18 to 24 months. Then in September, as he prepared to reveal a commercial semitrailer truck for 2019, he coyly responded to a question on Twitter about whether the pickup would be next by asking: "What if we just made a mini version of the Tesla Semi?"
---
Mike Colias contributed to this article.
Credit: By Tim Higgins
Subject: Automobile production; Trucks
People: Musk, Elon
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2017
Publication date: Dec 27, 2017
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1980699665
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1980699665?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-29
Database: The Wall Street Journal
For Tesla, Deliver, Don't Promise, in 2018; Elon Musk needs to make Model 3 dreams a reality to keep credibility with investors
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Dec 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Elon Musk is best when he sketches out Tesla Inc.'s distant future. In 2018, Mr. Musk should focus on the mundane present.
The new year will present Tesla's greatest operational challenge. Rather than issuing promises of an electric semi truck, a new sports car and a pickup truck
, as he did in recent months, Mr. Musk needs to figure out how to produce hundreds of thousands of mass-market sedans at a profit.
If he can't, Tesla could find itself trying to raise capital in a less-friendly market, meaning his highly loyal shareholders could be hurt by a wave of stock issuance. So far, the investors have forgiven Tesla for its production problems. Shares were up 47% in 2017, and Tesla's market value of $53 billion rivals that of Ford Motor Co. and General Motors Co.
But the gaudy stock performance belies a more-troubled picture
.
Tesla delivered just 220 of its Model 3 mass-market sedans in the third quarter, well below its forecast of 1,500. Tesla, which will report fourth-quarter deliveries next week, said in November that it hopes to achieve a production rate of 5,000 cars a week by late in the first quarter of 2018, after previously predicting
it would hit that milestone this year.
More downward revisions to growth expectations are possible. Analyst consensus calls for Tesla to deliver about 180,000 Model 3s next year; it will be very hard to hit that estimate without a quick ramp-up in deliveries.
The Model 3 was supposed to generate big profits for Tesla but is nowhere close to doing that. Analysts expect an adjusted loss of $8.76 a share in 2017 and $3.81 a share in 2018, according to FactSet. A year ago, those analysts expected a loss of 97 cents a share in 2017 and a profit of $1.59 a share in 2018.
Tesla investors have always been willing to forgive
overly aggressive forecasts. But heavy capital spending to bring the Model 3 online, as well as Tesla's 2016 acquisition of SolarCity, have strained the balance sheet. That, along with fresh electric-car competition from rivals, means increasing urgency to actually deliver on these promises.
The stock has sold off nearly 20% from September's recent high. Tesla needs to keep its share price high, since it uses the capital markets to fund its operations. More debt doesn't seem like a practical solution--Tesla issued $1.8 billion in bonds
due in 2025 over the summer; those bonds now trade below par. And the lower the stock price, the more any new equity raise would dilute existing shareholders.
Don't underestimate the challenges Tesla faces. The company has never produced a fraction of the cars it needs to deliver, and it has never made a profit while selling far more expensive vehicles. Producing more cars won't solve the problem without quantum leaps in production efficiency.
Mr. Musk has taken this company farther than almost anyone expected. In the coming year, he will be judged on operations, not hype.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Automobiles; Stockholders; Investments; Capital expenditures
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Dec 29, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1981909025
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1981909025?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-18
Database: The Wall Street Journal
For Tesla, Deliver, Don't Promise, in 2018; Elon Musk needs to make Model 3 dreams a reality to keep credibility with investors
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Dec 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Elon Musk is best when he sketches out Tesla Inc.'s distant future. In 2018, Mr. Musk should focus on the mundane present.
The new year will present Tesla's greatest operational challenge. Rather than issuing promises of an electric semi truck, a new sports car and a pickup truck
, as he did in recent months, Mr. Musk needs to figure out how to produce hundreds of thousands of mass-market sedans at a profit.
If he can't, Tesla could find itself trying to raise capital in a less-friendly market, meaning his highly loyal shareholders could be hurt by a wave of stock issuance. So far, the investors have forgiven Tesla for its production problems. Shares were up 47% in 2017, and Tesla's market value of $53 billion rivals that of Ford Motor Co. and General Motors Co.
But the gaudy stock performance belies a more-troubled picture
.
Tesla delivered just 220 of its Model 3 mass-market sedans in the third quarter, well below its forecast of 1,500. Tesla, which will report fourth-quarter deliveries next week, said in November that it hopes to achieve a production rate of 5,000 cars a week by late in the first quarter of 2018, after previously predicting
it would hit that milestone this year.
More downward revisions to growth expectations are possible. Analyst consensus calls for Tesla to deliver about 180,000 Model 3s next year; it will be very hard to hit that estimate without a quick ramp-up in deliveries.
The Model 3 was supposed to generate big profits for Tesla but is nowhere close to doing that. Analysts expect an adjusted loss of $8.76 a share in 2017 and $3.81 a share in 2018, according to FactSet. A year ago, those analysts expected a loss of 97 cents a share in 2017 and a profit of $1.59 a share in 2018.
Tesla investors have always been willing to forgive
overly aggressive forecasts. But heavy capital spending to bring the Model 3 online, as well as Tesla's 2016 acquisition of SolarCity, have strained the balance sheet. That, along with fresh electric-car competition from rivals, means increasing urgency to actually deliver on these promises.
The stock has sold off nearly 20% from September's recent high. Tesla needs to keep its share price high, since it uses the capital markets to fund its operations. More debt doesn't seem like a practical solution--Tesla issued $1.8 billion in bonds
due in 2025 over the summer; those bonds now trade below par. And the lower the stock price, the more any new equity raise would dilute existing shareholders.
Don't underestimate the challenges Tesla faces. The company has never produced a fraction of the cars it needs to deliver, and it has never made a profit while selling far more expensive vehicles. Producing more cars won't solve the problem without quantum leaps in production efficiency.
Mr. Musk has taken this company farther than almost anyone expected. In the coming year, he will be judged on operations, not hype.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Automobiles; Stockholders; Investments; Capital expenditures
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Dec 30, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1982003396
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1982003396?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-18
Database: The Wall Street Journal
For Tesla, Deliver, Don't Promise, in 2018; Elon Musk needs to make Model 3 dreams a reality to keep credibility with investors
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Dec 2017: n/a.
ProQuest document link
Abstract: None available.
Full text: Elon Musk is best when he sketches out Tesla Inc.'s distant future. In 2018, Mr. Musk should focus on the mundane present.
The new year will present Tesla's greatest operational challenge. Rather than issuing promises of an electric semi truck, a new sports car and a pickup truck
, as he did in recent months, Mr. Musk needs to figure out how to produce hundreds of thousands of mass-market sedans at a profit.
If he can't, Tesla could find itself trying to raise capital in a less-friendly market, meaning his highly loyal shareholders could be hurt by a wave of stock issuance. So far, the investors have forgiven Tesla for its production problems. Shares were up 47% in 2017, and Tesla's market value of $53 billion rivals that of Ford Motor Co. and General Motors Co.
But the gaudy stock performance belies a more-troubled picture
.
Tesla delivered just 220 of its Model 3 mass-market sedans in the third quarter, well below its forecast of 1,500. Tesla, which will report fourth-quarter deliveries next week, said in November that it hopes to achieve a production rate of 5,000 cars a week by late in the first quarter of 2018, after previously predicting
it would hit that milestone this year.
More downward revisions to growth expectations are possible. Analyst consensus calls for Tesla to deliver about 180,000 Model 3s next year; it will be very hard to hit that estimate without a quick ramp-up in deliveries.
The Model 3 was supposed to generate big profits for Tesla but is nowhere close to doing that. Analysts expect an adjusted loss of $8.76 a share in 2017 and $3.81 a share in 2018, according to FactSet. A year ago, those analysts expected a loss of 97 cents a share in 2017 and a profit of $1.59 a share in 2018.
Tesla investors have always been willing to forgive
overly aggressive forecasts. But heavy capital spending to bring the Model 3 online, as well as Tesla's 2016 acquisition of SolarCity, have strained the balance sheet. That, along with fresh electric-car competition from rivals, means increasing urgency to actually deliver on these promises.
The stock has sold off nearly 20% from September's recent high. Tesla needs to keep its share price high, since it uses the capital markets to fund its operations. More debt doesn't seem like a practical solution--Tesla issued $1.8 billion in bonds
due in 2025 over the summer; those bonds now trade below par. And the lower the stock price, the more any new equity raise would dilute existing shareholders.
Don't underestimate the challenges Tesla faces. The company has never produced a fraction of the cars it needs to deliver, and it has never made a profit while selling far more expensive vehicles. Producing more cars won't solve the problem without quantum leaps in production efficiency.
Mr. Musk has taken this company farther than almost anyone expected. In the coming year, he will be judged on operations, not hype.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2017
Publication date: Dec 31, 2017
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1982519377
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1982519377?accountid=7117
Copyright: (c) 2017 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-18
Database: The Wall Street Journal
Tesla's Lackluster Model 3 Sales Miss Lowered Wall Street Expectations; The company again pushed backed its goal of making 5,000 Model 3s a week by another quarter
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Jan 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Corrections & Amplifications
Tesla Inc. aims to build 500,000 cars a year--about five times last year's total of just over 100,000. An earlier version of this article incorrectly stated the ratio as five times more than last year's total. (Jan. 4, 2018)
Tesla Inc. underwhelmed Wall Street with sales of its new Model 3 sedans in the fourth quarter, raising questions about whether the Silicon Valley luxury electric-car company can spark production this year and transform into a mainstream auto maker.
The company on Wednesday said it sold 1,550 Model 3s in the final three months of the year, badly missing Wall Street's already lowered expectations. Tesla again pushed backed its goal of making 5,000 Model 3s a week
by another quarter, now expected by the end of the year's first half.
The Model 3, which began production six months ago and starts at $35,000, is Tesla's first shot at producing an electric car for the masses.
Chief Executive Elon Musk has proven doubters wrong before, creating a luxury brand with a devoted following that can compete for buyers against BMW and Mercedes-Benz. But Tesla has never produced cars at a large scale; it aims to build a half-million cars a year--about five times last year's total.
The company has blamed "production bottlenecks
" for producing a fraction of its promised Model 3s in the past two quarters. Tesla said Wednesday it has made "major progress" fixing its problems and amped up its production rate toward the end of the year. In the final seven working days of December, Tesla said it made 793 Model 3s.
Soon after announcing fourth-quarter sales, Tesla's stock fell more than 2% in after-hours trading to $310.50.
Tesla's continued production struggles with the Model 3 overshadowed a milestone reached in 2017, when it sold more than 100,000 Model S sedans and Model X sport-utility vehicles for the year, a 33% increase from a year earlier.
Tesla's overall global sales growth exceeds researcher LMC Automotive's forecast of a 2.5% rise for the global automotive industry last year. Tesla is also bucking the trend in the U.S., where sales fell for the first time in eight years
, punctuated by a 5.2% decline in December.
The company's early success with the high-end Model S sedan and its ability to create a desirable luxury brand has fueled investor enthusiasm for Mr. Musk's vision of personal transportation. He is hoping to rid the world of combustion engines and fill the streets with electric cars that drive themselves.
But Tesla first has to mass-produce the Model 3.
Tesla was expected to sell 4,100 Model 3s during the fourth quarter, according to the average estimate of seven analysts surveyed by FactSet. That consensus had dropped from more than 18,000 when the analysts were surveyed in August before signs of trouble began brewing.
While Mr. Musk had warned of "manufacturing hell" in July
when the company celebrated the start of Model 3 production, he still promised to make 20,000 of the new vehicle in the month of December, a figure later pared back to as many as 5,000 a week by the end of the fourth quarter.
Tesla pushed the goal post back further in November, when it moved the 5,000-a-week goal to late in the first quarter. The company had earlier announced it made just 260 Model 3s in the third quarter
, attributing production snags to issues at its battery plant in Nevada. The Wall Street Journal also reported that parts of the company's assembly plant in Fremont, Calif., weren't ready when production began
and some of the manufacturing was being done by hand.
"As we continue to focus on quality and efficiency rather than simply pushing for the highest possible volume in the shortest period of time, we expect to have a slightly more gradual ramp through [the first quarter], likely ending the quarter at a weekly rate of about 2,500 Model 3 vehicles," Tesla said in a statement Wednesday.
Tesla said it made 2,425 of the compact sedan in the fourth quarter, and about 860 Model 3s were in transit to customers and will be counted as sold in the first period.
"Tesla would have done well to be far more realistic from the start about setting lofty production volumes, having no experience with manufacturing at high volume," said Michelle Krebs, a longtime industry analyst for Autotrader. "The company would be under less scrutiny had it set expectations lower."
Missed deadlines are nothing new for Mr. Musk, who has built enthusiasm for his company with bold statements and ambitious targets that often are missed.
In 2016, for example, Mr. Musk suggested he could make as many as 200,000 Model 3s in the second half of 2017 as Tesla ramped to 500,000 overall vehicles in 2018. But that half-million goal is looking increasingly difficult as the company tries to balance growth and spending.
The CEO has in recent weeks touted plans for a new electric semitrailer truck
, pickup truck
and sports car, as well as talking about building new factories
in Europe and China.
While Mr. Musk's boisterous talk isn't new, the stakes have grown larger
for the company, which had $22 billion in liabilities and negative cash flow at the end of the third quarter.
He is depending upon the continued success of his pricey cars, which typically sell for about $100,000, to help keep the company alive while Tesla develops the manufacturing muscles needed to produce vehicles at a rate rivaling traditional auto makers.
In that regard, the fourth quarter showed a bright spot. Deliveries of the Model S sedan and Model X sport-utility vehicle rose 28% to a total of 28,320.
That allowed Tesla to meet its goal of selling more Model Ss and Model Xs combined in the second half than the first. Model S sales rose about 20% in the quarter to 15,200, and Model X deliveries increased 38% to 13,120, pushing the company over the mark to delivering a record 102,807 vehicles, including the Model 3, in all of 2017. Last year, Tesla sold about 76,000 total vehicles.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Annual U.S. Car Sales Drop for First Time Since Financial Crisis
Credit: By Tim Higgins
Subject: Automobile industry; Automobile sales
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jan 3, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1983951154
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1983951154?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-01-04
Database: The Wall Street Journal
Tesla's Model 3 Story Is Getting Old; Automaker's second cut on production guidance since November should make investors nervous
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Jan 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla's Model 3 dreams show no signs of turning into reality.
The company announced Wednesday
it delivered 1,550 Model 3 sedans in the fourth quarter. That missed the FactSet consensus of 4,100 deliveries by a wide margin.
The news continues a long history
of company forecasts poor enough to be construed as misleading
. Analysts had projected in September that Tesla would deliver 15,900 Model 3s in the fourth quarter, and it had promised to deliver 1,500 in the third quarter.
Tesla said that it made nearly 800 Model 3 cars in the last seven business days of the fourth quarter, or a third of the quarter's production. The company said it had made "major progress" in addressing its production challenges.
Still, Tesla doesn't seem confident that progress is replicable. The company pushed back its timeline to produce 5,000 cars a week to the end of the second quarter. That's the second rollback of guidance since November.
Yet another production snag didn't bother the company's fans all that much, however. Shares fell only 2% after hours.
The bulls should reconsider. The premise of the stock's sky-high valuation has long been of Tesla eventually dominating the auto industry. That notion has hardly ever seemed more fanciful.
Tesla attributed the lowered delivery guidance "to a focus on quality and efficiency rather than simply pushing for the highest possible volume in the shortest period of time." The reality of the automobile industry is that the best companies can handle all three of these at once.
Meanwhile, Tesla's cash-burn issues show no signs of resolution, debt is mounting, and competition from rival auto makers is picking up. Tesla's business depends on raising fresh money from investors, so keeping the share price high is crucial.
CEO Elon Musk will need a new narrative soon if the company's market value, which exceeds $50 billion, is to be justified.
Faith in Mr. Musk has taken the company a long way. But eventually, financial and operational realities will carry the day.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Automobile industry; Investments
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jan 3, 2018
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1983957240
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1983957240?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-01-04
Database: The Wall Street Journal
VW, Hyundai Turn to Driverless-Car Startup in Silicon Valley; Ex-Google, Tesla executives formed Aurora Innovation to rival Waymo
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Jan 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: In the race to develop driverless cars, Volkswagen AG and Hyundai Motor Co. are placing bets on a Silicon Valley startup founded a year ago by the former leaders of autonomous vehicles at Google and Tesla.
Aurora Innovation Inc. on Thursday announced separate partnerships with the two auto makers, signaling the emergence of a potential rival to Waymo, the Google self-driving experiment that has morphed into a business unit of corporate parent Alphabet Inc.
The young Palo Alto, Calif., startup has a pedigree of driverless-car experts but is no surefire bet, with only about a year under its belt. The support of two of the largest car companies could help propel Aurora in a nascent industry that is working to upend the future of personal transportation.
Executives from both VW and Hyundai said in interviews that they aim to put Aurora's self-driving software in production vehicles by 2021.
Aurora is using a mixture of robotics and machine learning to create vision systems and driving policy programs that allow computers to pilot a car without people behind the wheel, as well as developing how those systems would work with lasers, radar and cameras to see and navigate the world.
The company is run by Chief Executive Chris Urmson, a roboticist from Carnegie Mellon University, who helped found Google's self-driving car program in 2009 and led it after Sebastian Thrun left in 2014.
Mr. Urmson was among a wave of self-driving car engineers who left
following the arrival of former Hyundai executive John Krafcik, who was hired by Alphabet in 2015 to run the project and turn it into a business. About a year ago, Mr. Urmson teamed up with Sterling Anderson and Drew Bagnell to found Aurora, which also has offices in Pittsburgh.
Mr. Anderson, a roboticist from MIT, had helped put Tesla Inc.'s semiautonomous driving system, called Autopilot, on the road while Mr. Bagnell, an associate professor at Carnegie Mellon, helped found Uber's autonomous car group in Pittsburgh.
Many analysts expect the first deployment of self-driving technology to be through mobility services, such as robot taxis. The Boston Consulting Group, for example, predicts one-quarter of miles driven in the U.S. by 2030 may be through shared, self-driving vehicles.
Waymo's autonomous vehicles appear to be in the lead after having driven more than four million miles on public roads. The company announced in November that it had begun operating in suburban Phoenix without people behind the wheels of its Chrysler minivans.
Waymo secured a deal for 600 minivans from Fiat Chrysler Automobiles NV and has been in talks with Honda Motor Co. for a little more than a year. Efforts to cut deals with other auto makers have struggled.
For Johann Jungwirth, Volkswagen Group's chief digital officer, part of Aurora's appeal was the startup team's experience and its position in the market as a company wanting to work with auto makers. "There is no overlap in competition with Aurora," he said. "You can imagine working with others in this field and immediately you have competition."
Volkswagen, which began working with Aurora about six months ago, plans to begin rolling out several test vehicles this year followed by hundreds of vehicles next year and more than a thousand in 2020. It then wants to deploy a fleet of new autonomous vehicles in 2021 in up to five cities where customers can hail and ride in the robot cars, Mr. Jungwirth said.
"We can be faster to market, and we can actually have a safer road to market by partnering," he said.
Hyundai aims to deploy self-driving vehicles on a commercial scale by 2021 with Aurora through the deployment robot taxis, said Woongjun Jang, Hyundai's director of advanced driver assistance systems.
The companies wouldn't disclose the financial details of the partnerships. Neither deals are exclusive.
The Volkswagen and Hyundai executives say that their companies are talking with Waymo about working together.
Hyundai's Mr. Jang demurred on what those talks might entail, citing confidentially agreements.
Volkwagen's Mr. Jungwirth suggested a relationship with Waymo would be different than its relationship with Aurora: The company could be, for example, selling cars to the tech giant. "Basically, for us, it would be additional business."
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Waymo's Self-Driving Milepost: Humans Take a Backseat
(Nov. 7)
* Google Plots to Conquer Self-Driving Cars--by Making Peace With Detroit
(Sep. 11)
* Google's Self-Driving Car Leader Exits
(Aug. 5, 2016)
Credit: By Tim Higgins
Subject: Robots; Market positioning; Automobile industry; Startups; Autonomous vehicles
Company / organization: Name: Google Inc; NAICS: 334310, 519130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jan 4, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1984053015
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1984053015?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-01-23
Database: The Wall Street Journal
Business News: Tesla's Model 3 Sales Fall Far Short of Goal
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Jan 2018: B.3.
ProQuest document link
Abstract: None available.
Full text: Corrections & Amplifications
Tesla Inc. aims to build a half-million cars a year -- about five times last year's total of just over 100,000. A Business News article Thursday about Tesla incorrectly gave the ratio as five times more than last year's total.
(WSJ Jan. 5, 2018)
Tesla Inc. underwhelmed Wall Street with sales of its new Model 3 sedans in the fourth quarter, raising questions about whether the Silicon Valley luxury electric-car company can spark production this year and transform itself into a mainstream auto maker.
The company on Wednesday said it sold 1,550 Model 3s in the final three months of the year, badly missing Wall Street's already lowered expectations. Tesla again pushed back its goal of making 5,000 Model 3s a week by a quarter, now targeting that rate by the end of the year's first half.
The Model 3, which began production six months ago and starts at $35,000, is Tesla's first shot at producing an electric car for the masses.
Chief Executive Elon Musk has proved doubters wrong before, creating a luxury brand with a devoted following that can compete for buyers against BMW and Mercedes-Benz. But Tesla has never produced cars on a large scale; it aims to build a half-million cars a year -- about five times more than last year's total.
The company has blamed "production bottlenecks" for producing a fraction of its promised Model 3s in the past two quarters. Tesla said Wednesday it made "major progress" fixing its problems and amped up its production rate toward the end of the year. In the final seven working days of December, Tesla said it made 793 Model 3s.
Soon after the report on fourth-quarter sales, Tesla's stock fell more than 2% in after-hours trading to $310.77.
Tesla's continued production struggles with the Model 3 overshadowed a milestone reached in 2017, when it sold more than 100,000 Model S sedans and Model X sport-utility vehicles for the year, a 33% increase from a year earlier.
Tesla's overall global sales growth exceeded researcher LMC Automotive's forecast of a 2.5% rise for the global automotive industry last year. Tesla is also bucking the trend in the U.S., where sales fell for the first time in eight years, punctuated by a 5.2% decline in December.
The company's early success with the high-end Model S sedan and its ability to create a desirable luxury brand have fueled investor enthusiasm for Mr. Musk's vision of personal transportation. He is hoping to rid the world of combustion engines and fill the streets with electric cars that drive themselves.
But Tesla first has to mass-produce the Model 3.
Tesla was expected to sell 4,100 Model 3s during the fourth quarter, according to the average estimate of seven analysts surveyed by FactSet. That consensus had dropped from more than 18,000 when the analysts were surveyed in August before signs of trouble began brewing.
While Mr. Musk had warned of "manufacturing hell" in July when the company celebrated the start of Model 3 production, he still promised to make 20,000 of the new vehicles in the month of December, a figure later pared back to reaching a rate of 5,000 a week by the end of the fourth quarter.
Credit: By Tim Higgins
Subject: Automobile industry; Automobile sales; Electric vehicles
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2018
Publication date: Jan 4, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1984331725
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1984331725?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-01-05
Database: The Wall Street Journal
VW, Hyundai Turn to Driverless-Car Startup in Silicon Valley; Ex-Google, Tesla executives formed Aurora Innovation to rival Waymo
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Jan 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: In the race to develop driverless cars, Volkswagen AG and Hyundai Motor Co. are placing bets on a Silicon Valley startup founded a year ago by the former leaders of autonomous vehicles at Google and Tesla.
Aurora Innovation Inc. on Thursday announced separate partnerships with the two auto makers, signaling the emergence of a potential rival to Waymo, the Google self-driving experiment that has morphed into a business unit of corporate parent Alphabet Inc.
The young Palo Alto, Calif., startup has a pedigree of driverless-car experts but is no surefire bet, with only about a year under its belt. The support of two of the largest car companies could help propel Aurora in a nascent industry that is working to upend the future of personal transportation.
Executives from both VW and Hyundai said in interviews that they aim to put Aurora's self-driving software in production vehicles by 2021.
Aurora is using a mixture of robotics and machine learning to create vision systems and driving policy programs that allow computers to pilot a car without people behind the wheel, as well as developing how those systems would work with lasers, radar and cameras to see and navigate the world.
The company is run by Chief Executive Chris Urmson, a roboticist from Carnegie Mellon University, who helped found Google's self-driving car program in 2009 and led it after Sebastian Thrun left in 2014.
Mr. Urmson was among a wave of self-driving car engineers who left
following the arrival of former Hyundai executive John Krafcik, who was hired by Alphabet in 2015 to run the project and turn it into a business. About a year ago, Mr. Urmson teamed up with Sterling Anderson and Drew Bagnell to found Aurora, which also has offices in Pittsburgh.
Mr. Anderson, a roboticist from MIT, had helped put Tesla Inc.'s semiautonomous driving system, called Autopilot, on the road while Mr. Bagnell, an associate professor at Carnegie Mellon, helped found Uber's autonomous car group in Pittsburgh.
Many analysts expect the first deployment of self-driving technology to be through mobility services, such as robot taxis. The Boston Consulting Group, for example, predicts one-quarter of miles driven in the U.S. by 2030 may be through shared, self-driving vehicles.
Waymo's autonomous vehicles appear to be in the lead after having driven more than four million miles on public roads. The company announced in November that it had begun operating in suburban Phoenix without people behind the wheels of its Chrysler minivans.
Waymo secured a deal for 600 minivans from Fiat Chrysler Automobiles NV and has been in talks with Honda Motor Co. for a little more than a year. Efforts to cut deals with other auto makers have struggled.
For Johann Jungwirth, Volkswagen Group's chief digital officer, part of Aurora's appeal was the startup team's experience and its position in the market as a company wanting to work with auto makers. "There is no overlap in competition with Aurora," he said. "You can imagine working with others in this field and immediately you have competition."
Volkswagen, which began working with Aurora about six months ago, plans to begin rolling out several test vehicles this year followed by hundreds of vehicles next year and more than a thousand in 2020. It then wants to deploy a fleet of new autonomous vehicles in 2021 in up to five cities where customers can hail and ride in the robot cars, Mr. Jungwirth said.
"We can be faster to market, and we can actually have a safer road to market by partnering," he said.
Hyundai aims to deploy self-driving vehicles on a commercial scale by 2021 with Aurora through the deployment robot taxis, said Woongjun Jang, Hyundai's director of advanced driver assistance systems.
The companies wouldn't disclose the financial details of the partnerships. Neither deals are exclusive.
The Volkswagen and Hyundai executives say that their companies are talking with Waymo about working together.
Hyundai's Mr. Jang demurred on what those talks might entail, citing confidentially agreements.
Volkwagen's Mr. Jungwirth suggested a relationship with Waymo would be different than its relationship with Aurora: The company could be, for example, selling cars to the tech giant. "Basically, for us, it would be additional business."
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Waymo's Self-Driving Milepost: Humans Take a Backseat
(Nov. 7)
* Google Plots to Conquer Self-Driving Cars--by Making Peace With Detroit
(Sep. 11)
* Google's Self-Driving Car Leader Exits
(Aug. 5, 2016)
Credit: By Tim Higgins
Subject: Robots; Market positioning; Automobile industry; Startups; Autonomous vehicles
Company / organization: Name: Google Inc; NAICS: 334310, 519130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jan 5, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1984610790
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1984610790?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-01-23
Database: The Wall Street Journal
Tesla Gives Musk New Long-Term Pay Deal Tied to Big Targets; The 10-year compensation plan ultimately aims for Tesla market cap of $650 billion
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Jan 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. said it updated the pay package for Chief Executive Elon Musk with a plan that again ties his compensation entirely to key performance benchmarks--albeit this time much larger ones, including an ultimate goal to hit $650 billion in market value.
The pay plan, which shareholders must still approve, is designed to keep Mr. Musk as Tesla's top leader for years to come--although allows for the prospect that he might evolve away from the day-to-day role of CEO into one of executive chairman and chief product officer.
The plan, which is modeled on an earlier program set for Mr. Musk in 2012, entails a 10-year grant of stock options that would vest in 12 tranches. Each would vest only if a set of two milestones are achieved, one based on market value, the other on a measure of revenue or profit. For each tranche achieved, Mr. Musk would receive shares equal to 1% of the company's total shares outstanding as of Jan. 21, 2018.
For example, the first tranche would vest if Tesla hits $100 billion in market value and $20 billion in revenue or $1.5 billion in earnings before interest, taxes, depreciation and amortization, after adjusting for stock compensation. For all 12 tranches to vest, Tesla's market value would have to reach $650 billion.
Tesla, which reported revenue of $7 billion for 2016, had a market value of about $58.8 billion as of Monday's close. Mr. Musk owns about 20% of the company, according to S&P Global Market Intelligence.
"This ensures that Elon will continue to lead Tesla's management over the long-term while also providing the flexibility to bring in another CEO who would report to Elon at some point in the future," Tesla said in a statement about the plan released around 12:30 a.m. on Tuesday in California. "Although there is no current intention for this to happen, it provides the flexibility as Tesla continues to grow to potentially allow Elon to focus more of his attention on the kinds of key product and strategic matters that most impact Tesla's long-term growth and profitability."
Tesla said that if none of the tranches are achieved, Mr. Musk wouldn't receive any compensation. That would put him in similar territory to some other prominent Silicon Valley leaders who own enormously valuable stakes in their companies but receive little or no salary.
Mr. Musk's previous compensation program
, granted in 2012, targeted a market value of $43.2 billion along with meeting certain milestones by 2022. It required him to remain as CEO.
Since Tesla overtook Ford Motor Co.'s market value last year, and flirted with that of General Motors Co., the Silicon Valley auto maker's valuation has been a continual point of conversation. Critics question why investors are betting so much on a company that has yet to turn an annual profit and that has delivered a fraction of the sales of much larger competitors.
Fans say they are betting on Mr. Musk's vision for personal transportation that includes electric cars that drive themselves and are powered off the company's solar panels and charged from its storage batteries.
Investor enthusiasm fueled Tesla's growth last year, even as Mr. Musk struggled to ramp up production of the Model 3 sedan, which is testing his ability to evolve the company into a more mainstream auto maker from one of a luxury niche player.
Mr. Musk has previously outlined a way for the company to reach a market cap of $700 billion, something he reiterated last year.
"I could be completely delusional but I think I see a clear path to that outcome," he told analysts in May.
Mr. Musk, who also heads other companies including Space Exploration Technologies Corp., or SpaceX, has hinted that he might want to change his role at Tesla.
In May, an analyst asked Mr. Musk if he still intended to step away from Tesla after bringing out the Model 3, as he had previously suggested.
"I intend to be actively involved with Tesla for the rest of my life," Mr. Musk said. "Hopefully, stopping before I get too old--or too crazy, I don't know. But that doesn't mean I should be CEO forever." He suggested a role contributing in "product design and technology."
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Corporate profits; Wages & salaries; Compensation plans
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jan 23, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1989857573
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1989857573?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-01-23
Database: The Wall Street Journal
Elon Musk Could Net Billions by Hitting Tesla's New Milestones; Pay plan offered to CEO aims to keep him atop car maker for years to come
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Jan 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. on Tuesday unleashed a bold pay package for Chief Executive Elon Musk that again ties his compensation entirely to key performance benchmarks. This time, the goals take the electric-car maker to cosmic heights, including an ultimate aim of hitting $650 billion in market value.
The pay plan, which shareholders must still approve, is designed to keep the 46-year-old billionaire as Tesla's top leader for years to come while also allowing for the possibility he will transition eventually from the day-to-day role of CEO into one of executive chairman and chief product officer.
The plan, which is modeled on the program set for Mr. Musk in 2012, entails a 10-year grant of stock options that would vest in 12 tranches, each with shares equal to 1% of the company's total shares outstanding as of Jan. 21, 2018. A tranche would vest only if a pair of milestones are achieved, one based on market value, the other on a measure of revenue or profit.
For example, the first tranche would vest if Tesla hits $100 billion in market value and either $20 billion in revenue or $1.5 billion in earnings before interest, taxes, depreciation and amortization, after adjusting for stock compensation. For all 12 tranches to vest, Tesla's market value would have to reach $650 billion.
Tesla, which reported revenue of $7 billion for 2016, had a market value of about $58.8 billion as of Monday's close. Mr. Musk owns about 20% of the company, according to S&P Global Market Intelligence.
Mr. Musk could net billions of dollars by hitting only a few of the milestones. Tesla said in a proxy filing the 20.26 million stock options today would have a preliminary value of about $2.62 billion. But if Tesla were to reach the audacious market value of $650 billion--as much as Amazon.com Inc. is worth today--the company said Mr. Musk's stock award would reap him as much as $55.8 billion fully vested.
That total, however, assumes the company's shares outstanding won't be diluted. Tesla has added tens of millions of shares over the past several years, so that total dollar figure is unlikely.
"This ensures that Elon will continue to lead Tesla's management over the long-term while also providing the flexibility to bring in another CEO who would report to Elon at some point in the future," Tesla said in a statement about the plan on Tuesday. "Although there is no current intention for this to happen, it provides the flexibility as Tesla continues to grow to potentially allow Elon to focus more of his attention on the kinds of key product and strategic matters that most impact Tesla's long-term growth and profitability."
Tesla said that if none of the tranches are achieved, Mr. Musk wouldn't receive any compensation. That would put him in circumstances similar to those of some other prominent Silicon Valley leaders who own enormously valuable stakes in their companies but receive little or no salary.
Mr. Musk is saying, "I want to set an audacious goal, and then if I achieve it, then pay me audaciously," said John Challenger, a longtime expert in corporate compensation as chief executive of Challenger, Gray & Christmas. "He is in some ways capturing the spirit of Silicon Valley."
Mr. Musk's previous compensation program
, granted in 2012, targeted a market value of $43.2 billion along with meeting certain milestones by 2022. It required him to remain CEO.
Adam Jonas, an analyst for Morgan Stanley, said the pay package is a "marketing tool" to attract talent and raise more money as the company faces greater competition in making electric and self-driving vehicles. "We view this incentive package as more important to investor confidence than to Musk financially," Mr. Jonas wrote in a note to investors.
Since Tesla overtook Ford Motor Co.'s market value last year, and flirted with that of General Motors Co., the Silicon Valley auto maker's valuation has been a continual point of conversation. Critics question why investors are betting so much on a company that has yet to turn an annual profit and that has delivered a fraction of the sales of much larger auto makers.
Fans say they are betting on Mr. Musk's vision for personal transportation that includes electric cars that drive themselves and draw their power from Tesla's solar panels and storage batteries.
Such enthusiasm fueled Tesla's growth last year, even as Mr. Musk struggled to ramp up production of the Model 3 sedan in a test of his ability to transform a luxury niche player into a more mainstream auto maker.
Mr. Musk had previously committed the company to reaching a market cap of $700 billion, something he reiterated last year. "I could be completely delusional, but I think I see a clear path to that outcome," he told analysts in May.
Mr. Musk, who also heads other companies including Space Exploration Technologies Corp., or SpaceX, has hinted that he might want to change his role at Tesla.
In May, an analyst asked Mr. Musk if he planned to step away from Tesla after bringing out the Model 3, as he had previously suggested.
"I intend to be actively involved with Tesla for the rest of my life," Mr. Musk said. "Hopefully, stopping before I get too old--or too crazy, I don't know. But that doesn't mean I should be CEO forever." He suggested a role contributing in "product design and technology."
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Corporate profits; Investments; Compensation; Stock options; Wages & salaries
Location: Silicon Valley-California
People: Musk, Elon
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Amazon.com Inc; NAICS: 334310, 454111, 518210; Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jan 23, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1990022100
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1 990022100?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-01-24
Database: The Wall Street Journal
Tesla Primes Musk's Pay for Blastoff
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 Jan 2018: B.2.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. on Tuesday unleashed a bold pay package for Chief Executive Elon Musk that again ties his compensation entirely to performance benchmarks but with much grander goals, including a $650 billion market value for the electric-car maker within 10 years.
The pay plan, which shareholders must still approve, is designed to keep the 46-year-old billionaire as Tesla's top leader for years to come while also allowing for the possibility he will transition eventually from the day-to-day role of CEO into one of executive chairman and chief product officer.
The plan, which is modeled on the program set for Mr. Musk in 2012, entails a 10-year grant of stock options that would vest in 12 tranches, each with shares equal to 1% of the company's total shares outstanding as of Jan. 21, 2018. A tranche would vest only if a pair of milestones are achieved, one based on market value, the other on a measure of revenue or profit.
For example, the first tranche would vest if Tesla hits $100 billion in market value and either $20 billion in revenue or $1.5 billion in earnings before interest, taxes, depreciation and amortization, after adjusting for stock compensation. For the final tranche to vest, Tesla's market value would have to reach $650 billion.
Tesla, which reported revenue of $7 billion for 2016, had a market value of about $59 billion as of Tuesday's close. Mr. Musk owns about 20% of the company, according to S&P Global Market Intelligence.
Mr. Musk could net billions of dollars even if he achieves just a few of the milestones. But if Tesla were to reach the audacious market value of $650 billion -- as much as Amazon.com Inc. is worth today -- the company said Mr. Musk's stock award would reap him as much as $55.8 billion fully vested. That maximum assumes the company's shares outstanding won't be diluted.
"This ensures that Elon will continue to lead Tesla's management over the long-term while also providing the flexibility to bring in another CEO who would report to Elon at some point in the future," Tesla said in a statement about the plan on Tuesday.
Tesla said that if none of the tranches are achieved, Mr. Musk wouldn't receive any compensation. That would put him in circumstances similar to those of some other prominent Silicon Valley leaders who own enormously valuable stakes in their companies but receive little or no salary.
Mr. Musk is saying, "I want to set an audacious goal, and then if I achieve it, then pay me audaciously," said John Challenger, a longtime expert in corporate compensation as chief executive of Challenger, Gray & Christmas. "He is in some ways capturing the spirit of Silicon Valley."
Mr. Musk's previous compensation program, granted in 2012, targeted a market value of $43.2 billion by 2022.
Since Tesla overtook Ford Motor Co.'s market value last year, and flirted with that of General Motors Co., the Silicon Valley auto maker's valuation has been a continual point of conversation. Critics question why investors are betting so much on a company that has yet to turn an annual profit and that has delivered a fraction of the sales of much larger auto makers.
Mr. Musk had previously committed the company to reaching a market cap of $700 billion, something he reiterated last year. "I could be completely delusional, but I think I see a clear path to that outcome," he told analysts in May.
Credit: By Tim Higgins
Subject: Automobile industry; Compensation; Wages & salaries
Location: Silicon Valley-California
People: Musk, Elon
Company / organization: Name: Amazon.com Inc; NAICS: 334310, 454111, 518210; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2018
Publication date: Jan 24, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1990296849
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1990296849?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-01-24
Database: The Wall Street Journal
A Futuristic Home Inspired by France; The seller will accept Bitcoin for this San Francisco property, which includes Tesla charging stations, a retractable roof and Paris-inspired décor--Sarah Tilton
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Jan 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Rick Teed was living next door to this home in San Francisco's Russian Hill neighborhood when it came on the market. He immediately saw the potential in the large lot and the two-unit building. 'I thought this was the Chelsea of San Francisco and I felt this neighborhood was on the move,' he says.
Mr. Teed paid $1.886 million in 2014 for what was an approximately 2,800-square-foot building. He then spent 2½ years and $8 million turning it into an 8,000-square-foot home with a penthouse unit that can be used as part of the main house or as a separate unit, he says. In the kitchen he chose a La Cornue stove. Murano glass pendants hang over the 16-foot island.
'I'm fascinated with the design aesthetic that I see in the south of France and old Paris hotels,' says Mr. Teed. He chose the yellow and white awning in the garden based on one he saw at a cafe on the Île Saint-Louis in Paris.
'I like clean, modern, open floor plans and high ceilings,' says Mr. Teed, a real estate agent. The home has 10-foot ceilings. He chose French white oak floors 'that have been grayed out' throughout the home.
By digging out the rear of the property he created a larger first floor and, above it, this outdoor area. The walkable skylights let in natural light to the floor below. Local iron smiths made the steel frame cover for the staircase which goes to the entry level and which Mr. Teed designed to look like a Parisian bus stop, he says.
The same iron workers made the steel-frame walls for the wine room. 'If you were in an old factory you'd see the putty and the steel frames,' says Mr. Teed.
Olivier Garnier of Color Atelier Paint and Plaster in San Francisco made the plaster wall in the dining room. He also hand-mixed the zero-VOC lime-based paints used throughout the house. Mr. Garnier uses lime from a quarry in France to make his paints and plaster, he says.
The home has five bedrooms and 5½ baths. The master bedroom on the third floor has a private balcony.
Mr. Teed used steel frame walls in the master bath. The door has double hinges so it opens in both directions.
The fourth floor has a second master suite as well as a sitting area that opens onto a deck. An elevator goes to all five levels including the roof deck. The main stairs also go to the roof deck via a retractable glass Rollamatic roof that measures approximately 15 by 15 feet.
The home sits across from historic Ghirardelli Square. It is walking distance to Aquatic Park Cove and the waterfront.
'Everywhere your eye goes you should say, "Oh...," or I have failed,' says Mr. Teed. The fourth-floor sitting area includes a bar with a sink and wine cooler. 'If you're not wowed where you look then I have to work on that spot,' he says.
Mr. Teed, age 57, is selling as he recently got engaged and is moving to Marin, Calif. Shown here is the outdoor staircase to the entry level.
The first level includes a gym and a game area. The gym equipment and the games come with the house.
Two heated electric spa beds and the Buddha head are also included, says Mr. Teed. There is a full bath with a steam room nearby.
The first level also has a media area with tiered seating. 'It's the most soundproof place in the house,' he says.
The garage includes two Tesla charging stations and a car-washing station. There are two Tesla Powerwalls, each of which can power the house for 24 hours in case of an outage.
The home has an asking price of $12.995 million. The seller will accept Bitcoin. Butch Haze of Compass Real Estate has the listing.
Subject: Digital currencies
Location: France San Francisco California
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jan 25, 2018
Section: Real Estate
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1990940486
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1990940486?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-01-25
Database: The Wall Street Journal
Want the Scoop on Tesla's Model 3? That Will Cost You $500,000; Production bottlenecks have created a frenzy for information about the cars, with some auto makers willing to make hefty payments for data and designs
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Jan 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Corrections & Amplifications
Bidding for a Tesla Inc. Model 3 car put up for auction on eBay by its owner rose to $57,100, but the reserve price set by the seller wasn't met. The owner said he later sold it through a private sale for more than the highest eBay bid. An earlier version of this article incorrectly said the Model 3 sold for $57,100 on eBay. (Jan. 30, 2018)
DETROIT--Tesla Inc. was absent at the annual auto show here this month, but its new Model 3 sedan was still a hot ticket.
Tucked away in the convention hall's basement, far from the new Chevrolet Silverado pickup and Toyota Avalon sedan displayed on the main floor, Caresoft Global Inc., an engineering firm based in the Chicago area, showed off a Model 3 chassis.
It is one of several sedans Caresoft has purchased from third parties since November, with the goal of studying them and selling data and technical insights to Tesla competitors--for upward of $500,000.
"There are people who flew down from China just to have a test drive with us," said Caresoft business manager Prideep Subramaniam.
A shortage of Model 3 sedans has created a frenzy among curious competitors, Tesla enthusiasts and auto reviewers to get their hands on the electric car, which starts at $35,000. Tesla was supposed to be making over 5,000 Model 3s a week by now--instead it delivered fewer than a total of 2,000 the past two quarters
.
The production bottlenecks mean few people beyond employees, family members and company insiders have seen the Model 3 in person. The cars only recently arrived to a few Tesla showrooms, drawing big crowds. Tesla, which declined to comment for this article, has received about a half-million reservations for the Model 3, but the wait for a car is projected at 12 to 18 months if ordered now.
Investors and competitors are devouring any morsel of information. Tesla shares shot up more than 6% earlier this month after automotive website The Drive published a lengthy Model 3 review.
Writer Alex Roy took the sedan on a cross-country trip with its owner, writing a generally positive review and calling the Model 3 "the most important car since the Ford Model T." The owner, however, tried to sell the car on eBay, saying it was too small for his family of five. Bidding went up to $57,100, but the reserve price set by the seller wasn't met. The owner said he later sold it through a private sale to a European buyer for more than the highest eBay bid.
USA Today rented a Model 3 it found listed on online marketplace Turo, concluding
: "A day spent with a Model 3 leaves one itching for one more day."
Caresoft said it has been buying up Model 3s from early buyers, paying about $100,000 a vehicle. The firm takes CT scans to create digital designs for companies that plan to run through virtual simulations to understand the Model 3's design.
This month Caresoft brought one to the CES trade show in Las Vegas and again to the Detroit auto show, where Caresoft's booth was busy during special days held for automotive-industry attendees.
Around the red Model 3 skeleton, a Ford Motor Co. employee was measuring the windows, while men with European accents were crawling underneath for a closer view.
"Everybody is dying to actually see one and experience one," Mike VanNieuwkuyk, a senior vice president at research firm Ipsos, said after checking out the booth.
Car teardowns are nothing new. In 2016, Ford attracted attention when Tesla's Model X sport-utility vehicle appeared in the Detroit area with license plates belonging to the "Blue Oval." Bloomberg News reported then that Ford paid almost $200,000 for an early version of the SUV.
In May, UBS released a teardown of General Motors Co.'s all-electric Chevrolet Bolt, a competitor to the Model 3. The report estimated GM was losing $7,400 on each vehicle sold, largely because of a lack of scale. From this, UBS estimated that Tesla would lose $2,800 on the base version of the Model 3 and might break even on versions that sell for $41,000 or more.
For clients, Caresoft quietly offered test drives around downtown Detroit in a black Model 3. After a day of meetings with auto executives, Caresoft Chief Executive Mathew Vachaparampil recapped at a hotel bar in Detroit the reception he received from leaders trying to figure out the magic behind the Model 3. He said 10 auto makers are customers.
"They're very excited" for the data, he said. "I can get a meeting with any [car] CEO on earth."
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Engineering firms; Automobile industry
Location: China Chicago Illinois United States--US Las Vegas Nevada Detroit Michigan
Company / organization: Name: USA Today; NAICS: 511110; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jan 30, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1992259943
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1992259943?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-07
Database: The Wall Street Journal
Business News: Tesla Rivals Pay For Model 3 Data
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]31 Jan 2018: B.9.
ProQuest document link
Abstract: None available.
Full text: DETROIT -- Tesla Inc. was absent at the annual auto show here this month, but its new Model 3 sedan was still a hot ticket.
Tucked away in the convention hall's basement, far from the new Chevrolet Silverado pickup and Toyota Avalon sedan displayed on the main floor, Caresoft Global Inc., an engineering firm based in the Chicago area, showed off a Model 3 chassis.
It is one of several sedans Caresoft has purchased from third parties since November, with the goal of studying them and selling data and technical insights to Tesla competitors -- for upward of $500,000.
"There are people who flew down from China just to have a test drive with us," said Caresoft business manager Prideep Subramaniam.
A shortage of Model 3 sedans has created a frenzy among curious competitors, Tesla enthusiasts and auto reviewers to get their hands on the electric car, which starts at $35,000. Tesla was supposed to be making more than 5,000 Model 3s a week by now -- instead it delivered fewer than a total of 2,000 the past two quarters.
The cars only recently arrived to a few Tesla showrooms, drawing big crowds. Tesla, which declined to comment for this article, has received about a half-million reservations for the Model 3, but the wait for a car is projected at 12 to 18 months if it is ordered now.
Investors and competitors are devouring any morsel of information. Tesla shares shot up more than 6% earlier this month after automotive website The Drive published a lengthy Model 3 review.
Caresoft said it has been buying Model 3s from early buyers, paying about $100,000 a vehicle. The firm takes CT scans to create digital designs for companies that plan to run virtual simulations to understand the Model 3's design.
This month Caresoft brought one to the CES trade show in Las Vegas and again to the Detroit auto show
Around the red Model 3 skeleton in Detroit, a Ford Motor Co. employee measured the windows, while men with European accents crawled underneath for a closer view. "Everybody is dying to actually see one and experience one," said Mike VanNieuwkuyk, a senior vice president at research firm Ipsos.
Car teardowns are nothing new. In May, UBS released a teardown of General Motors Co.'s all-electric Chevrolet Bolt, a competitor to the Model 3. The report estimated GM was losing $7,400 on each vehicle sold, largely because of a lack of scale. From this, UBS estimated that Tesla would lose $2,800 on the base version of the Model 3 and might break even on versions that sell for $41,000 or more.
For clients, Caresoft quietly offered test drives around Detroit in a black Model 3. After meetings with auto executives, Caresoft Chief Executive Mathew Vachaparampil said 10 auto makers are customers.
"They're very excited" for the data, he said.
Credit: By Tim Higgins
Subject: Automobile shows; Engineering firms; Automobile industry; Competition
Location: China Chicago Illinois Las Vegas Nevada Detroit Michigan
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.9
Publication year: 2018
Publication date: Jan 31, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1992556169
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1992556169?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-01-31
Database: The Wall Street Journal
Tesla Raises $546 Million in Its First Asset-Backed Securities Deal; The electric car company, backing its bonds with lease payments, is raising cash in various ways as it ramps up production of its first mass-market car
Author: Goldfarb, Sam; Eisen, Ben
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Feb 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla
Inc. sold $546 million of bonds backed by lease payments on Model X and Model S vehicles on Thursday, the latest sign of how yield-hungry investors continue to soak up corporate debt of all flavors.
The electric-car company's inaugural visit to the asset-backed-securities market came roughly six months after it sold traditional corporate bonds for the first time. Once again, Tesla found eager buyers, allowing it cut interest rates on the multi-part deal from the levels initially floated to investors.
Buyers are betting on continued strength in the auto leasing business, where securitization has picked up in recent years. Bondholders are repaid from lease payments on the Tesla vehicles, as well as the resale value of the cars once those leases are up.
While that insulates investors from some of the challenges facing Tesla at the moment, it still exposes them to the risk those cars can't be resold for as much as expected, analysts say. Battery-powered vehicles don't have as long a track record for resale value as traditional vehicles whose leases are commonly securitized. Investors could take losses if resale values are substantially below expectations or if the economy turns south, causing a selloff across asset classes.
But with rates still low by historical standards and the economy humming along at the moment, investors continue to dig into esoteric corners of the bond market.
Tesla's largest tranche sold Thursday, a $422.6 million slice of debt assigned the highest possible credit rating by Moody's Investors Service, came with a 0.3 percentage point yield premium, or spread, above the benchmark swap rate, down from earlier guidance of around 0.4-0.43 percentage point. The lowest-rated slice sold at a 2.65 percentage points yield premium, down from around 2.8-2.9 percentage points.
Asset-backed securities are typically divided into tranches that are ordered based on which have the best chance of full repayment. The highest-rated tranches are the safest but have the lowest yields, while the higher-risk tranches offer higher yields.
Citigroup Inc. and Deutsche Bank AG were lead underwriters on the deal.
Glenn Bowling, head of ABS credit at Invesco Ltd., said the higher-rated bonds of the new Tesla deal were enticing enough for him to buy, in part because they offered higher yields compared to other auto lease offerings and are backed by leases that have shorter remaining contract terms.
"Spreads are tight in the ABS market," and the yields in this case were "relatively attractive," he said.
Tesla remains a darling of the stock market and an increasingly accepted presence in the debt markets, despite burning billions of dollars of cash over the past four quarters and repeatedly missing financial forecasts. The company is coming off its worst financial quarter ever in the three months that ended Sept. 30, when it posted a loss of $619 million attributed to common shareholders. Its results for the final three months of the year are due out next week.
Some see the Palo Alto, Calif., company as the future of the auto industry, given its leading position in the electric car market and investment in driverless car technology.
But production delays in Tesla's mass-market Model 3 sedan have hurt demand for the company's outstanding bonds. The 5.3% notes due 2025 that it issued at par in August traded at 95.125 cents on the dollar Thursday, according to MarketAxess.
The 1.25% convertible bonds it sold in 2014 are faring better, having last traded at 114.9 cents on the dollar.
Tesla said in November that it plans $1 billion in capital expenditures during the fourth quarter after spending $1.1 billion in the third quarter. The company has about $1.4 billion in debt due by the end of 2018 and has talked about plans for new factories in Europe and China.
Write to Sam Goldfarb at sam.goldfarb@wsj.com and Ben Eisen at ben.eisen@wsj.com
Credit: By Sam Goldfarb and Ben Eisen
Subject: Investments; Bond issues; International finance; Securitization
Location: China Palo Alto California Europe
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Citigroup Inc; NAICS: 551111; Name: Invesco Ltd; NAICS: 523120; Name: Tesla Inc; NAICS: 336999; Name: Deutsche Bank AG; NAICS: 522110, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Feb 1, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1993086023
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1993086023?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-02-02
Database: The Wall Street Journal
Tesla Finds Strong Demand for Sale of $546 Million in Debt
Author: Goldfarb, Sam; Eisen, Ben
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Feb 2018: B.2.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. sold $546 million of bonds backed by lease payments on Model X and Model S vehicles on Thursday, the latest sign of how yield-hungry investors continue to soak up corporate debt of all flavors.
The electric-car company's inaugural visit to the asset-backed-securities market came roughly six months after it sold traditional corporate bonds for the first time. Once again, Tesla found eager buyers, allowing it cut interest rates on the multi-part deal from the levels initially floated to investors.
Buyers are betting on continued strength in the auto leasing business, where securitization has picked up in recent years. Bondholders are repaid from lease payments on the Tesla vehicles, as well as the resale value of the cars once those leases are up.
While that insulates investors from some of the challenges facing Tesla at the moment, it still exposes them to the risk those cars can't be resold for as much as expected, analysts say. Battery-powered vehicles don't have as long a track record for resale value as traditional vehicles whose leases are commonly securitized. Investors could take losses if resale values are substantially below expectations or if the economy turns south, causing a selloff across asset classes.
But with rates still low by historical standards and the economy humming along at the moment, investors continue to dig into esoteric corners of the bond market.
Tesla's largest tranche sold Thursday, a $422.6 million slice of debt assigned the highest possible credit rating by Moody's Investors Service, came with a 0.3 percentage point yield premium, or spread, above the benchmark swap rate, down from earlier guidance of around 0.4-0.43 percentage point. The lowest-rated slice sold at a 2.65 percentage points yield premium, down from around 2.8-2.9 percentage points.
Citigroup Inc. and Deutsche Bank AG were lead underwriters on the deal.
Credit: By Sam Goldfarb and Ben Eisen
Subject: Bond issues; International finance; Resale value; Corporate debt
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Citigroup Inc; NAICS: 551111; Name: Tesla Inc; NAICS: 336999; Name: Deutsche Bank AG; NAICS: 522110, 551111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2018
Publication date: Feb 2, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1993296166
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1993296166?accountid=7117
Copyright: (c) 20 18 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-02-02
Database: The Wall Street Journal
Tesla Earnings: What to Watch; Tesla's growth strategy and spending plans will take center stage when the car maker reports results
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Feb 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. is expected to release fourth-quarter financial results after the market closes Wednesday. Here's what you need to know:
EARNINGS FORECAST: Tesla is expected to post an adjusted loss of $3.15 a share, according to analysts surveyed by FactSet, compared with an adjusted 69 cent-a-share loss a year earlier. Adjusted results exclude stock-based and acquisition costs, and other items.
REVENUE FORECAST: Revenue is expected to rise to $3.29 billion, according to FactSet, from $2.28 billion a year earlier. Tesla has said deliveries of the Model X sport-utility vehicle, Model S sedan and new Model 3 sedan totaled 29,870 during the quarter, up 35% from a year ago. The company delivered 1,550 units of the Model 3, which began production in July.
WHAT TO WATCH:
PRODUCTION HELL: "We believe an update on the Model 3 production ramp will be the first question on many investors' minds," James Albertine, an analyst for Consumer Edge Research, said in a note to investors. Investors have watched Tesla fall months behind
in its production goals after running into bottlenecks at its Fremont, Calif., assembly factory and Nevada battery plant. Chief Executive Elon Musk once had predicted reaching a rate of production of 5,000 Model 3 vehicles a week by the end of the last year's fourth quarter--a prediction that had already fallen from 20,000 in December and, at one point, as many as 200,000 in the second half of 2017. Tesla ended up making 2,425 Model 3s in the fourth quarter, the company reported in January as it pushed back the goal of reaching 5,000 a week until the end of June.
CASH BURN: Mr. Musk has long said the ramp-up
of the Model 3, a sedan with a $35,000 price tag aimed at making Tesla vehicles more accessible, would generate the cash needed to fund the company's expansion. The sedan's delays put that vision at risk. Tesla began the final three months of 2017 with $3.5 billion on hand and planned to spend $1 billion during the period on capital expenditures. Earlier this month, the company raised about $550 million from bonds. Tesla executives have said they need a minimum of $1 billion each quarter for working capital. Colin Langan, an analyst for UBS, estimates Tesla can generate about $1 billion in working capital once it produces 5,000 Model 3s a week. Even so, he and others expect Tesla will need to raise additional money.
WHAT'S NEXT: In recent months, Mr. Musk has generated attention
talking about plans for new vehicles--a two-door Roadster sports car, commercial truck and compact SUV--as well as new factories in Europe and China. All would cost billions of dollars. In November, he and Chief Financial Officer Deepak Ahuja hinted at internal discussions about whether Tesla needed to back away from some of its growth plans
to rein in spending. Investors are anxious for clarity about the evolving strategy. Excitement over the new products may already be helping Mr. Musk's cash situation. Deposits in the fourth quarter for the new commercial truck and the sports car, as well as a sell-down in Model S and Model X inventory, may have boosted Tesla's working capital by $700 million, according to Mr. Langan's estimates.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Investments; Factories; Working capital; Capital expenditures; Vehicles
Location: China Nevada Europe
People: Musk, Elon
Company / organization: Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Feb 7, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1994833927
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1994833927?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-02-07
Database: The Wall Street Journal
Tesla Says It Is Making Progress on Model 3 Production Issues; Electric car maker's loss widens to $675 million as it projects a sustained operating profit sometime in 2018
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Feb 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. on Wednesday signaled it is making progress in overcoming its early production troubles building the Model 3 sedan, telling shareholders it expects to generate its first sustained operating profit sometime this year.
The Silicon Valley auto maker said in its quarterly financial report that is on track to reach a milestone of making 5,000 Model 3 sedans a week by the end of the second quarter--a twice postponed goal--and that it is addressing bottlenecks that have derailed production
.
The optimistic tone is a reversal from last quarter's report, when Tesla warned of monthslong delays in the production of the Model 3 and raised the possibility the company could pump the brakes on planned growth. Tesla on Wednesday reported yet another record loss--$675 million attributable to common shareholders--but unlike three months ago, the loss on an adjusted basis was narrower than what analysts were expecting.
This year "will be a transformative year for Tesla, with a high level of operational scaling," Chief Executive Elon Musk wrote Wednesday in a letter to shareholders. "As we ramp production of both Model 3 and our energy products while keeping tight control of operating expenses, our quarterly operating income should turn sustainably positive at some point in 2018."
Tesla also improved its cash flow during the quarter--burning just $277 million in free cash--crediting a delay in investments for the Model 3, a sell-down of inventories of Model S sedans and Model X sport-utility vehicles and a 24% increase in customer deposits from three months earlier. While the company doesn't break out which products collected those reservations during the quarter, Tesla revealed a new semitrailer truck and a high-end sports car that will cost as much as $250,000.
In after-hours trading on Wednesday, Tesla's shares fluctuated around the $345 closing price, after rising 3.3% during regular hours.
Amid the buoyant predictions, Tesla cautioned shareholders that the company has encountered "difficulty of accurately forecasting specific production rates at specific points in time." The company often misses its targets, as it did with the Model 3 in the fourth quarter, when it sold only about 1,550 of the sedans
, and fell short of hitting the 5,000-a-week goal by the end of the year.
Deliveries of the Model S sedan and Model X sport-utility vehicle helped boost unit sales by 35% during the fourth quarter from a year earlier. Tesla sold a record 102,807 vehicles last year mainly on the back of those two pricey cars, which typically sell for about $100,000.
But investor attention is focused heavily on the Model 3, which starts at $35,000 and is a key pillar of Mr. Musk's strategy to remake the luxury auto maker as a more mainstream company that offers electric cars, solar panels and batteries for power storage.
Last November, Tesla acknowledged it was struggling to ramp up the Model 3 due to the complexity of the battery-pack assembly and its automated manufacturing process. It has suffered from bottlenecks at the assembly plant in Fremont, Calif., and at the battery factory near Reno, Nev.
Tesla has received about 500,000 reservations to buy the Model 3, so the question is how quickly it can crank up production to meet the demand. The company's website currently says it will take about 12 to 18 months to get a Model 3 delivered if reserved today.
In 2016, Mr. Musk had said he expected to make as many as 200,000 Model 3s in the second half of 2017 and that the company would reach 500,000 total production in 2018. Instead, Tesla, which began production of the compact car in July, built roughly 2,400 Model 3s in the fourth quarter, making Mr. Musk's dream of producing a half million vehicles a year, including the Model S and Model X, look unlikely anytime soon.
Model 3 delays threaten to eat into Tesla's limited cash. Tesla ended 2017 with $3.4 billion in cash on hand after spending $787 million on capital expenditures for Model 3 and battery production during the fourth quarter. That was less than Tesla had forecast in November when it said it planned to spend about $1 billion. The company said it delayed spending on the Model 3 until the first quarter.
Tesla plans to spend slightly more on capital expenditures this year compared with the $3.4 billion spent in 2017, the company said. The auto maker plans to add capacity at its assembly plant to be able to make 10,000 Model 3 sedans a week after reaching the 5,000-a-week milestone, Mr. Musk wrote.
Analysts expect Tesla will have to raise additional money this year, and with the delays, their expectations for the company's ability to turn a profit have deflated. About a year ago, the consensus among analysts surveyed by FactSet estimated Tesla turning an annual adjusted profit of $1.46-a-share in 2018, a view that has flipped to a loss of $4.16 a share. In 2017, the company, which has never posted an annual profit, lost $1.96 billion, or $11.83 a share.
Despite the hurdles, Mr. Musk continues to stoke enthusiasm among investors and fans. Shares of the company have soared more than 7% this year so far, giving it a market value that rivals General Motors Co., the largest U.S. auto maker by sales.
Tesla also seems to benefit from Mr. Musk's involvement with his other company, Space Exploration Technologies Corp., which on Tuesday launched the world's most powerful rocket
in almost five decades that carried a Tesla sports car as a test-payload.
Last month, Tesla announced that the company's board had approved a compensation package
for Mr. Musk that aims for the company to reach a market value of $650 billion, about 10 times its current value.
In the fourth quarter, Tesla's $675 million loss attributable to common shareholders compared with $121 million a year ago. On an adjusted basis, the company recorded a per-share loss of $3.04, beating the $3.11 predicted by a consensus estimate of analysts surveyed by FactSet.
Automotive revenue, which makes up the bulk of Tesla's total revenue, rose 36% to $2.7 billion from a year ago.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Heard on the Street: Tesla Can't Defy Gravity Forever
Credit: By Tim Higgins
Subject: Automobile industry; Corporate profits; Factories; Electric vehicles; Capital expenditures
Location: Silicon Valley-California United States--US
People: Musk, Elon
Company / organization: Name: Space Exploration Technologies Corp; NAICS: 336414; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Feb 7, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1996644979
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1996644979?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-02-08
Database: The Wall Street Journal
Tesla Can't Defy Gravity Forever; Tesla doesn't seem to be getting closer to profitability, even after record fourth-quarter deliveries
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Feb 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla is literally flying high after Elon Musk's successful rocket launch
, which blasted a vehicle into outer space. Fourth-quarter earnings out Wednesday, however, still point to a number of challenges back here on Earth.
Tesla reported fourth-quarter revenue of $3.3 billion and an adjusted loss of $3.04 a share. That just beat the analyst consensus loss
of $3.11. But a year ago, the consensus for the fourth quarter was a loss of 17 cents a share.
There were bright spots besides the earnings. Tesla burned just $277 million in free cash, a significant improvement from recent quarters. And the company managed to avoid lowering its Model 3 production forecast for a third time in three months. The cash burn appeared lower because Tesla included customer deposits for its planned new truck and roadster in its operating cash flow. That is deceiving because these deposits aren't drawn from current operations.
Meanwhile, an alarming trend of negative operating leverage has yet to reverse itself--the more cars it sells the worse its margins become. Automotive gross margin fell to 13.8%, down more than 8 percentage points from a year earlier. That trend isn't likely to meaningfully reverse any time soon. Tesla forecasts about 100,000 deliveries of its older Model S and X vehicles this year, which offer better profits than the Model 3. That won't offer much, if any, growth from the 2017 tally of 101,000 cars.
The Model 3 is supposed to carry prices up to 65% below Tesla's average selling price on older products; there will have to be substantial cost-cutting and improvements in production efficiency to even hold margins constant. Meanwhile, new industry competition coming this year won't improve pricing power.
Granted, investor faith in Mr. Musk is as strong as ever, and Tesla still enjoys open access to capital markets. Fears of a crash in the stock price aren't likely to materialize anytime soon.
However, Tesla's chances of becoming a sustainable business that doesn't need constant capital markets access to survive seems less likely than a sports car in orbit.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Profits
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Feb 7, 2018
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1997041511
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1997041511?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-02-08
Database: The Wall Street Journal
Tesla Signals Better Model 3 Output
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 Feb 2018: B.1.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. on Wednesday signaled it is making progress in overcoming its early production troubles building the Model 3 sedan, telling shareholders it expects to generate its first sustained operating profit sometime this year.
The Silicon Valley auto maker said in its quarterly financial report that is on track to reach a milestone of making 5,000 Model 3 sedans a week by the end of the second quarter -- a twice-postponed goal -- and that it is addressing bottlenecks that have derailed production.
The optimistic tone is a reversal from last quarter's report, when Tesla warned of monthslong delays in the production of the Model 3 and raised the possibility the company could pump the brakes on planned growth. Tesla on Wednesday reported another record loss -- $675 million attributable to common shareholders -- but unlike three months ago, the loss on an adjusted basis was narrower than what analysts expected.
This year "will be a transformative year for Tesla, with a high level of operational scaling," Chief Executive Elon Musk wrote Wednesday in a letter to shareholders. "As we ramp production of both Model 3 and our energy products while keeping tight control of operating expenses, our quarterly operating income should turn sustainably positive at some point in 2018."
Tesla also improved its cash flow during the quarter -- burning just $277 million in free cash -- crediting a delay in investments for the Model 3, a sell-down of inventories of Model S sedans and Model X sport-utility vehicles and a 24% increase in customer deposits from three months earlier. While the company doesn't break out which products collected those reservations during the quarter, Tesla revealed a new semitrailer truck and a high-end sports car that will cost as much as $250,000.
In after-hours trading on Wednesday, Tesla's shares fluctuated around the $345 closing price, after rising 3.3% during regular hours.
Amid the buoyant predictions, Tesla cautioned shareholders that the company has encountered "difficulty of accurately forecasting specific production rates at specific points in time." The company often misses its targets, as it did with the Model 3 in the fourth quarter, when it sold only about 1,550 of the sedans and fell short of hitting the 5,000-a-week goal by the end of the year.
Deliveries of the Model S sedan and Model X sport-utility vehicle helped boost unit sales by 35% during the fourth quarter from a year earlier. Tesla sold a record 102,807 vehicles last year mainly on the back of those two pricey cars, which typically sell for about $100,000.
But investor attention is focused heavily on the Model 3, which starts at $35,000 and is a key pillar of Mr. Musk's strategy to remake the luxury auto maker as a more mainstream company that offers electric cars, solar panels and batteries for power storage.
Last November, Tesla acknowledged it was struggling to ramp up the Model 3 due to the complexity of the battery-pack assembly and its automated manufacturing process. It has suffered from bottlenecks at the assembly plant in Fremont, Calif., and at the battery factory near Reno, Nev.
Tesla has received about 500,000 reservations to buy the Model 3, so the question is how quickly it can crank up production to meet the demand. The company's website currently says it will take about 12 to 18 months to get a Model 3 delivered if reserved today.
In 2016, Mr. Musk had said he expected to make as many as 200,000 Model 3s in the second half of 2017 and that the company would reach 500,000 total production in 2018. Instead, Tesla, which began production of the compact car in July, built roughly 2,400 Model 3s in the fourth quarter, making Mr. Musk's dream of producing a half million vehicles a year, including the Model S and Model X, look unlikely anytime soon.
Model 3 delays threaten to eat into Tesla's limited cash. Tesla ended 2017 with $3.4 billion in cash on hand after spending $787 million on capital expenditures for Model 3 and battery production during the fourth quarter.
That was less than Tesla had forecast in November when it said it planned to spend about $1 billion. The company said it delayed spending on the Model 3 until the first quarter.
Tesla plans to spend slightly more on capital expenditures this year compared with the $3.4 billion spent in 2017, the company said.
Credit: By Tim Higgins
Subject: Automobile industry; Stockholders; Factories; Capital expenditures; Vehicles
Location: Silicon Valley-California
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2018
Publication date: Feb 8, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1999069523
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1999069523?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-02-08
Database: The Wall Street Journal
Tesla's Elon Musk Regains Bravado With Better Outlook for Model 3; The billionaire was back to making upbeat predictions after weathering 'production hell'
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Feb 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Three months ago on a quarterly call with analysts, Tesla Chief Executive Elon Musk sounded downcast as he warned of production issues
and nursed a cold after sleeping on the roof of the company's battery factory in Nevada.
On Wednesday, the billionaire's bravado was back.
Mr. Musk, speaking on a call about Tesla's fourth-quarter results
, was upbeat one day after his other company, Space Exploration Technologies Corp., sent the world's most powerful rocket in almost five decades into space
with a Tesla Roadster on board.
The Tesla CEO again boldly predicted his company would make one million vehicles a year in 2020. He boasted Tesla would build a car manufacturing system that is superior to anything in the century-old automotive industry. And he claimed that in as soon as three months a self-driving Tesla car would cross the U.S.--after missing a deadline last year.
Mr. Musk also seemingly shrugged off Tesla's troubles producing the Model 3, saying the company was now on track to meet its oft-stated goal of making 5,000 cars a week. And once Tesla achieved that milestone by the end of June, he said, the company would then make a sustainable operating profit this year--maybe even a net profit.
"I'm hopeful that people think that if we can send a Roadster to the asteroid belt, we can probably solve Model 3 production," he said.
Mr. Musk was talking shortly after Tesla announced a worst-ever quarterly loss of $675 million. His comments on Wednesday contrasted with his dour statements in November, when he surprised analysts by going so far as suggesting Tesla could put the brakes on growth.
As the CEO of two multibillion companies with a lot on the line--not to mention the founder of a brain-computer startup and a tunnel-building venture--Mr. Musk admits he is under a lot of pressure and prone to mood swings. In July, he said on Twitter
that his life consists of "great highs, terrible lows and unrelenting stress."
In the past month, Mr. Musk launched the world's biggest rocket, raised millions of dollars for his tunneling startup by selling branded flamethrowers, and attracted tabloid attention for his on-again, off-again relationship with actress Amber Heard.
Mr. Musk did come back to earth at times on Wednesday. He acknowledged that rolling out the Model 3, which began production in July, was harder than expected. "We were in a deeper level of hell than expected," he said. "Still a few levels deeper than we'd like to be but swiftly exiting, I think."
Then, he added, "it was really on balance a phenomenal year."
Mr. Musk, of course, has made brazen predictions before, including in 2016 when he suggested that by the second half of 2017 Tesla would be making as many as 200,000 Model 3s, the compact car that is key to his plans to make the company a mainstream electric-vehicle maker. Tesla instead made about 2,700 in that period.
In 2016, Mr. Musk accelerated a plan to make a total of 500,000 vehicles a year in 2018, including the company's more expensive Model S sedans and Model X sport-utility vehicles. That would increase to a total of one million a year in 2020, helped by the arrival of a new compact SUV called the Model Y.
Asked on Wednesday if the one-million target was still in play, Mr. Musk said it was. And not only that, he said, the company might make one million Model Ys in a year--though he didn't say in what year. A consensus of analysts surveyed by FactSet estimate Tesla will make 647,000 cars in 2020.
He also took a swipe at his automotive competitors, promising Tesla could leap over them with advances in manufacturing. While the automotive industry is "quite good at manufacturing," he said it produces cars too slowly, churning out at best a vehicle every 25 seconds.
"Grandma with a walker can exceed the fastest production line on earth," Mr. Musk said. "So really, not that fast."
Longtime automotive industry analyst Brian Johnson, of Barclays, tried to push for greater clarity on what Tesla was thinking of doing differently than competitors such as Toyota Motor Corp., which revolutionized car manufacturing more than a generation ago.
"The most fundamental difference is thinking about the factory really as a product," Mr. Musk said.
J.B. Straubel, Tesla's chief technical officer, added that Tesla would be treating it more as an engineering and technical problem.
"Right, which is the Toyota production system," Mr. Johnson, the analyst, said.
Mr. Musk: "Uh, yeah, we don't think so."
Write to Tim Higgins at Tim.Higgins@WSJ.com
Read More
* Tesla Says It Is Making Progress on Model 3 Production Issues
* Falcon Heavy Angst and the Sweet Smell of Success
* New Falcon Heavy Rocket Represents a Major Bet for SpaceX
Credit: By Tim Higgins
Subject: Automobile industry; Startups; Vehicles
Location: Nevada United States--US
People: Musk, Elon Heard, Amber
Company / organization: Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Twitter Inc; NAICS: 519130; Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Feb 8, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1999127351
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1999127351?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-02-09
Database: The Wall Street Journal
Business News: Tesla Gets a Lift From Rocket Launch
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 Feb 2018: B.3.
ProQuest document link
Abstract: None available.
Full text: Three months ago on a quarterly call with analysts, Tesla Inc. Chief Executive Elon Musk sounded downcast as he warned of production issues and nursed a cold after sleeping on the roof of the company's battery factory in Nevada.
On Wednesday, the billionaire's bravado was back. Mr. Musk, speaking on a call about Tesla's fourth-quarter results, was upbeat one day after his other company, Space Exploration Technologies Corp., sent the world's most powerful rocket in almost five decades into space with a Tesla Roadster on board.
The Tesla CEO again boldly predicted his company would make one million vehicles a year in 2020. He boasted Tesla would build a car-manufacturing system that is superior to anything in the century-old automotive industry. And he claimed that in as soon as three months a self-driving Tesla car would cross the U.S. -- after missing a deadline last year.
Mr. Musk also seemingly shrugged off Tesla's troubles producing the Model 3 sedan, saying the company was now on track to meet its oft-stated goal of making 5,000 cars a week. And once Tesla achieved that milestone by the end of June, he said, the company would then make a sustainable operating profit this year -- maybe even a net profit.
"I'm hopeful that people think that if we can send a Roadster to the asteroid belt, we can probably solve Model 3 production," he said. Mr. Musk was talking shortly after Tesla announced a worst-ever quarterly loss of $675 million. His comments on Wednesday contrasted with his dour statements in November, when he surprised analysts by going so far as suggesting Tesla could put the brakes on growth.
As the CEO of two multibillion companies with a lot on the line -- not to mention the founder of a brain-computer startup and a tunnel-building venture -- Mr. Musk admits he is under a lot of pressure and prone to mood swings. In July, he said on Twitter that his life consists of "great highs, terrible lows and unrelenting stress."
In the past month, Mr. Musk launched the world's biggest rocket, raised millions of dollars for his tunneling startup by selling branded flamethrowers, and attracted tabloid attention for his on-again, off-again relationship with actress Amber Heard.
Mr. Musk did come back to earth at times on Wednesday. He acknowledged that rolling out the Model 3, which began production in July, was harder than expected. "We were in a deeper level of hell than expected," he said. "Still a few levels deeper than we'd like to be but swiftly exiting, I think." Then, he added, "it was really on balance a phenomenal year."
Mr. Musk, of course, has made brazen predictions before, including in 2016 when he suggested that by the second half of 2017 Tesla would be making as many as 200,000 Model 3s, the compact car that is key to his plans to make the company a mainstream electric-vehicle maker. Tesla instead made about 2,700 in that period.
In 2016, Mr. Musk accelerated a plan to make a total of 500,000 vehicles a year in 2018, including the company's more expensive Model S sedans and Model X sport-utility vehicles. That would increase to a total of one million a year in 2020, helped by the arrival of a new compact SUV called the Model Y. Asked on Wednesday if the one-million target was still in play, Mr. Musk said it was. And not only that, he said, the company might make one million Model Ys in a year -- though he didn't say in what year. A consensus of analysts surveyed by FactSet estimates Tesla may reach 279,000 units in total this year and 647,000 in 2020.
Credit: By Tim Higgins
Subject: Automobile industry; Startups; Vehicles
Location: Nevada United States--US
People: Musk, Elon Heard, Amber
Company / organization: Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Twitter Inc; NAICS: 519130; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2018
Publication date: Feb 9, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1999470877
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1999470877?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-02-09
Database: The Wall Street Journal
Beyond Tesla: How Else to Buy Into Electric Cars; Chemical group Umicore is massively expanding its capacity to produce cathodes for electric car batteries
Author: Wilmot, Stephen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Feb 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla gets all the glamour, but there are more reliable ways to invest in the rise of electric cars.
Take Umicore, a European chemical group that is doing all it can to meet surging demand for cathodes, a crucial component in the batteries that power plug-in vehicles. Last May the company said it would spend an extra [euro]300 million
($367.5 million) on new factories in China and South Korea. Late Thursday it said the growth outlook for electric cars justified a further [euro]660 million of investment, again in China and also in Europe for the first time.
The company requested cash to fund the rollout. Shareholders responded enthusiastically, giving almost [euro]900 million, roughly 10% of Umicore's market value, at a share price just 2.7% lower than Thursday's close. The stock shrugged off market volatility to jump 8% in morning trading Friday. The expansion implies management expectations well in excess of current analyst forecasts.
The plan is not risk-free: Battery technology is evolving fast, giving innovators a chance to seize contracts. Still, car makers have to commit to a technology when they scale up production of new models, and that technology has to be reliable. For the time being this should protect profitable incumbent leaders
like Umicore and Sumitomo Metals & Mining, which supplies Tesla's battery partner Panasonic.
Umicore stock is up roughly two-thirds over the past year and trades for a punchy 31 times forward earnings, according to FactSet. But this multiple will come down as analysts upgrade their numbers. Umicore made a 14.6% operating margin in its cathode division last year, so the capacity expansion should be profitable.
Umicore's cathode division is set to dwarf its others within a few years. Focused plays on the rise of electric cars are sometimes worth the premium.
Write to Stephen Wilmot at stephen.wilmot@wsj.com
Credit: By Stephen Wilmot
Subject: Automobile industry; Electric vehicles
Location: China Europe South Korea
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Feb 9, 2018
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Bu siness And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1999694495
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1999694495?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-02-12
Database: The Wall Street Journal
Tesla Begins Taking Model 3 Orders From First-Time Reservation Holders; Move suggests production of the Model 3 is accelerating after a rough start
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Feb 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. for the first time is notifying some reservation holders new to the electric-car brand that they can begin configuring and ordering their Model 3 sedan.
The milestone suggests production of the vehicle at Tesla's assembly plant is picking up steam after a turbulent beginning in July. Previously, the Silicon Valley auto maker had limited opening orders to reservation holders who were employees or had been previous Tesla customers.
The Model 3 represents a key part of Chief Executive Elon Musk's strategy to remake Tesla from niche luxury-car company into a mainstream player that sells electric vehicles, solar panels and storage batteries.
Tesla confirmed a small group of customers are receiving notifications Thursday based on when they placed their reservations. The company traditionally has rolled out invitations in small groups and over time aligned them to production rates.
Tesla has received about 500,000 reservations for the Model 3 since revealing the sedan in 2016. The company expects that customers invited to complete their design will receive their cars about four weeks after placing their order.
Production on the Model 3 began in July last year, and Tesla has struggled to meet its ambitious goals.
In January, the company reported delivering about 1,600 Model 3 vehicles during the final three months of 2017--well below its goal of a build rate of 5,000 Model 3s on a weekly basis. Tesla pushed back that goal
until the end of the first half. A rate of 5,000 vehicles a week would equal about 250,000 cars a year.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Vehicles
Location: Silicon Valley-California
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Feb 22, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2007128787
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2007128787?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-02-23
Database: The Wall Street Journal
Tesla Advances Model 3 Orders
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]23 Feb 2018: B.4.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. for the first time is notifying some reservation holders new to the electric-car brand that they can begin configuring and ordering their Model 3 sedan.
The milestone suggests production of the vehicle at Tesla's assembly plant is picking up steam after a turbulent beginning in July. Previously, the Silicon Valley auto maker had limited opening orders to reservation holders who were employees or previous Tesla customers.
The Model 3 represents a key part of Chief Executive Elon Musk's strategy to remake Tesla from niche luxury-car company into a mainstream player that sells electric vehicles, solar panels and storage batteries.
Tesla confirmed a small group of customers received notifications Thursday based on when they placed their reservations.
The company traditionally has rolled out invitations in small groups and over time aligned them to production rates.
Tesla has received about 500,000 reservations for the Model 3 since unveiling the sedan in 2016.
The company expects that customers invited to complete their design will receive their cars about four weeks after placing their order.
Production on the Model 3 began in July last year, and Tesla has struggled to meet its ambitious goals.
In January, the company reported delivering about 1,600 Model 3 vehicles during the final three months of 2017 -- well below its goal of a build rate of 5,000 Model 3s weekly.
Tesla pushed back that goal until the end of the first half. A rate of 5,000 vehicles a week would equal about 250,000 cars a year.
Credit: By Tim Higgins
Subject: Automobile industry; Vehicles
Location: Silicon Valley-California
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2018
Publication date: Feb 23, 2018
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2007419475
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2007419475?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-02-23
Database: The Wall Street Journal
Elon Musk's Uncontested 3-Pointers; What does the Tesla and SpaceX founder have in common with Stephen Curry?
Author: Kessler, Andy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Feb 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: I have a suspicion that Stephen Curry and Elon Musk are the same person. First, as was said of Michael Jackson and Diana Ross, you never see them in the same room together. More important, they both dislike crowded spaces.
Mr. Curry, a two-time NBA most valuable player with the Golden State Warriors, has mastered the art and science of shooting 3-pointers. But a closer look at his stats reveals that he really likes to shoot uncontested 3s. Who wouldn't? Making uncontested baskets is a lot easier.
Mr. Curry often takes shots from several feet behind the 3-point line. Defenders, figuring no one would be stupid enough to shoot from that far away, leave him open. And he makes baskets with surprising accuracy. At one point in 2016, he made 35 out of 52 shots from between 28 and 50 feet. Uncontested indeed.
Elon Musk's business strategy isn't so different: Go far enough into the future that there are no other competitors. Mr. Musk's first success was X.com, an email payment company. It merged with Peter Thiel's Confinity to form PayPal--and avoid competition. They had the market to themselves for a long time because fraud, especially from Eastern Europe, was so rampant on early internet payment platforms. They solved the fraud problem and enjoyed an uncontested market, eventually selling for $1.5 billion to eBay.
Then Mr. Musk headed further into the future. He took the nine-figure payout from PayPal and pushed ahead with SpaceX, Tesla and Solar City. Literally his last $20 million went to Tesla in 2008. "I was tapped out. I had to borrow money for rent after that," he later recalled. Private space launches, electric cars and rooftop-solar financing were all huge Muskian pushes into the future, where no one else dared play. Today, Tesla is worth around $60 billion. SpaceX raised money last summer at a $21 billion valuation. Mr. Musk is no longer borrowing to pay his rent.
Quite impressive, even though I find all the handouts offensive. When I see someone driving a Tesla I greet him with, "You're welcome." When he inevitably asks for what, I roll out the long list of subsidies: a $465 million Energy Department loan in 2009, a $7,500-a-car income-tax credit from the feds, $1.3 billion in incentives from Nevada for a factory, and more. Removing competition by racing to the future is one thing. Seeking special treatment to boost your advantage is cheating.
Mr. Musk still pushes the boundaries. Some ideas will work and some will go up in flames, maybe literally. Work is progressing on the sonic-speed Hyperloop transportation system. The Boring Co., which Mr. Musk founded in 2016 to undertake the project, proposes to dig tunnels under cities fast--and to reduce costs by a factor of 10. For some reason, the Boring Company recently presold 20,000 flamethrowers at $500 each, complimentary fire extinguisher included. The entrepreneur is even funding a "neural lace," a still theoretical brain-to-computer interface. Is a holodeck next? All these ideas are far-fetched, but they're mostly uncontested.
In his 2014 book, "Zero to One," Mr. Thiel badmouths competition. "Tolstoy opens Anna Karenina by observing: 'All happy families are alike; each unhappy family is unhappy in its own way.' Business is the opposite. All happy companies are different: each one earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition." Google founder Larry Page agrees. "If you're not doing some things that are crazy, then you're doing the wrong things." I agree, as long as there are market forces to allow competition from anyone who dares.
The future is almost always uncomfortable for everyone except the leading risk taker. What's the catch? Even an innovator has to be right in betting that there's a market for his innovations. Sometimes there is no competition because the risk takers are dead wrong. But Mr. Musk has been right, as have Messrs. Thiel and Page.
Mr. Page reportedly once told
a venture capitalist, "You know, if I were to get hit by a bus today, I should leave all of it to Elon Musk." He later explained to Charlie Rose he liked Mr. Musk's idea of going to Mars "to back up humanity." Good luck with that. But then again, I would love to see them try. Like Mr. Curry's 3s, it will certainly be uncontested.
Credit: By Andy Kessler
Subject: Professional basketball; Competition
Location: Eastern Europe Nevada
People: Rose, Charlie Musk, Elon Curry, Stephen Ross, Diana
Company / organization: Name: PayPal Inc; NAICS: 522320; Name: National Basketball Association; NAICS: 813990; Name: Golden State Warriors; NAICS: 711211; Name: Boring Co; NAICS: 237990; Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Google Inc; NAICS: 334310, 519130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Feb 25, 2018
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2007872237
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2007872237?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-02-26
Database: The Wall Street Journal
GE Power, in Need of a Lift, Chases Tesla and Siemens in Batteries; The battery-storage market is expected to grow fast in the next decade, with Tesla Inc. and Siemens AG among other new entrants
Author: Ailworth, Erin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Mar 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: HOUSTON--General Electric Co.
, which has struggled in the growing business of large-scale electricity storage, is trying again with a new battery platform as it tries to catch up to rivals such as Tesla Inc. and Siemens AG.
The giant platform called GE Reservoir is expected to store electricity generated by wind turbines and solar panels for later use. The battery-storage market is expected to grow in coming years as some utilities look for less-expensive alternatives to the power plants
that fire up during peak hours to meet power demand. It also is expected to be used to add jolts of power when needed to stabilize voltage and frequency on the electric grid.
While the market is currently tiny, its growth potential has already attracted a parade of big-name competitors including Tesla, which deployed an enormous battery system in Australia
last year. Siemens
, one of GE's biggest rivals in the power business, paired with AES
Corp. last year to launch Fluence Energy LLC, a joint venture that is building what is expected to be the world's largest lithium-ion battery
in California. IHS Markit predicts the global market for batteries in the power sector will grow 14% annually through 2025.
This isn't GE's first attempt to turn rechargeable batteries into a big business. The company tried making batteries using sodium-based technologies several years ago but abandoned the effort when it couldn't compete with the dominant technology, lithium-ion batteries. GE then turned its attention to selling battery systems via a subsidiary called Current. It recently revamped that business, creating a stand-alone battery unit within the GE Power division.
"Energy storage is like a Swiss Army knife--there are so many things you can do with it," said Eric Gebhardt, vice president and strategic technology officer at GE Power, who is scheduled to talk about batteries at the CERAWeek energy conference here on Thursday.
The battery being unveiled--a 1.2-megawatt unit using lithium-ion technology--is the first in a series GE plans to launch under the Reservoir platform. GE said it has already lined up a customer, which it declined to name, and expects to start shipping Reservoirs by early 2019.
Success would be a needed boost for the struggling conglomerate, which is in the middle of restructuring and said last week it would overhaul its board. GE is seeking access to a market that Navigant Research predicts will generate tens of billions of dollars in revenue in the next decade or so.
One of GE's biggest challenges will be differentiating its battery products from those offered by competitors such as Fluence. Mr. Gebhardt said GE will seek to take advantage of its vast footprint in electricity to build its battery business.
Prices of lithium-ion batteries have dropped sharply in recent years, as they have become ubiquitous in products such as laptops and smartphones, improving the economies of scale of manufacturing. That is starting to make it more economically viable to use batteries to store large amounts of electricity.
Lithium-ion battery packs that cost $1,000 per kilowatt-hour at the start of the decade now cost between $250 and $300 per kilowatt-hour, said Ravi Manghani, director of energy storage at GTM Research.
GTM forecasts that from the end of 2017 through 2023, the amount of storage connected to the U.S. power grid will multiply by more than 25 times. It estimates Fluence is the current market leader.
GE is hoping to change that with the Reservoir platform. GE says the Reservoir battery can last about 15% longer than the best batteries currently on the market and can be installed quicker.
Mr. Manghani said GE has the expertise to be a big battery competitor, but questions whether it will demonstrate the staying power needed to see the battery market grow into a sector that can benefit its bottom line.
"If you look at their track record on storage, they've been one step forward two steps back," Mr. Manghani said. "It comes back to the patience question: Are they going to be patient enough?"
Sam Huntington, a senior analyst at IHS Markit, said GE's renewed interest in batteries shows just how seriously the power industry overall is now taking the concept of energy storage. Past missteps aside, he said the company has the chance to become a significant player.
"GE just has so much expertise in this space that it's just hard to imagine them not figuring it out," he said.
Credit: By Erin Ailworth
Subject: Batteries; Electricity distribution; Lithium; Competition
Location: Australia California
Company / organization: Name: Siemens AG; NAICS: 334210, 334220, 334517; Name: AES Corp; NAICS: 221122; Name: General Electric Co; NAICS: 332510, 334290, 334512, 334519; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Mar 7, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2011218196
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2011218196?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-08
Database: The Wall Street Journal
Tesla's Elon Musk Tells Trump China Trade Rules 'Make Things Very Difficult'; Electric-car maker's push comes as U.S. officials ask China to reduce trade deficit by $100 billion
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Mar 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. Chief Executive Elon Musk took to Twitter on Thursday to lobby the president on China's trade stance on auto makers, saying the Middle Kingdom's current rules "make things very difficult."
Mr. Musk's comments on Twitter came in response to a tweet from President Donald Trump stating his administration has asked Beijing
for a plan to cut the annual U.S. trade deficit with China.
The Tesla CEO replied: "Do you think the US & China should have equal & fair rules for cars? Meaning, same import duties, ownership constraints & other factors."
Mr. Musk's comment suggests that he may be growing frustrated with the pace of opening a factory in Shanghai to meet the growing demand for Tesla's electric cars among Chinese consumers. Tesla's revenue in China roughly doubled last year to about $2 billion from $1 billion in 2016, ranking it behind the U.S. among Silicon Valley auto maker's top revenue-producing countries.
Mr. Musk noted on Twitter how American-made cars imported into China face higher duties than Chinese vehicles coming to the U.S. and how foreign auto makers in China face restrictions on ownership of factories. To avoid 25% tariffs, foreign auto makers build cars in China through joint ventures with local manufacturers--something that requires a sharing of profit and potentially technology. It is an approach Mr. Musk has been trying to avoid.
"The current rules make things very difficult," Mr. Musk wrote on Twitter. "It's like competing in an Olympic race wearing lead shoes."
On Thursday, while announcing his order to charge tariffs on steel and aluminum, Mr. Trump read off Mr. Musk's tweet regarding the higher Chinese tariffs on American vehicles. "That's from Elon," the president said. "But everybody knows it, they've known it for years. They never did anything about it. It's got to change."
Tesla's push into China comes as trade relations between the two nations has seen increasing tension. The Trump administration is asking Beijing for a plan to reduce the U.S.'s annual trade deficit with China by $100 billion, people familiar with the matter have told The Wall Street Journal.
Tesla is said to have forged a deal to set up in a special free-trade area in Shanghai without a local partner, but it hasn't announced any such agreement. Some analysts are skeptical that Tesla could get a break on the tax. In November, Mr. Musk gave a rough three-year time frame
to begin manufacturing in China.
He has said a China factory with a capacity of at least 200,000 vehicles a year would build Model 3 sedans and the coming Model Y sport-utility vehicle.
As Mr. Musk looks to expand in China, several Chinese-backed startup auto makers have opened operations in the U.S. with ambitious plans heavily inspired by Tesla's success.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Read More
* Tesla Reveals Time Frame for China Factory
* U.S. Asks China for Plan to Reduce Trade Deficit by $100 Billion
* Tesla Begins Taking Model 3 Orders From First-Time Reservation Holders
Credit: By Tim Higgins
Subject: Automobile industry; Manufacturing; Trade deficit; Social networks; Factories; Vehicles
Location: Silicon Valley-California Beijing China United States--US China
People: Trump, Donald J Musk, Elon
Company / organization: Name: Twitter Inc; NAICS: 519130; Name: Wall Street Journal; NAICS: 511110; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Mar 8, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2011743210
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2011743210?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-09
Database: The Wall Street Journal
Auto Industry's Cure for Electric Car Blues: Be More Like Tesla; From Ford to Porsche, car makers plan to invest $70 billion to introduce a new generation of more stylish electric vehicles, and batteries
Author: Colias, Mike; Spector, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: It took six years for Ford Motor Co. to sell 8,700 electric Focus small cars. It takes just three days to sell as many gasoline-powered F-Series pickup trucks.
Americans may not be lining up to buy electric cars, but that hasn't stopped Ford from pushing ahead with plans to spend $11 billion
to develop more compelling battery-powered vehicles. Ford's rising commitment underscores a willingness among big car companies to experiment with the types of sexy electric cars that give Tesla Inc. its appeal.
Ford's push, announced at the Detroit auto show in January, is part of more than $70 billion in planned investments into electric vehicles and batteries that global car companies have announced since the beginning of 2017. This year, Jaguar is expected to offer an electric SUV via U.S. dealerships, to be followed by new battery-powered offerings from brands as diverse as Audi, Porsche, Volvo and Toyota.
American buyers have shown little interest; the vast majority of vehicles leaving U.S. showrooms have gasoline engines under the hood. While deliveries of pure electric and plug-in hybrid vehicles
are on pace to top 200,000 for the first time, that represents slightly more than 1% of the market even with a $7,500 federal tax credit.
One reason for the slow adoption is that auto makers have long made electric cars with staid designs unappealing to consumers. They did so believing the vehicles were in low demand, developing a collection of automobiles detractors often labeled "compliance cars" meant to assuage regulators rather than sell in large numbers.
"We will be converting our traditional, most iconic vehicles to all-electric," said Jim Farley, Ford's global markets chief, in an interview, adding he even sees a potential market for pickup trucks like the F-150 fully powered by batteries. The choices at dealerships for electric vehicles, now paltry, are "going to explode," he said.
Among Ford's planned vehicles is a high-performance electric SUV coming to showrooms in 2020 called the Mach 1, a name the company once used on its powerful Mustang sports cars.
The new strategy comes as battery costs are falling, promising to cut prices of electric vehicles, which are typically thousands of dollars more expensive than comparable gas-powered models. Stricter environmental regulations in markets such as California and China are mandating electric vehicles. An emissions-cheating crisis at Germany's Volkswagen AG has soured many customers on diesel. The U.K., France and India have all weighed banning internal-combustion engines for environmental reasons.
Volkswagen, which pleaded guilty to criminal wrongdoing in the U.S. for evading emissions requirements, has committed $40 billion to electric vehicles through 2022. The German auto giant's plans include a battery-powered version of its iconic microbus called the Buzz.
Mercedes-Benz parent Daimler AG plans to invest as much as roughly $12 billion in electrified vehicles. GM plans 20 new battery and fuel-cell electric vehicles by 2023, though the Detroit auto giant hasn't revealed an investment figure.
"The die has been cast," said Mike Jackson, chief executive of AutoNation Inc., the largest dealership chain in the U.S. He predicts electric vehicles will represent up to 20% of U.S. automobile sales by 2030, up from around 1% today.
"This has never happened before: The three biggest markets in the world are mandating electric vehicles," he said, referring to China, Europe and the U.S., where California and other states require increased electric sales.
Industrywide electrification isn't assured. While the distance electric cars can travel on a single battery charge is increasing, there is a lack of widespread charging stations needed to ease a driver's fear of becoming stranded. For now, many EVs remain too expensive for most buyers--Jaguar's new I-Pace SUV will start around $70,000.
In the U.S., tax credits that eventually expire have propped up electric-car sales, and car companies became nervous when lawmakers weighed eliminating them in the recent GOP tax-reform legislation. GM has called for an expansion of those credits.
"If it does not gain acceptance in the market, then everybody--industry, employees and politicians--have a big problem," Peugeot Chief Executive Carlos Tavares recently told reporters.
It could take several years for the prices of electric cars to approach those of current gas-powered vehicles. Mass-market brands lose money on their current electric offerings. Fiat Chrysler Chief Executive Sergio Marchionne once quipped that he hoped customers would eschew a Fiat 500 electric car because "every time I sell one it costs me $14,000."
The new wave of vehicles should represent a departure from cars such as Ford's electric Focus of 2011, capable of traveling only 76 miles on a single charge, and even less when owners used their heaters in the winter. Its $40,000 price tag was nearly twice its gasoline-powered counterpart.
GM contends the Chevrolet Bolt released in late 2016 "cracked the code" for adoption of electric cars, boasting a range of 240 miles on a charge and a price around $37,000 before rebates. Still, the hatchback remains too small for most customers, so GM plans larger vehicles with similar electric underpinnings.
Jim Sepe, of Glendale, Calif., was driving a Ford SUV before leasing a Bolt, which he described as "snappy and nimble." Mr. Sepe, a 57-year-old chief technology officer at a consumer electronics company, said operating the car "feels like I am driving the future."
William Boston contributed to this article.
Write to Mike Colias at Mike.Colias@wsj.com and Mike Spector at mike.spector@wsj.com
Related
* GM Chief Pushes for Renewed Tax Breaks on Electric Vehicles
* Ford Increasing Electric Vehicle Investment to $11 Billion by 2022
* Driven by Electric-Vehicle Demand, Firms Focus on Cobalt
* U.S. Auto Makers Step Up Plans for Electric Vehicles
(Oct. 2, 2017)
Credit: By Mike Colias and Mike Spector
Subject: Gasoline; Automobile dealers; Electric vehicles; Trucks
Location: United States--US India Germany United Kingdom--UK Detroit Michigan China California France Europe
People: Tavares, Carlos
Company / organization: Name: Republican Party; NAICS: 813940; Name: AutoNation Inc; NAICS: 441110; Name: Fiat Group Automobile SpA; NAICS: 336111, 336390; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Groupe PSA; NAICS: 336111; Name: Volkswagen AG; NAICS: 336111, 336390; Name: Tesla Inc; NAICS: 336999; Name: Daimler AG; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Mar 9, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2012111291
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2012111291?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distri bution is prohibited without permission.
Last updated: 2018-03-10
Database: The Wall Street Journal
Volkswagen Vows to Overtake Tesla With World's Largest Electric-Car Fleet; Traditional auto makers' aggressive push into electric vehicles is putting pressure on Tesla
Author: Boston, William; Bernhard, Max
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Mar 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: BERLIN--Volkswagen AG has pulled into Tesla Inc.'s rearview mirror and vowed to overtake the electric-car pioneer with an extensive rollout of battery and hybrid models
over the next five years, as well as new production facilities around the world.
The German car maker--which is the largest world-wide, with sales of 10.7 million vehicles last year--said Tuesday that it would build at least 16 electric-vehicle plants by 2025 in Europe, China and the U.S. The company expects nine of those plants to be in operation by 2020.
One of the plants would be set up at Volkswagen's factory in Chattanooga, Tenn., with five planned for China and the remainder to be added to the three sites the company already operates in Europe.
Volkswagen aims to sell three million electric vehicles a year by 2025.
By comparison, Tesla sold 102,807 cars last year, mainly its high-end Model S family sedan and Model X sport-utility vehicle. Production of the Model 3 began last year, but Tesla has struggled to meet production goals. It has taken about 500,000 orders for the Model 3 but is well below its target of building 250,000 cars a year.
On Tuesday, Volkswagen Chief Executive Matthias Müller said his company, which owns a dozen brands including VW, Audi, Porsche, Skoda, Bentley and Lamborghini, would launch a new electric vehicle "virtually every month" starting in 2019.
"This is how we intend to offer the largest fleet of electric vehicles in the world, across all brands and regions, in just a few years," he said at Volkswagen's annual media conference, according to a news release.
Global demand for electric cars is still only a tiny fraction of new-car sales, and it is far from certain that the huge investments Volkswagen and other car manufacturers are making are going to pay off.
"The absolute numbers are still small," Mr. Müller told reporters Tuesday. "But that will change at the latest when the first models of the next e-generation come to market."
The shift to electric comes after Volkswagen pleaded guilty in 2016 to rigging millions of diesel-powered cars to cheat emissions tests
and was forced to pay about $25 billion in fines, penalties and compensation.
Now, Volkswagen is back to churning out a profit
. Its net income more than doubled last year to [euro]11.4 billion ($14.1 billion), and its revenue rose 6% to [euro]230.7 billion. Looking ahead to 2018, Volkswagen said it expects revenue to rise as much as 5%. It expects operating return on sales to increase between 6.5% and 7.5%, compared with 7.4% last year.
The company has already invested nearly half the [euro]50 billion it has earmarked for batteries as it ramps up electric-vehicle production to three million cars a year by 2025.
It has secured battery supply from China's Contemporary Amperex Technology Co. and South Korea's Samsung SDI Co. and LG Chem Ltd.
Traditional auto makers' aggressive push into electric cars is putting pressure on Tesla. While the technology leader is having trouble boosting production of its Model 3
, Volkswagen already has a global network of more than 100 factories and years of experience.
The new electric-car plants are expected to be built inside existing factories and will use standard underlying technology to create greater scale and cut costs. It is the same strategy Volkswagen used to create savings in production of its conventional cars.
It began rolling out a standardized technology for its midsize family cars in 2012 that is now used to produce 40% of the company's vehicles. The technology is shared by the VW brand, Skoda, Seat and some Audi models.
Using this strategy, Volkswagen's brands are planning to launch 50 new electric models and 30 new hybrids by 2025, and to create electric versions of its entire range of more than 300 models by 2030.
Write to William Boston at william.boston@wsj.com and Max Bernhard at Max.Bernhard@dowjones.com
More on Volkswagen
* Too Far for Fahrvergnügen
* Europe Car Makers Threaten Reprisals for Tariffs
* Germany Paves Way for Diesel Ban (Feb. 27)
* Volkswagen Results Benefit From Strong Sales, Cost Cutting (Feb. 23)
More on Tesla
* Auto Industry's Cure for Electric Car Blues: Be More Like Tesla
* Tesla's Elon Musk: China Trade Rules 'Make Things Very Difficult'
* GE Power, in Need of a Lift, Chases Tesla and Siemens in Batteries
Credit: By William Boston and Max Bernhard
Subject: Fines & penalties; Automobile industry; Factories; Automobile sales; Electric vehicles
Location: China United States--US Germany Europe South Korea
People: Musk, Elon
Company / organization: Name: Volkswagen AG; NAICS: 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Mar 13, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2013188281
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2013188281?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-13
Database: The Wall Street Journal
Volkswagen Vows to Overtake Tesla With World's Largest Electric Car Fleet; Traditional auto makers' aggressive push into electric vehicles is putting pressure on Tesla
Author: Boston, William; Bernhard, Max
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Mar 2018: n/a. [Duplicate]
ProQuest document link
Abstract: None available.
Full text: BERLIN--Volkswagen AG has pulled into Tesla Inc.'s rearview and vowed to overtake the electric car pioneer with a massive rollout of battery and hybrid models
over the next five years and production facilities around the world.
The German car maker, which is the largest world-wide with sales of 10.7 million vehicles last year, said Tuesday that it would build at least 16 new electric vehicle plants by 2025, nine of which will be in operation by 2020, in Europe, China and the U.S.
One of the plants will be set up at Volkswagen's factory in Chattanooga, Tenn., five are planned for China and the remainder will be added to the three sites it already operates in Europe.
Volkswagen aims to sell three million electric vehicles a year by 2025.
By comparison, Tesla sold 102,807 cars last year, mainly its high-end Model S sedan and Model X sport-utility vehicle. Production of the Model 3, the company's first large-volume family sedan,
began last year, but Tesla has struggled to meet production goals. It has taken about 500,000 orders for the Model 3 but is well below its target of building 250,000 cars a year.
On Tuesday, Volkswagen Chief Executive Matthias Müller said that his company, which owns a dozen brands including VW, Audi, Porsche, Skoda, Bentley and Lamborghini would launch a new electric vehicle "virtually every month" from 2019.
"This is how we intend to offer the largest fleet of electric vehicles in the world, across all brands and regions, in just a few years," he said at Volkswagen's annual media conference, according to a press release.
Global demand for electric cars is still only a tiny fraction of new car sales and it is far from certain that the huge investments Volkswagen and other car manufacturers are making is going to pay off.
"The absolute numbers are still small," Mr. Müller told reporters Tuesday. "But that will change at the latest when the first models of the next e-generation come to market."
The shift to electric comes after Volkswagen pleaded guilty in 2016 to rigging millions of diesel-powered cars to cheat emissions tests
and was forced to pay around $25 billion in fines, penalties and compensation.
Now, Volkswagen is back to churning out profits
. Its net income more than doubled last year to [euro]11.4 billion ($14.1 billion) and revenue rose 6% to [euro]230.7 billion. Looking ahead to 2018, Volkswagen said it expected revenue to rise by as much as 5% and saw an operating return on sales of between 6.5% and 7.5%, compared with 7.4% last year.
The company has already invested nearly half the [euro]50 billion it has earmarked for batteries as it ramps up electric vehicle production to three million cars a year by 2025.
It has secured battery supply from China's Contemporary Amperex Technology Co. Ltd. and South Korea's Samsung SDI Co. and LG Chem Ltd.
Traditional auto makers' aggressive push into electric cars is putting pressure on Tesla. While the technology leader is having trouble ramping up production of its Model 3, Volkswagen already has a global network of more than 100 factories and years of experience.
The new electric car plants are expected to be built inside existing factories and will use standard underlying technology to create greater scale and cut costs. It is the same strategy Volkswagen used to create savings in production of its conventional cars.
It began rolling out a standardized technology for its midsize family cars in 2012 that is now used to produce 40% of the company's vehicles. The technology is shared by the VW brand, Skoda, Seat and some Audi models.
Using this strategy, Volkswagen's brands are planning to launch 50 new electric models and 30 new hybrids by 2025 and to create electric versions of its entire range of more than 300 models by 2030.
Write to William Boston at william.boston@wsj.com and Max Bernhard at Max.Bernhard@dowjones.com
More on Volkswagen
* Too Far for Fahrvergnügen
* Europe Car Makers Threaten Reprisals for Tariffs
* Germany Paves Way for Diesel Ban (Feb. 27)
* Volkswagen Results Benefit From Strong Sales, Cost Cutting (Feb. 23)
More on Tesla
* Auto Industry's Cure for Electric Car Blues: Be More Like Tesla
* Tesla's Elon Musk: China Trade Rules 'Make Things Very Difficult'
* GE Power, in Need of a Lift, Chases Tesla and Siemens in Batteries
Credit: By William Boston and Max Bernhard
Subject: Fines & penalties; Automobile industry; Factories; Automobile sales; Electric vehicles
Location: China United States--US Germany Europe South Korea
People: Musk, Elon
Company / organization: Name: Volkswagen AG; NAICS: 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Mar 13, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2013205642
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2013205642?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-13
Database: The Wall Street Journal
Volkswagen Vows to Overtake Tesla With World's Largest Electric-Car Fleet; Traditional auto makers' aggressive push into electric vehicles is putting pressure on Tesla
Author: Boston, William; Bernhard, Max
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Mar 2018: n/a. [Duplicate]
ProQuest document link
Abstract: None available.
Full text: BERLIN--Volkswagen AG has pulled into Tesla Inc.'s rearview mirror and vowed to overtake the electric-car pioneer with an extensive rollout of battery and hybrid models
over the next five years, as well as new production facilities around the world.
The German car maker--which is the largest world-wide, with sales of 10.7 million vehicles last year--said Tuesday that it would build at least 16 electric-vehicle plants by 2025 in Europe, China and the U.S. The company expects nine of those plants to be in operation by 2020.
One of the plants would be set up at Volkswagen's factory in Chattanooga, Tenn., with five planned for China and the remainder to be added to the three sites the company already operates in Europe.
Volkswagen aims to sell three million electric vehicles a year by 2025.
By comparison, Tesla sold 102,807 cars last year, mainly its high-end Model S family sedan and Model X sport-utility vehicle. Production of the Model 3 began last year, but Tesla has struggled to meet production goals. It has taken about 500,000 orders for the Model 3 but is well below its target of building 250,000 cars a year.
On Tuesday, Volkswagen Chief Executive Matthias Müller said his company, which owns a dozen brands including VW, Audi, Porsche, Skoda, Bentley and Lamborghini, would launch a new electric vehicle "virtually every month" starting in 2019.
"This is how we intend to offer the largest fleet of electric vehicles in the world, across all brands and regions, in just a few years," he said at Volkswagen's annual media conference, according to a news release.
Global demand for electric cars is still only a tiny fraction of new-car sales, and it is far from certain that the huge investments Volkswagen and other car manufacturers are making are going to pay off.
"The absolute numbers are still small," Mr. Müller told reporters Tuesday. "But that will change at the latest when the first models of the next e-generation come to market."
The shift to electric comes after Volkswagen pleaded guilty in 2016 to rigging millions of diesel-powered cars to cheat emissions tests
and was forced to pay about $25 billion in fines, penalties and compensation.
Now, Volkswagen is back to churning out a profit
. Its net income more than doubled last year to [euro]11.4 billion ($14.1 billion), and its revenue rose 6% to [euro]230.7 billion. Looking ahead to 2018, Volkswagen said it expects revenue to rise as much as 5%. It expects operating return on sales to increase between 6.5% and 7.5%, compared with 7.4% last year.
The company has already invested nearly half the [euro]50 billion it has earmarked for batteries as it ramps up electric-vehicle production to three million cars a year by 2025.
It has secured battery supply from China's Contemporary Amperex Technology Co. and South Korea's Samsung SDI Co. and LG Chem Ltd.
Traditional auto makers' aggressive push into electric cars is putting pressure on Tesla. While the technology leader is having trouble boosting production of its Model 3
, Volkswagen already has a global network of more than 100 factories and years of experience.
The new electric-car plants are expected to be built inside existing factories and will use standard underlying technology to create greater scale and cut costs. It is the same strategy Volkswagen used to create savings in production of its conventional cars.
It began rolling out a standardized technology for its midsize family cars in 2012 that is now used to produce 40% of the company's vehicles. The technology is shared by the VW brand, Skoda, Seat and some Audi models.
Using this strategy, Volkswagen's brands are planning to launch 50 new electric models and 30 new hybrids by 2025, and to create electric versions of its entire range of more than 300 models by 2030.
Write to William Boston at william.boston@wsj.com and Max Bernhard at Max.Bernhard@dowjones.com
More on Volkswagen
* Too Far for Fahrvergnügen
* Europe Car Makers Threaten Reprisals for Tariffs
* Germany Paves Way for Diesel Ban (Feb. 27)
* Volkswagen Results Benefit From Strong Sales, Cost Cutting (Feb. 23)
More on Tesla
* Auto Industry's Cure for Electric Car Blues: Be More Like Tesla
* Tesla's Elon Musk: China Trade Rules 'Make Things Very Difficult'
* GE Power, in Need of a Lift, Chases Tesla and Siemens in Batteries
Credit: By William Boston and Max Bernhard
Subject: Fines & penalties; Automobile industry; Factories; Electric vehicles
Location: China United States--US Germany Europe South Korea
People: Musk, Elon
Company / organization: Name: Volkswagen AG; NAICS: 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Mar 13, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2013452852
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2013452852?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-14
Database: The Wall Street Journal
Business News: VW Amps Up Electric-Car Plans --- Auto maker wants to charge past Tesla with growing lineup of battery, hybrid models
Author: Boston, William; Bernhard, Max
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 Mar 2018: B.3.
ProQuest document link
Abstract: None available.
Full text: BERLIN -- Volkswagen AG has pulled into Tesla Inc.'s rearview mirror and vowed to overtake the electric-car pioneer with an extensive rollout of battery and hybrid models over the next five years, as well as new production facilities around the world.
The German car maker -- which is the largest world-wide, with sales of 10.7 million vehicles last year -- said Tuesday that it would build at least 16 new electric-vehicle plants by 2025 in Europe, China and the U.S. The company expects nine of those plants to be in operation by 2020.
One of the plants would be set up at Volkswagen's factory in Chattanooga, Tenn., with five planned for China and the remainder to be added to the three electric-vehicle production sites the company already operates in Europe.
Volkswagen aims to sell three million electric vehicles a year by 2025.
By comparison, Tesla sold 102,807 cars last year, mainly its high-end Model S family sedan and Model X sport-utility vehicle. Production of the Model 3 began last year, but Tesla has struggled to meet production goals. It has taken about 500,000 orders for the Model 3 but is well below its target of building 250,000 cars a year.
On Tuesday, Volkswagen Chief Executive Matthias Muller said his company, which owns a dozen brands including VW, Audi, Porsche, Skoda, Bentley and Lamborghini, would launch a new electric vehicle "virtually every month" starting in 2019.
"This is how we intend to offer the largest fleet of electric vehicles in the world, across all brands and regions, in just a few years," he said at Volkswagen's annual media conference, according to a news release.
Global demand for electric cars is still only a tiny fraction of new-car sales, and it is far from certain that the huge investments Volkswagen and other car manufacturers are making are going to pay off.
"The absolute numbers are still small," Mr. Muller told reporters Tuesday. "But that will change at the latest when the first models of the next e-generation come to market."
The shift to electric comes after Volkswagen pleaded guilty in 2016 to rigging millions of diesel-powered cars to cheat emissions tests and was forced to pay about $25 billion in fines, penalties and compensation.
Now, Volkswagen is back to churning out a profit. Its net income more than doubled last year to 11.4 billion euros ($14.1 billion), and its revenue rose 6% to 230.7 billion euros.
For 2018, Volkswagen said it expects revenue to rise as much as 5%.
The company has already invested nearly half the 50 billion euros it has earmarked for batteries as it ramps up electric-vehicle output.
It has secured battery supply from China's Contemporary Amperex Technology Co. and South Korea's Samsung SDI Co. and LG Chem Ltd.
Traditional auto makers' aggressive push into the electric-car market is putting pressure on Tesla. While the technology leader is having trouble boosting production of its Model 3, Volkswagen already has a global network of more than 100 factories and years of experience.
Volkswagen's new electric-car plants will use standard underlying technology to create greater scale and cut costs.
Using this strategy, Volkswagen's brands are planning to launch 50 new electric models and 30 new hybrids by 2025, and to create electric versions of the company's entire range of more than 300 models by 2030.
Credit: By William Boston and Max Bernhard
Subject: Fines & penalties; Automobile industry; Factories; Electric vehicles
Location: China United States--US Europe South Korea
People: Muller, Matthias
Company / organization: Name: Volkswagen AG; NAICS: 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2018
Publication date: Mar 14, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2013460385
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2013460385?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-14
Database: The Wall Street Journal
Tesla's Make-Or-Break Moment Is Fast Approaching; The auto maker is racing to meet an ambitious production target for its Model 3 sedan
Author: Higgins, Tim; Pulliam, Susan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Mar 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Elon Musk recently told attendees at the South by Southwest festival that two things are keeping him up at night: an apocalyptic future created by artificial intelligence, and production delays
of Tesla Inc.'s Model 3 car.
Mr. Musk has good reason to worry about Tesla. The auto maker is entering one of the most critical phases in its history, a make-or-break period in which Tesla must boost production of the Model 3 or possibly face severe financial consequences.
In April, Tesla will reveal whether it is on track to meet an ambitious second-quarter target
of producing 5,000 Model 3s a week--a goal that it already twice delayed. The Model 3 is Tesla's mainstream electric-car offering, priced more affordably than Tesla's luxury models, and a key part of Mr. Musk's strategy to broaden the company's business.
Meeting the goal of 5,000 Model 3s a week by the end of June is critical to generating enough cash to sustain operations without having to raise more capital. Tesla burned through on average about $1 billion a quarter last year, largely because of heavy investments to bring production of the Model 3 online. That left it with nearly $3.4 billion in cash at year-end, suggesting that at a similar pace it would be out of cash later this year unless it can raise more funds or substantially boost production.
UBS analyst Colin Langan calculates that Tesla will continue burning cash until it reaches the 5,000-a-week inflection point for a quarter, a milestone that he calculates would generate about $1 billion in working capital in the short term.
If Tesla can't meet the goal, it would face greater pressure to raise money from the debt or equity markets, which could be challenging if investors lose confidence. Tesla says it has $2 billion in unused credit facilities and funds, though some of the capital is subject to specific conditions for use. However, it also faces higher interest payments tied to $10 billion in debt and increased costs associated with the production ramp.
Since going public in 2010, Tesla has burned through about $10 billion in cash, an unusually large sum for a publicly traded U.S. company of its size, said Bernstein analyst Toni Sacconaghi. Tesla has a market capitalization of roughly $57 billion.
Barclays analyst Brian Johnson expects the company to raise more money in the third quarter if it proves it can build 5,000 Model 3s a week--a rate equating to roughly 250,000 vehicles in a single year, about what a typical automotive factory produces.
Mr. Musk said at SXSW that Tesla is "making good progress" on Model 3 production. He is grappling with these challenges after losing a number of financial executives. In recent days, Tesla's chief accounting officer and treasurer both left, following last year's exit of the financial chief and last month's departure of the top sales executive.
The company declined to make Deepak Ahuja, who rejoined as chief financial officer last year, available to comment.
Mr. Musk has repeatedly defied the odds. At SXSW on Sunday, he recounted how Tesla nearly went into bankruptcy in 2008 when money ran tight. Although many investors shorted the stock over the years, he proved Tesla could build a global luxury brand of electric cars with a devoted following beyond environmentalists.
But Tesla is no longer a startup. It is a 38,000-person company that is trying to compete with the world's largest auto makers. Mr. Musk has eschewed operating profit and racked up debt as he chases his dream of making a mainstream electric sedan. He had earlier pledged to deliver 500,000 vehicles this year, about five times last year's total.
These hurdles have weighed on Tesla's stock. Its share price has stalled since surging in early 2017 to give it a market value rivaling General Motors Co. The stock has fallen about 14% since around the time it began production of the Model 3 nine months ago.
"Some big investors are losing patience," said Nathan Weiss of Unit Economics, a research arm of investment firm Weiss, Harrington & Associates LLC, which has a bearish bet on Tesla but doesn't own shares. "They are less excited about it than they were a year ago."
Some investors are watching indicators of credit strength that are generally regarded as a gauge of a company's likelihood of bankruptcy, such as the "Altman Z-Score," which was developed by a New York University professor, Edward Altman in the late 1960s.
Based on the Z-Score formula--which takes into account a number of variables, including share price, working capital, retained earnings and other items--Tesla had a score of 1.26, its lowest score for any quarter since 2014. Any company with a score below 1.8 is considered distressed by many investors. A score of 1.0 or lower suggests bankruptcy is likely within two years.
Three of Tesla's 10 largest shareholders have recently sold shares of the auto maker, according to the shareholders' latest quarterly filings. Fidelity Investments, the second-largest Tesla shareholder behind Mr. Musk with a nearly 10% stake, sold close to one-third of its shares in the final three quarters of 2017, filings show. A Fidelity spokesman declined to comment.
Other shareholders have piled in. T. Rowe Price Group Inc. more than doubled its stake in the fourth quarter, making it the fourth-largest owner of Tesla shares.
Write to Tim Higgins at Tim.Higgins@WSJ.com and Susan Pulliam at susan.pulliam@wsj.com
Credit: By Tim Higgins and Susan Pulliam
Subject: Automobile industry; Stockholders; Investments; Working capital; Electric vehicles; Bankruptcy
Location: United States--US New York
People: Musk, Elon Altman, Edward
Company / organization: Name: New York University; NAICS: 611310; Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930; Name: Fidelity Investments; NAICS: 523120, 523920, 525110, 525910; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Mar 15, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2014070480
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2014070480?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-17
Database: The Wall Street Journal
Tesla Faces Crunch As Cash Hoard Thins
Author: Higgins, Tim; Pulliam, Susan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]16 Mar 2018: A.1.
ProQuest document link
Abstract: None available.
Full text: SAN FRANCISCO -- Tesla Inc. is entering one of the most critical phases in its history, a make-or-break period in which the electric-car maker must boost production of its new Model 3 or possibly face severe financial consequences.
In April, Tesla will reveal whether it is on track to meet an ambitious second-quarter target of assembling 5,000 Model 3s a week -- a goal that it already twice delayed. The Model 3 is Tesla's first mainstream offering, priced more affordably than its luxury models, and an important part of founder Elon Musk's strategy to broaden the brand's business.
Meeting the goal of 5,000 Model 3s a week by the end of June is crucial to generating enough cash to sustain operations without having to raise more capital.
Tesla burned through about $1 billion a quarter last year on average, largely because of heavy investments to bring production of the Model 3 online. That left it with nearly $3.4 billion in cash at year's end, suggesting that at a similar pace it would run out of cash later this year unless it can raise more funds or substantially boost production at its Fremont, Calif., plant.
UBS analyst Colin Langan projects Tesla will continue to burn cash until it reaches the 5,000-a-week inflection point for a quarter, a milestone that he calculates would generate about $1 billion in working capital in the short term.
If Tesla can't meet the goal, it will face greater pressure to raise money from the debt or equity markets, which could be challenging if investors lose confidence in the company. Tesla says it has $2 billion in unused credit facilities and funds, though some of the capital is subject to specific conditions for use. However, it also faces higher interest payments tied to $10 billion in debt and increased costs associated with the production ramp-up.
Since going public in 2010, Tesla has used about $10 billion in cash, an unusually large sum for a publicly traded U.S. company of its size, said Bernstein analyst Toni Sacconaghi. Tesla has a market capitalization of roughly $57 billion.
Barclays analyst Brian Johnson expects Tesla to raise more money in the third quarter if it proves it can build 5,000 Model 3s a week -- a rate equating to roughly 250,000 vehicles in a single year, about what a typical automotive factory produces.
Mr. Musk told attendees at the recent South by Southwest festival in Texas that two things keep him up at night: an apocalyptic future created by artificial intelligence -- and production delays of the Model 3. He said Tesla is "making good progress" on Model 3 production.
He is grappling with these challenges after losing a number of financial executives. In recent days, Tesla's chief accounting officer and treasurer both left, following last year's exit of the financial chief and last month's departure of the top sales executive. Tesla declined to make Deepak Ahuja, who rejoined the company as chief financial officer last year, available to comment.
Mr. Musk has repeatedly defied the odds. At SXSW on Sunday, he recounted how Tesla nearly went into bankruptcy in 2008 when money ran tight. Although many investors over the years bet against the stock through short sales, he proved Tesla could build a global luxury brand of electric cars with a devoted following beyond environmentalists.
But Tesla is no longer a startup. It is a 38,000-person company that is trying to compete with the world's largest auto makers. Mr. Musk has eschewed operating profit and racked up debt as he chases his dream of making a mainstream electric sedan.
Mr. Musk earlier pledged to deliver 500,000 vehicles this year, about five times last year's total. Analysts surveyed by FactSet estimate, on average, that Tesla might deliver a total of 258,000 vehicles this year, including 157,000 Model 3s.
These hurdles have weighed on Tesla's stock. Its share price has stalled since surging in early 2017 to give it a market value rivaling General Motors Co. The stock has fallen about 14% since around the time it began production of the Model 3 nine months ago.
"Some big investors are losing patience," said Nathan Weiss of Unit Economics, a research arm of investment firm Weiss, Harrington & Associates LLC, which has a bearish bet on Tesla but doesn't own shares. "They are less excited about it than they were a year ago."
Some investors are watching indicators of credit strength that are generally regarded as a gauge of a company's likelihood of bankruptcy, such as the "Altman Z-Score," which was developed by a New York University professor, Edward Altman, in the late 1960s.
Based on the Z-Score formula -- which takes into account a number of variables, including share price, working capital, retained earnings and other items -- Tesla had a score of 1.26, its lowest score for any quarter since 2014. Any company with a score below 1.8 is considered distressed by many investors. A score of 1.0 or lower suggests bankruptcy is likely within two years.
Three of Tesla's 10 largest shareholders have recently sold shares, according to the shareholders' latest quarterly filings. Fidelity Investments -- the second-largest Tesla shareholder behind Mr. Musk, with a nearly 10% stake -- sold close to one-third of its stake in the final three quarters of 2017, filings show. A Fidelity spokesman declined to comment.
Other shareholders have piled in. T. Rowe Price Group Inc. more than doubled its stake in the fourth quarter, making it the fourth-largest owner of Tesla shares.
Credit: By Tim Higgins and Susan Pulliam
Subject: Stockholders; Investments; Working capital; Electric vehicles; Bankruptcy
Location: Texas New York United States--US
People: Musk, Elon Altman, Edward
Company / organization: Name: New York University; NAICS: 611310; Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930; Name: Fidelity Investments; NAICS: 523120, 523920, 525110, 525910; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2018
Publication date: Mar 16, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2014910453
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2014910453?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-19
Database: The Wall Street Journal
Tesla Investors OK Plan That Could Pay Musk Billions; Package valued at $2.6 billion seeks to keep billionaire at helm while tying pay to electric car maker's ambitious growth plans
Author: Armental, Maria
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Mar 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc.'s shareholders approved a pay package that could deliver more than $50 billion to Chief Executive Elon Musk, as the electric-car maker seeks to keep the billionaire in the driver's seat
while tying his pay to ambitious goals for the company's growth.
The vote passed by a large margin, according to a source present at the meeting.
Under the plan, Tesla's market value needs to skyrocket to $650 billion over 10 years for all the options to vest. The 46 year-old Mr. Musk also must stay at Tesla either as chief executive or executive chairman and chief product officer to receive the package, which was initially valued at about $2.6 billion.
As of Tuesday, the last trading day before today's special meeting, Tesla's market capitalization stood at $52 billion.
The plan, modeled on a 2012 pay package, includes more than 20 million in stock options that would vest in 12 tranches, each with shares equal to 1% of the company's total shares outstanding as of Jan. 21.
At the time of the 2012 award, Tesla had a market value of about $3.2 billion and then targeted a market value of $43.2 billion
, pointing to the then much larger market valuations of rivals Ford Motor Co. and General Motors Co. It has since surpassed both companies in market value.
As with the 2012 award, the latest pay package ties Mr. Musk's compensation to the company's value reaching certain levels and a series of operational milestones being met.
For example, for the first tranche of options to vest, Tesla's market valuation would have to reach $100 billion and achieve either $20 billion in revenue or $1.5 billion in earnings before interest, taxes, depreciation and amortization, after adjusting for stock compensation.
In 2017, Tesla's Ebitda stood at $528.5 million and revenue at $11.76 billion, according to Thomson Reuters data.
Tesla has said the pay package would be key to achieve its road map, what it calls its "Master Plan, Part Deux."
"The Board believes that the Award will continue to incentivize and motivate Elon to lead Tesla over the long-term, particularly in light of his other business interests," Tesla said in a securities filing this month.
Mr. Musk, Tesla's largest shareholder whose fortune Forbes estimates at some $20 billion
, is also CEO and lead designer of Space Exploration Technologies Corp., or SpaceX as the developer and manufacturer of space launch vehicles is known, and is also involved in other emerging technology ventures.
Proxy-advisory firms Institutional Shareholder Services Inc. and Glass Lewis & Co. had recommended Tesla shareholders vote against the package, calling it too costly.
"Even when annualized, Musk's pay opportunity would dwarf that of nearly every CEO at the largest and most profitable public companies. This raises even more questions given that Musk doesn't devote his full-time attention to Tesla, and serves as the CEO of multiple other high-profile companies
," ISS had said.
The Silicon Valley company, which has yet to turn an annual profit, has a lot riding on its Model 3 car, a key part of Mr. Musk's strategy to remake Tesla from a niche luxury-car company into a mainstream player
that sells electric vehicles, solar panels and storage batteries.
Tim Higgins contributed to this article.
Write to Maria Armental at maria.armental@wsj.com
Credit: By Maria Armental
Subject: Automobile industry; Chief executive officers; Stockholders; Awards & honors; Electric vehicles
Location: Silicon Valley-California
People: Musk, Elon
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Institutional Shareholder Services Inc; NAICS: 511210, 541690; Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Mar 21, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2015889579
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2015889579?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-21
Database: The Wall Street Journal
Tesla Investors OK Plan That Could Pay Musk Billions; Package valued at $2.6 billion seeks to keep billionaire at helm while tying pay to electric car maker's ambitious growth plans
Author: Armental, Maria
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Mar 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc.'s shareholders approved a pay package that could deliver more than $50 billion to Chief Executive Elon Musk, as the electric-car maker seeks to keep the billionaire in the driver's seat
while tying his pay to ambitious goals for the company's growth.
The package passed by a wide margin, according to a securities filing.
Under the plan, Tesla's market value needs to skyrocket to $650 billion over 10 years for all the options to vest. The 46 year-old Mr. Musk also must stay at Tesla either as chief executive or executive chairman and chief product officer to receive the package, which was initially valued at about $2.6 billion but could yield him more than $50 billion.
Based on Wednesday's closing, Tesla's market value stood at $53.62 billion.
The plan, modeled on a 2012 pay package, includes more than 20 million in stock options that would vest in 12 tranches, each with shares equal to 1% of the company's total shares outstanding as of Jan. 21.
At the time of the 2012 award, Tesla had a market value of about $3.2 billion and then targeted a market value of $43.2 billion
, pointing to the then much larger market valuations of rivals Ford Motor Co. and General Motors Co. It has since surpassed both companies in market value.
As with the 2012 award, the latest pay package ties Mr. Musk's compensation to the company's value reaching certain levels and a series of operational milestones being met.
For example, for the first tranche of options to vest, Tesla's market valuation would have to reach $100 billion and achieve either $20 billion in revenue or $1.5 billion in earnings before interest, taxes, depreciation and amortization, after adjusting for stock compensation.
In 2017, Tesla's Ebitda stood at $528.5 million and revenue at $11.76 billion, according to Thomson Reuters data.
Tesla has said the pay package would be key to achieve its road map, what it calls its "Master Plan, Part Deux."
"The Board believes that the Award will continue to incentivize and motivate Elon to lead Tesla over the long-term, particularly in light of his other business interests," Tesla said in a securities filing this month.
Mr. Musk, Tesla's largest shareholder whose fortune Forbes estimates at some $20 billion
, is also CEO and lead designer of Space Exploration Technologies Corp., or SpaceX as the developer and manufacturer of space launch vehicles is known, and is involved in other ventures.
Proxy-advisory firms Institutional Shareholder Services Inc. and Glass Lewis & Co. had recommended Tesla shareholders vote against the package, calling it too costly.
"Even when annualized, Musk's pay opportunity would dwarf that of nearly every CEO at the largest and most profitable public companies. This raises even more questions given that Musk doesn't devote his full-time attention to Tesla, and serves as the CEO of multiple other high-profile companies
," ISS had said.
The Silicon Valley company, which has yet to turn an annual profit, has a lot riding on its Model 3 car, a key part of Mr. Musk's strategy to remake Tesla from a niche luxury-car company into a mainstream player
that sells electric vehicles, solar panels and storage batteries.
Tim Higgins contributed to this article.
Write to Maria Armental at maria.armental@wsj.com
Credit: By Maria Armental
Subject: Automobile industry; Chief executive officers; Stockholders; Electric vehicles
Location: Silicon Valley-California
People: Musk, Elon
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Institutional Shareholder Services Inc; NAICS: 511210, 541690; Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wal l Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Mar 22, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2016086942
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2016086942?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-22
Database: The Wall Street Journal
Management: Tesla Shareholders Approve CEO Musk's Hefty Pay Package
Author: Armental, Maria
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]22 Mar 2018: B.8.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc.'s shareholders approved a hefty pay package for Chief Executive Elon Musk that seeks to keep the billionaire in the driver's seat while tying his pay to ambitious goals for the company's growth.
The package passed by a large margin, according to a person present at the meeting.
Under the plan, Tesla's market value needs to skyrocket to $650 billion over 10 years for all the options to vest.
The 46-year-old Mr. Musk also must stay at the company either as chief executive or executive chairman and chief product officer to receive the package, which was initially valued at approximately $2.6 billion but could yield him more than $50 billion.
Based on Wednesday's closing, Tesla's market value stood at $53.62 billion.
The plan, modeled on a 2012 pay package, includes stock options that would vest in 12 tranches, each with shares equal to 1% of the company's total shares outstanding as of Jan. 21.
At the time of the 2012 award, Tesla had a market value of about $3.2 billion and then targeted a market value of $43.2 billion, pointing to the then much larger market valuations of rivals Ford Motor Co. and General Motors Co. Tesla has since surpassed both companies in market value.
As with the 2012 award, the latest pay package ties Mr. Musk's compensation to the company's value reaching certain levels and a series of operational milestones being met.
For example, for the first tranche of options to vest, Tesla's market valuation would have to reach $100 billion and achieve either $20 billion in revenue or $1.5 billion in earnings before interest, taxes, depreciation and amortization, after adjusting for stock compensation.
In 2017, Tesla's Ebitda stood at $528.5 million and its revenue at $11.76 billion, according to Thomson Reuters data.
Institutional Shareholder Services Inc. and Glass Lewis & Co. had recommended shareholders vote against the package.
Credit: By Maria Armental
Subject: Chief executive officers; Stockholders
People: Musk, Elon
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Institutional Shareholder Services Inc; NAICS: 511210, 541690; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.8
Publication year: 2018
Publication date: Mar 22, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2016333603
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2016333603?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-22
Database: The Wall Street Journal
Federal Safety Investigators Examine Another Fatal Tesla Crash; National Transportation Safety Board will look at whether semi-automated driving system was engaged
Author: Spector, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Mar 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: The National Transportation Safety Board has dispatched investigators to examine a fatal crash last week in California of a Tesla Inc. electric vehicle and determine whether its semi-automated driving system was engaged.
The NTSB, obliged increasingly to address questions surrounding the safety of driverless-car technologies, said Tuesday it was conducting a "field investigation" of the Friday crash near Mountain View, Calif., that resulted in the vehicle later catching fire.
"Unclear if automated control system was active at time of crash," the NTSB said in a social-media posting, in a reference to Tesla's Autopilot feature. "Issues examined include: post-crash fire, steps to make vehicle safe for removal from scene."
A man was killed in the accident, after his Tesla traveling south on Highway 101 collided with a barrier and was struck by two other vehicles, according to the California Highway Patrol.
Tesla's stock plunged
more than 8% in Tuesday trading.
"We have been deeply saddened by this accident, and we have offered our full cooperation to the authorities as we work to establish the facts of the incident," Tesla said in a statement.
The NTSB emphasized that the status of the Autopilot system at the time of the crash wasn't the main focus of its probe.
"This investigation is not focused on the automation, rather, it is focused on understanding the post-crash fire and the steps taken to make the vehicle safe for removal/transport from the scene," an NTSB spokesman said in an email message. "We are working with Tesla to determine if automation was in use at the time of the accident, but the focus of this field investigation is on the other two points."
Still, the NTSB has found itself increasingly scrutinizing emerging automated- driving technologies, adding to typical investigations the agency conducts of crashes involving aircraft, trains and buses, and other incidents.
The probe of the Tesla crash follows the NTSB's investigation of an Uber Technologies Inc. self-driving car that hit and killed a woman in Tempe, Ariz, last week. Arizona Gov. Doug Ducey late Monday barred Uber from further testing of self-driving vehicles in the state while authorities probe the crash. He called the incident an "unquestionable failure to comply" with expectations that companies testing autonomous-driving technology place a priority on safety.
The NTSB's first significant foray into automated-vehicle technology came in response to the May 2016 fatal crash of another Tesla vehicle using Autopilot on a Florida highway. The agency eventually found Tesla shared blame for the crash, noting the semiautonomous system allowed a driver to go long periods without his hands on the wheel and ignore the company's warnings. Officials also found Autopilot could be used on roads for which it wasn't designed, and that a hands-on-the-wheel detection system was a poor substitute for measuring driver alertness.
Tesla has said it places a priority on safety and contends Autopilot enhances it. The Palo Alto., Calif., company said after the NTSB findings in the 2016 crash that it would continue to be clear with current and potential customers that Autopilot doesn't render vehicles fully self-driving and that motorists must always remain attentive.
The NTSB also began recently investigating a Tesla vehicle that crashed in January into a firetruck near Culver City, Calif. The Tesla driver said the vehicle's Autopilot system was engaged at the time of the crash, according to local firefighters. The car struck the stationary firetruck while traveling at 65 miles an hour, the firefighters said.
Tim Higgins contributed to this article.
Write to Mike Spector at mike.spector@wsj.com
Related
* Uber to Let California Self-Driving-Car Permit Lapse
* Nvidia Halts Test of Self-Driving Tech Following Uber Crash
* Arizonans Rethink Self-Driving Experiment After Uber Crash
* Waymo Orders Up to 20,000 Jaguar SUVs for Driverless Fleet
* Tesla's Stock Slides Amid Crash Investigation
Credit: By Mike Spector
Subject: Aircraft accidents & safety; Investigations; Roads & highways; Automation; Vehicles
Location: Culver City California Arizona California Florida Palo Alto California
People: Ducey, Doug
Company / organization: Name: Uber Technologies Inc; NAICS: 511210, 518210; Name: National Transportation Safety Board; NAICS: 926120; Name: California Highway Patrol; NAICS: 922120; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Mar 27, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2018827043
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2018827043?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-28
Database: The Wall Street Journal
Tech Shares Send Market Lower; Amazon drops 4% amid fears of more oversight; Tesla down nearly 8%
Author: Ramkumar, Amrith; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Mar 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Shares of big technology firms came under more pressure Wednesday amid fears of increased regulatory oversight, pulling major indexes lower in another volatile session.
After powering
the broader market for the past year, technology and internet stocks have fallen recently, dragging the broader market down with them. The S&P 500's information technology sector has been the index's worst performer over the past week. The consumer discretionary sector, which houses such tech-focused giants as Amazon.com and Netflix, has also been hit hard.
Backlash over how social-media firms manage user data
and doubts that Facebook and Alphabet, the parent company of Google, can extend their dominance in digital advertising
have hurt sentiment in recent sessions. Those challenges have cropped up at a time when the prospect of higher interest rates and trade disruptions had already made investors nervous
about the tech sector, which is still up 24% over the past year.
"Those are the triggers that finally will force investors to look at the high valuations they've been paying for those stocks," said Wasif Latif, vice president of equity investments at USAA Asset Management, who prefers industrial, health-care and consumer stocks.
"Technology has been the poster child for growth, innovation and greater earnings, but has also been the poster child for higher [valuations]," he added.
The tech-heavy Nasdaq Composite dropped 59.58 points, or 0.9%, to 6949.23, underperforming the Dow industrials and the S&P 500. The Dow closed down 9.29 points, or less than 0.1%, at 23848.42, while the S&P 500 declined 7.62 points, or 0.3%, to 2605.00. All three indexes have fallen in five of the past six sessions.
Shares of Facebook, which have fallen 14% this month, rose 81 cents, or 0.5%, to $153.03 after the company said it would make it simpler
for users to examine and change some of their data tracked by Facebook.
Amazon was among the worst performers Wednesday in the S&P 500, losing 65.63, or 4.4%, to 1431.42 amid speculation that the White House wants to clamp down on the e-commerce giant's growing dominance. Axios reported
President Donald Trump is "obsessed with Amazon" and has discussed changing Amazon's tax treatment due to concerns about how the company is affecting mom-and-pop businesses.
Netflix, meanwhile, declined 14.92, or 5%, to 285.77, and Apple was down 1.86, or 1.1%, to 166.48 after Goldman Sachs analysts lowered their estimates of iPhone demand for the March and June quarters. Dozens of iPhone owners are also taking Apple to court
over the company's disclosure that it slowed down old phones to preserve battery life.
Tesla dropped 21.40, or 7.7%, to 257.78, extending
Tuesday's tumble
, amid an investigation into a fatal Tesla crash and following a Moody's Investors Service rating downgrade on the electric auto maker's debt.
Energy stocks fell alongside oil prices Wednesday after data showed inventories grew during the week ended March 23. The S&P 500 energy sector shed 2%.
With some riskier investments falling, some investors put money into bonds. The yield on the benchmark 10-year U.S. Treasury note fell to 2.777% from 2.790%, its lowest close since Feb. 6. Yields fall as prices rise.
Stocks hit record highs in late January
, but have since been dragged down by concerns over rising inflation, the prospect of tightening monetary policy by major central banks and the possibility of a global trade war.
Still, many investors aren't convinced markets have turned, citing strong economic growth around the world.
On Wednesday, fourth-quarter U.S. economic growth was revised to 2.9%,
higher than the previous estimate of 2.5%. Meanwhile, a survey showed that consumer sentiment in Germany, Europe's largest economy, was set to rise in April.
"The macro fundamentals haven't dropped off the table. They're where they've been over the last several years, and that's been a good place to be," said John Velis, macro strategist at State Street Global Markets.
Mr. Velis said he expects optimism about the global economy to contribute to further market swings, adding he wouldn't be surprised to see stocks yield mid-single digit returns in 2018.
Write to Amrith Ramkumar at amrith.ramkumar@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com
Related
* Streetwise: In Politics vs. Tech, Investors Are the Losers
* Heard on the Street: Tech Values Don't Fully Reflect Risk
* Tech Stocks Are Dominating Global Markets Like Never Before
* Regulatory Risks Rattle Tech Investors
* Is the Bear Market Here Yet?
* U.S. Growth Revised Up in Fourth Quarter
Credit: By Amrith Ramkumar and Georgi Kantchev
Subject: Central banks; Technology stocks; Stock exchanges
Location: New Zealand China United States--US Asia South Korea
People: Trump, Donald J
Company / organization: Name: European Central Bank; NAICS: 521110; Name: Facebook Inc; NAICS: 518210, 519130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Mar 28, 2018
column: U.S. Markets
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2018867751
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2018867751?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-29
Database: The Wall Street Journal
Federal Safety Investigators Examine Another Fatal Tesla Crash; National Transportation Safety Board will look at whether semi-automated driving system was engaged
Author: Spector, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Mar 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: The National Transportation Safety Board has dispatched investigators to examine a fatal crash last week in California of a Tesla Inc. electric vehicle and determine whether its semi-automated driving system was engaged.
The NTSB, obliged increasingly to address questions surrounding the safety of driverless-car technologies, said Tuesday it was conducting a "field investigation" of the Friday crash near Mountain View, Calif., that resulted in the vehicle later catching fire.
"Unclear if automated control system was active at time of crash," the NTSB said in a social-media posting, in a reference to Tesla's Autopilot feature. "Issues examined include: post-crash fire, steps to make vehicle safe for removal from scene."
A man died in the accident after his Tesla Model X sport-utility vehicle traveling south on Highway 101struck a barrier and was struck by two other vehicles, according to the California Highway Patrol.
Tesla's stock
plunged more than 8% in Tuesday trading.
"We have been deeply saddened by this accident, and we have offered our full cooperation to the authorities as we work to establish the facts of the incident," Tesla said in a statement.
Later Tuesday, Tesla said in a blog post on its website it hadn't yet been able to retrieve the vehicle's computer logs to understand what happened. It said the reason the crash was so severe is that the highway safety barrier designed to reduce impact had either been removed or previously crushed. "We have never seen this level of damage to a Model X in any other crash."
The NTSB stressed that the status of the Autopilot system at the time of the crash wasn't the main focus of its probe.
"This investigation is not focused on the automation, rather, it is focused on understanding the post-crash fire and the steps taken to make the vehicle safe for removal/transport from the scene," an NTSB spokesman said in an email message. "We are working with Tesla to determine if automation was in use at the time of the accident, but the focus of this field investigation is on the other two points."
Still, the NTSB has found itself increasingly scrutinizing emerging automated- driving technologies, adding to typical investigations the agency conducts of crashes involving aircraft, trains and buses, and other incidents.
The probe follows the NTSB's investigation of an Uber Technologies Inc. self-driving car that hit and killed a woman in Tempe, Ariz., last week
. Arizona Gov. Doug Ducey late Monday barred Uber from further testing of self-driving vehicles in the state
while authorities probe the crash. He called the incident an "unquestionable failure to comply" with expectations that companies testing autonomous-driving technology place a priority on safety.
The NTSB's first significant foray into automated-vehicle technology came in response to the May 2016 fatal crash of another Tesla vehicle using Autopilot on a Florida highway. The agency eventually found Tesla shared blame for the crash, noting the semiautonomous system allowed a driver to go long periods without his hands on the wheel and ignore the company's warnings. Officials also found Autopilot could be used on roads for which it wasn't designed, and that a hands-on-the-wheel detection system was a poor substitute for measuring driver alertness.
Tesla has said it places a priority on safety and contends Autopilot enhances it. The Palo Alto., Calif., company said after the NTSB findings in the 2016 crash that it would continue to be clear with current and potential customers that Autopilot doesn't render vehicles fully self-driving and that motorists must always remain attentive.
The NTSB also began recently investigating a Tesla vehicle that crashed in January into a firetruck near Culver City, Calif. The Tesla driver said the vehicle's Autopilot system was engaged at the time of the crash, according to local firefighters. The car struck the stationary firetruck while traveling at 65 miles an hour, the firefighters said.
Tim Higgins contributed to this article.
Write to Mike Spector at mike.spector@wsj.com
Related
* Tesla's Stock Slides Amid Crash Investigation
* Uber to Let California Self-Driving-Car Permit Lapse
* Nvidia Halts Test of Self-Driving Tech Following Uber Crash
* Arizonans Rethink Self-Driving Experiment After Uber Crash
* Waymo Orders Up to 20,000 Jaguar SUVs for Driverless Fleet
Credit: By Mike Spector
Subject: Aircraft accidents & safety; Fatalities; Investigations; Roads & highways; Automation; Vehicles
Location: Culver City California Arizona California Florida Palo Alto California
People: Ducey, Doug
Company / organization: Name: Uber Technologies Inc; NAICS: 511210, 518210; Name: National Transportation Safety Board; NAICS: 926120; Name: California Highway Patrol; NAICS: 922120; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Mar 28, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2018879435
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2018879435?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-31
Database: The Wall Street Journal
NTSB Sends a Team To Examine Tesla Crash
Author: Spector, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 Mar 2018: B.4.
ProQuest document link
Abstract: None available.
Full text: The National Transportation Safety Board has dispatched investigators to examine a fatal crash last week in California of a Tesla Inc. electric vehicle and determine whether its semi-automated driving system was engaged.
The NTSB, obliged increasingly to address questions surrounding the safety of driverless-car technologies, said Tuesday it was conducting a "field investigation" of the Friday crash near Mountain View, Calif., that resulted in the vehicle later catching fire.
"Unclear if automated control system was active at time of crash," the NTSB said in a social-media posting, in a reference to Tesla's Autopilot feature. "Issues examined include: post-crash fire, steps to make vehicle safe for removal from scene."
A man died in the accident, after his Tesla struck a barrier and was struck by two other vehicles, according to the California Highway Patrol.
Tesla's stock plunged more than 8% in Tuesday trading.
"We have been deeply saddened by this accident, and we have offered our full cooperation to the authorities as we work to establish the facts of the incident," Tesla said in a statement.
Later Tuesday, Tesla said in a blog post on its website it hadn't yet been able to retrieve the vehicle's computer logs to understand what happened. It said the reason the crash was so severe is that the highway safety barrier designed to reduce impact had either been removed or previously crushed. "We have never seen this level of damage to a Model X in any other crash."
The NTSB stressed that the status of the Autopilot system at the time of the crash wasn't the main focus of its probe.
---
Tim Higgins contributed to this article.
Credit: By Mike Spector
Subject: Aircraft accidents & safety; Fatalities; Automation; Vehicles
Location: California Arizona
People: Ducey, Doug
Company / organization: Name: Uber Technologies Inc; NAICS: 511210, 518210; Name: California Highway Patrol; NAICS: 922120; Name: National Transportation Safety Board; NAICS: 926120; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2018
Publication date: Mar 28, 2018
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2018962936
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2018962936?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-28
Database: The Wall Street Journal
Banking & Finance: Tesla's Stock Slides Amid Crash Investigation
Author: Eisen, Ben
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 Mar 2018: B.12.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. shares sank 8.2% on Tuesday, on a day when regulators said they were probing a fatal crash of one of the company's vehicles and a rating firm downgraded the electric-vehicle maker's debt.
The decline took the stock to its lowest closing level in a year, extendinga rout in one of the hottest U.S. tech firms of recent years, including a 46% gain last year. The company's bond prices also tumbled.
The U.S. National Transportation Safety Board said in a social-media posting that two investigators are conducting a field investigation into a fatal Tesla crash near Mountain View, Calif., last week. It was unclear if the automated control system on the vehicle was active when the crash happened.
The San Jose Mercury News reported that the driver of the Tesla died in the crash Friday morning when it hit a barrier separating the lanes.
A spokesperson for Tesla said in a statement: "We have been deeply saddened by this accident, and we have offered our full cooperation to the authorities as we work to establish the facts of the incident."
This is the most recent Tesla crash to attract investigators' attention to the auto maker's semi-autonomous system. The NTSB previously found that Tesla's autopilot shared some blame in a 2016 fatal crash. The auto maker has said its system improves safety.
The company's stock has fallen in 11 of the past 15 trading sessions, dropping 20% over the past month alone and trailing the S&P 500's 4.8% fall. Tesla, which makes electric vehicles, has burned through cash in recent years.
"We continue to believe that the Tesla investment thesis hinges on the company's ability to make the Model 3 profitably and deliver good initial build quality," said Bernstein analyst Toni Sacconaghi Jr. in a note to investors this month.
Those betting against the stock had a position worth about $9.4 billion this week, according to IHS Markit, making Tesla the most shorted U.S. stock in dollar terms. Demand to short the stock has increased through the recent selloff, the research firm said. Short sellers typically borrow a stock and sell it, hoping to buy it back at a lower price to return it. When the stock falls, as Tesla's has recently, they profit.
Moody's Investors Service also lowered its ratings on the company's debt further into junk territory late Tuesday. The corporate grade was dropped to B3 from B2, and its unsecured notes received a rating of Caa1, down from B3.
"Tesla's ratings reflect the significant shortfall in the production rate of the company's Model 3 electric vehicle," Moody's analysts wrote in the report. "The company also faces liquidity pressures due to its large negative free cash flow and the pending maturities of convertible bonds."
---
Tim Higgins and Charley Grant contributed to this article.
Credit: By Ben Eisen
Subject: Aircraft accidents & safety; Investigations; Electric vehicles
Location: United States--US
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Tesla Inc; NAICS: 336999; Name: National Transportation Safety Board; NAICS: 926120; Name: IHS Markit; NAICS: 511210, 519130, 541512, 541910
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.12
Publication year: 2018
Publication date: Mar 28, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2018963561
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2018963561?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-28
Database: The Wall Street Journal
The Clock Is Ticking Faster at Tesla; Downgrade of Tesla bonds puts Elon Musk in a tough position
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Mar 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Corrections & Amplifications
Moody's downgraded Tesla's debt on Tuesday afternoon. An earlier version of this article incorrectly stated the day of the week the downgrade took place.
Tesla will soon need money again. The trouble is, raising it suddenly looks a lot more challenging.
Moody's Investors Service downgraded Tesla's debt on Tuesday afternoon, citing persistently negative cash flow and continued production issues
with the Model 3 mass-market sedan. Moody's is keeping a negative outlook on the credit due to "the likelihood that Tesla will have to undertake a large, near-term capital raise in order to refund maturing obligations and avoid a liquidity shortfall."
Tesla's bonds due in 2025, issued just last summer, were quoted near 90 cents on the dollar after hours. Meanwhile, the stock is down 23% in about a month
, making equity more expensive. There are plenty of reasons that Tesla's magic touch with the capital markets is fading fast.
For starters, Tesla's financial statements paint an alarming picture of the group's long-term viability. Tesla had $3.4 billion in cash and equivalents at the end of the year and raised an additional $550 million from bonds backed by lease payments in February. Not all of that is available for spending. Customer deposits, which are mostly refundable, topped $850 million at last count.
Tesla burned more than $3.4 billion last year in free cash, defined as operating cash flow less capital expenditures. If that pace were to keep up, Tesla would run out of its usable cash before this year ends. Worse still, there is reason to believe the free cash burn figure was understated.
Tesla booked $666.5 million in upfront payments to install solar-energy systems as an investing cash outflow. That normally would be an operating expense, depressing free cash flow. Tesla also has managed to flatter its operating cash flow picture by stretching its working capital. Accounts payable grew by nearly $530 million in 2017 to about $2.4 billion, while accounts receivable grew by just $15 million. The difference generated more than half a billion in cash. That was a smart move to conserve resources, but the trouble is that eventually these suppliers will demand their money. They won't be comfortable if Tesla can't meet its forecast production rate of 2,500 Model 3 cars a week by the end of the first quarter.
Production issues are only one part of the Model 3 problem, however. The car doesn't seem to be in as high demand as Chief Executive Elon Musk once promised investors. Analysts at Bernstein said in a research note last week that fewer than 30% of customers who have been invited to take delivery of the Model 3 have actually done so.
And Tesla can't simply cut spending to solve its cash challenge if it hopes to ramp up production. The company has racked up about $10 billion in long- term debt and has $23 billion in total liabilities. To survive long term, Tesla needs to stop overpromising and to scale back its ambitions to goals it actually can achieve. Right now, though, it just needs more money.
More debt isn't a practical solution given the current bondholder losses. An equity raise is still possible, but the recent selloff across the tech sector won't help--nor will the fact that the reality of the Model 3 has so far proven to be much less attractive than the fantasy of yesteryear
.
If next week's delivery update is worse than feared, the odds of keeping the lights on through this year will get a lot longer.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Investments; Cash flow; Capital expenditures
People: Musk, Elon
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Mar 28, 2018
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2018981836
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2018981836?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-29
Database: The Wall Street Journal
Tesla Bonds Reach New Low, Stock Falls Further After Downgrade, Accident; Tesla is still highly valued by stock investors
Author: Goldfarb, Sam; Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Mar 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Corrections & Amplifications
An earlier version of this article misspelled the company Tesla as Telsa on first reference. (March 28. 2018)
Heavy selling of Tesla Inc. shares and bonds persisted Wednesday, posing a new challenge to the electric-car maker that has relied on the faith of investors to meet pressing cash needs.
The company's shares fell $21.40, or 7.7%, to $257.78, extending a weekslong decline that deepened Tuesday amid broad weakness among technology stocks, increased scrutiny of the company's semiautonomous driving system, and a credit-rating downgrade from Moody's Investors Service.
Tesla's 5.3% unsecured bonds that mature in 2025, issued last August when the company's stock price was near its height, touched a low of 86 cents on the dollar--translating to a 7.8% yield--before ticking up to 88 cents, according to MarketAxess.
The concerns about Tesla's value come as investors take a harsher look at some other companies that helped drive stock indexes to records earlier this year, including tech giants Facebook Inc. and Google parent Alphabet Inc.
The situation is especially noteworthy, because Tesla's near-term financial viability depends on its access to the capital markets. The company, investing heavily to bring out its mass-market Model 3 sedan, burned through on average about $1 billion in cash each quarter last year, and analysts expect a similar pace this year
until production kicks into a higher gear and generates new revenue.
Tesla's $1.8 billion unsecured bond issuance last August was part of a wide-ranging search for cash that has also involved repeated equity raises and sales of convertible bonds and asset-backed securities. Unlike most corporate-bond offerings, which are marketed based on credit metrics such as free cash flow and debt-to-earnings ratios, Tesla's bonds originally met strong demand from investors in part because of the company's eye-popping stock valuation, which suggested it could always raise cash from other sources.
Tesla's latest run as a stock-market darling has only recently met turbulence. Its shares soared 46% last year, pushing its market value above that of Ford Motor Co. and General Motors Co.--profitable auto makers with more than 100 years of experience and far more sales.
Investors endorsed Chief Executive Elon Musk's vision that Tesla will be at the vanguard of a world with all-electric cars that drive themselves.
That vision, however, is now being tested. On Tuesday, Waymo, the self-driving unit of Alphabet, said it would buy as many as 20,000 all-electric SUVs from Jaguar Land Rover to deploy as part of a robot taxi fleet. The deal is a direct threat to a Tesla self-driving technology unit that already has been racked with turnover.
Also on Tuesday, the National Transportation Safety Board opened a second investigation into a Tesla crash, this one a fatal incident last week near Mountain View, Calif. The agency said it is unsure if Tesla's semiautonomous system was in operation during the crash. Tesla, while touting the record of its Autopilot system, said it hadn't been able to access the vehicle's computer logs to understand what happened.
The Waymo announcement and NTSB investigation both help "reinforce our view that [Tesla] is behind the curve in autonomous driving," undercutting the bullish case for its stock, Brian Johnson, a longtime automotive-industry analyst for Barclays, wrote in a note to investors on Tuesday.
Adding to Tesla's woes, Moody's on Tuesday lowered its ratings on the company by one notch to B3. It cited Tesla's "large negative free-cash flow," looming debt maturities and "significant shortfall" in the production of its Model 3 car.
Investors should get better insight into Tesla's operations next week, when the company is expected to release first-quarter production numbers. Mr. Musk has targeted making 2,500 Model 3s a week by the end of this month on the way toward making 5,000 a week by the end of June, a goal he has twice postponed.
Tesla will continue burning cash until it maintains the 5,000-a-week pace for an entire quarter, UBS analyst Colin Langan has calculated.
Mr. Musk has long defied skeptics with his ability to create enthusiasm for an electric-car brand. "Tesla is absurdly overvalued if based on the past, but that's irrelevant," he wrote on Twitter last April when the auto maker overtook Ford in market value
. "A stock price represents risk-adjusted future cash flows."
Many investors remain optimistic about Tesla's prospects. Despite recent declines, Tesla's 5.3% bonds still trade comfortably above levels that would suggest investors are concerned about an imminent liquidity crisis. Its shares traded recently at roughly 3.6 times its sales from the last four quarters, compared with a price-to-sales ratio of 0.3 for Ford, according to FactSet.
This week's selloff "doesn't make us question the long-term thesis of the company," said Tasha Keeney, an analyst at Ark Investment Management, a New York-based investment firm focused on disruptive technologies that has been adding Tesla shares to funds in recent days.
Ark's projection is that falling lithium ion battery costs will make electric vehicles cheaper than gasoline-powered cars by the early 2020s--enough, Ms. Keeney said, to cause Tesla's stock to double over the next five years.
Write to Sam Goldfarb at sam.goldfarb@wsj.com and Tim Higgins at Tim.Higgins@WSJ.com
Related
* Heard: Clock Is Ticking Faster at Tesla
Credit: By Sam Goldfarb and Tim Higgins
Subject: Aircraft accidents & safety; Bond markets; Investments; Cash flow
Location: United States--US
People: Musk, Elon
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: National Transportation Safety Board; NAICS: 926120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Mar 28, 2018
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2019090436
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2019090436?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-29
Database: The Wall Street Journal
Tesla's Shares, Bonds Fall Further --- Its stock slides 7.7%, debt touches a low amid concerns about the company's value
Author: Goldfarb, Sam; Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Mar 2018: B.1.
ProQuest document link
Abstract: None available.
Full text: Heavy selling of Tesla Inc. shares and bonds persisted Wednesday, posing a new challenge to the electric-car maker that has relied on the faith of investors to meet pressing cash needs.
The company's shares fell $21.40, or 7.7%, to $257.78, extending a weekslong decline that deepened Tuesday amid broad weakness among technology stocks, increased scrutiny of the company's semiautonomous driving system, and a credit-rating downgrade from Moody's Investors Service.
Tesla's 5.3% unsecured bonds that mature in 2025, issued last August when the company's stock price was near its height, touched a low of 86 cents on the dollar -- translating to a 7.8% yield -- before ticking up to 88 cents, according to MarketAxess.
The concerns about Tesla's value come as investors take a harsher look at some other companies that helped drive stock indexes to records earlier this year, including tech giants Facebook Inc. and Google parent Alphabet Inc.
The situation is especially noteworthy, because Tesla's near-term financial viability depends on its access to the capital markets. The company, investing heavily to bring out its mass-market Model 3 sedan, burned through on average about $1 billion in cash each quarter last year, and analysts expect a similar pace this year until production kicks into a higher gear and generates new revenue.
Tesla's $1.8 billion unsecured bond issuance last August was part of a wide-ranging search for cash that has also involved repeated equity raises and sales of convertible bonds and asset-backed securities. Unlike most corporate-bond offerings, which are marketed based on credit metrics such as free cash flow and debt-to-earnings ratios, Tesla's bonds originally met strong demand from investors in part because of the company's eye-popping stock valuation, which suggested it could always raise cash from other sources.
Tesla's latest run as a stock-market darling has only recently met turbulence. Its shares soared 46% last year, pushing its market value above that of Ford Motor Co. and General Motors Co. -- profitable auto makers with more than 100 years of experience and far more sales.
Investors endorsed Chief Executive Elon Musk's vision that Tesla will be at the vanguard of a world with all-electric cars that drive themselves.
That vision, however, is now being tested. On Tuesday, Waymo, the self-driving unit of Alphabet, said it would buy as many as 20,000 all-electric SUVs from Jaguar Land Rover to deploy as part of a robot taxi fleet. The deal is a direct threat to a Tesla self-driving technology unit that already has been racked with turnover.
Also on Tuesday, the National Transportation Safety Board opened a second investigation into a Tesla crash, this one a fatal incident last week near Mountain View, Calif. The agency said it is unsure if Tesla's semiautonomous system was in operation during the crash. Tesla, while touting the record of its Autopilot system, said it hadn't been able to access the vehicle's computer logs to understand what happened.
The Waymo announcement and NTSB investigation both help "reinforce our view that [Tesla] is behind the curve in autonomous driving," undercutting the bullish case for its stock, Brian Johnson, a longtime automotive-industry analyst for Barclays, wrote in a note to investors on Tuesday.
Adding to Tesla's woes, Moody's on Tuesday lowered its ratings on the company by one notch to B3. It cited Tesla's "large negative free-cash flow," looming debt maturities and "significant shortfall" in the production of its Model 3 car.
Investors should get better insight into Tesla's operations next week, when the company is expected to release first-quarter production numbers.
Tesla will continue burning cash until it maintains the 5,000-a-week pace for an entire quarter, UBS analyst Colin Langan has calculated.
Mr. Musk has long defied skeptics with his ability to create enthusiasm for an electric-car brand. "Tesla is absurdly overvalued if based on the past, but that's irrelevant," he wrote on Twitter last April when the auto maker overtook Ford in market value. "A stock price represents risk-adjusted future cash flows."
Many investors remain optimistic about Tesla's prospects. Despite recent declines, Tesla's 5.3% bonds still trade comfortably above levels that would suggest investors are concerned about an imminent liquidity crisis.
This week's selloff "doesn't make us question the long-term thesis of the company," said Tasha Keeney, an analyst at Ark Investment Management, a New York-based investment firm focused on disruptive technologies that has been adding Tesla shares to funds in recent days.
Ark's projection is that falling lithium ion battery costs will make electric vehicles cheaper than gasoline-powered cars by the early 2020s -- enough, Ms. Keeney said, to cause Tesla's stock to double over the next five years.
Credit: By Sam Goldfarb and Tim Higgins
Subject: Automobile industry; Investments; Electric vehicles; Cash flow
Location: New York
People: Musk, Elon
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Alphabet Inc; NAICS: 551114; Name: Twitter Inc; NAICS: 519130; Name: National Transportation Safety Board; NAICS: 926120; Name: Jaguar Land Rover; NAICS: 336111; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930; Name: Facebook Inc; NAICS: 518210, 519130; Name: Google Inc; NAICS: 334310, 519130; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2018
Publication date: Mar 29, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2019270155
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docv iew/2019270155?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-29
Database: The Wall Street Journal
Tesla Recalls 123,000 Model S Cars Over Bolt Issue; Car maker discovered that certain corroding bolts in cold weather climates could lead to power-steering failure
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Mar 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. is voluntarily recalling about 123,000 Model S sedans globally after discovering that certain corroding bolts in cold weather climates could lead to a power-steering failure.
The Silicon Valley auto maker on Thursday said the recall, believed to be the company's largest ever, applies to Model S sedans built before April 2016. Tesla said the issue is known to have involved less than 0.02% of the potentially affected vehicles in the U.S.
Tesla has sold about 280,000 total vehicles through the end of last year.
"There have been no injuries or accidents due to this component, despite accumulating more than a billion miles of driving," according to an email being sent to customers by Tesla.
The recall to retrofit the power steering component adds to the string of challenges Chief Executive Elon Musk is dealing with as he tries to boost production of the Tesla's mass-market Model 3 sedan
and conserve the company's cash supply.
Moody's Investors Service this week downgraded Tesla's credit rating
, concerned that the company won't meet its first-quarter goal of making 2,500 Model 3s a week. The milestone is important because further delays could crimp Tesla's cash and threaten to derail Tesla's bid to build electric cars for the masses.
The downgrade, along with news this week that federal investigators were probing a fatal crash
of a Tesla car, have led to a heavy selloff of the company's shares and bonds, making it potentially more difficult to raise capital.
On Thursday, Tesla's stock rose 3.2%, to $266.13, during the regular trading session, and fell slightly in after-hours trading following the recall news. It has been a rough month for the stock, which has fallen about 20% over the 30-day period.
Tesla is expected to reveal first-quarter production results early next week.
The recall on Thursday only involves the Model S. Tesla said its service center in Montreal began noticing the issue in Model S sedans and attributed the corrosion to the calcium or magnesium salts used to treat roadways during the winter months. If the bolts fail, the car can still be steered but requires additional force.
"This primarily makes the car harder to drive at low speeds and for parallel parking, but does not materially affect control at high speed, where only small steering wheel force is needed," the company said.
The cost of the recall is expected to be minimal, Tesla said, with the supplier paying for the new part.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry
Location: Silicon Valley-California United States--US
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publicationyear: 2018
Publication date: Mar 29, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2019653044
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2019653044?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-04
Database: The Wall Street Journal
Tesla Issues Recall For 123,000 Sedans
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]30 Mar 2018: B.1.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. is voluntarily recalling about 123,000 Model S sedans globally after discovering that corrosion of certain bolts in cold-weather climates could lead to a power-steering failure.
The Silicon Valley auto maker on Thursday said the recall, believed to be the company's largest ever, applies to Model S sedans built before April 2016. Tesla said the issue is known to have involved less than 0.02% of the potentially affected vehicles in the U.S.
Tesla had sold about 280,000 total vehicles, including the company's other models, through the end of last year.
"There have been no injuries or accidents due to this component, despite accumulating more than a billion miles of driving," Tesla said in an email being sent to customers.
The recall to retrofit the power-steering component adds to the string of challenges Chief Executive Elon Musk is dealing with as he tries to boost production of Tesla's mass-market Model 3 sedan and conserve the company's cash supply.
Moody's Investors Service this week downgraded Tesla's credit rating, concerned that the company won't meet its first-quarter goal of making 2,500 Model 3s a week.
The milestone is important because further production problems could crimp Tesla's cash and undermine Tesla's bid to build electric cars for the masses.
The downgrade, along with news this week that federal investigators were probing a fatal crash of a Tesla car, have led to a heavy selloff of the company's shares and bonds, making it potentially more difficult to raise capital.
On Thursday, Tesla's stock rose 3.2%, to $266.13, during the regular trading session, and fell slightly in after-hours trading following the recall news. It has been a rough month for the stock, which has fallen about 20% over the 30-day period.
Tesla is expected to reveal first-quarter production results early next week.
The recall on Thursday involves only the Model S. Tesla said its service center in Montreal began noticing the issue in the sedans and attributed the corrosion to the calcium or magnesium salts used to treat roadways during the winter months. If the bolts fail, the car can still be steered but requires additional force.
"This primarily makes the car harder to drive at low speeds and for parallel parking, but does not materially affect control at high speed, where only small steering wheel force is needed," the company said.
The cost of the recall is expected to be minimal, Tesla said, with the supplier paying for the new part.
Tesla Inc. is voluntarily recalling about 123,000 Model S sedans globally after discovering that corrosion of certain bolts in cold-weather climates could lead to a power-steering failure.
The Silicon Valley auto maker on Thursday said the recall, believed to be the company's largest ever, applies to Model S sedans built before April 2016. Tesla said the issue is known to have involved less than 0.02% of the potentially affected vehicles in the U.S.
Tesla had sold about 280,000 total vehicles, including the company's other models, through the end of last year.
"There have been no injuries or accidents due to this component, despite accumulating more than a billion miles of driving," Tesla said in an email being sent to customers.
The recall to retrofit the power-steering component adds to the string of challenges Chief Executive Elon Musk is dealing with as he tries to boost production of Tesla's mass-market Model 3 sedan and conserve the company's cash supply.
Moody's Investors Service this week downgraded Tesla's credit rating, concerned that the company won't meet its first-quarter goal of making 2,500 Model 3s a week.
The milestone is important because further production problems could crimp Tesla's cash and undermine Tesla's bid to build electric cars for the masses.
The downgrade, along with news this week that federal investigators were probing a fatal crash of a Tesla car, have led to a heavy selloff of the company's shares and bonds, making it potentially more difficult to raise capital.
On Thursday, Tesla's stock rose 3.2%, to $266.13, during the regular trading session, and fell slightly in after-hours trading following the recall news. It has been a rough month for the stock, which has fallen about 20% over the 30-day period.
Tesla is expected to reveal first-quarter production results early next week.
The recall on Thursday involves only the Model S. Tesla said its service center in Montreal began noticing the issue in the sedans and attributed the corrosion to the calcium or magnesium salts used to treat roadways during the winter months. If the bolts fail, the car can still be steered but requires additional force.
"This primarily makes the car harder to drive at low speeds and for parallel parking, but does not materially affect control at high speed, where only small steering wheel force is needed," the company said.
The cost of the recall is expected to be minimal, Tesla said, with the supplier paying for the new part.
Credit: By Tim Higgins
Subject: Automobile industry
Location: Silicon Valley-California Montreal Quebec Canada United States--US
People: Musk, Elon
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2018
Publication date: Mar 30, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2019741006
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2019741006?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-30
Database: The Wall Street Journal
Tesla Says Autopilot Was Engaged in Fatal Crash Under Investigation in California; Vehicle's system shows driver had hands off the wheel for six seconds before striking highway divider
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Mar 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. late Friday acknowledged its semiautonomous Autopilot system was engaged by the driver in the seconds before a fatal crash last week, raising more questions about the safety of self-driving technology on public roads.
Federal investigators this week
began examining the March 23 crash of a Model X sport-utility vehicle that was traveling south on Highway 101, near Mountain View, Calif., before it struck a barrier, then was hit by two other vehicles and caught fire. The driver of the Model X was killed.
Tesla said its vehicle logs show the driver's hands weren't detected on the wheel for six seconds before the collision, and he took no action despite having five seconds and about 500 feet of unobstructed view of a concrete highway divider.
On Tuesday, the National Transportation Safety Board dispatched investigators to the scene, the second Tesla crash to attract the agency's attention this year. The NTSB, better known for its investigations into airplane crashes, has been increasingly scrutinizing the emergence of automated-driving technologies.
A 2016 fatal crash involving Tesla's Autopilot first raised questions about the system's abilities. The National Highway Traffic Safety Administration concluded Tesla's technology didn't contain a safety defect while the NTSB decided that the company shared blame in the crash by failing to include enough safeguards. In that crash, a Tesla Model S struck a tractor trailer crossing a road and the company said the system didn't see the white trailer against the bright sky.
The NTSB noted that Autopilot allowed a driver to ignore the company's warnings and go long periods without his hands on the wheel. Officials also found Autopilot could be used on roads for which it wasn't designed, and that a hands-on-the-wheel detection system
was a poor substitute for measuring driver alertness.
The most recent Tesla crash occurred five days after an Uber Technologies Inc. self-driving test car struck and killed a pedestrian walking her bicycle outside of a crosswalk late at night in Tempe, Ariz. Uber suspended testing
of its vehicles, and federal transportation agencies are investigating what happened.
The Uber crash stirred lawmakers to call for further regulation of driverless technologies, and prompted Toyota Motor Corp. and Nvidia Corp. to temporarily halt
their own testing of self-driving vehicles out of caution.
The incidents threaten to damage the public's perception of automation in vehicles as car makers and technology giants are spending billions of dollars in their pursuit to have robots controlling the wheel.
At the same time, many auto makers, including Tesla, are incorporating semiautonomous systems in their vehicles that allow drivers to take their hands off the wheel for periods of time.
Tesla has said Autopilot
, which can handle certain driving tasks, isn't a self-driving system and outlines to owners that the technology is designed to assist the driver who must remain in control at all times. But drivers have been know to grow overly confident in the system's abilities.
The company has said it places a priority on safety and contends Autopilot enhances it. In its statement on Friday, Tesla said there is one fatality for every 320 million miles in vehicles equipped with Autopilot hardware in the U.S., compared with one automotive fatality every 86 million miles across all vehicles in the country.
The heightened scrutiny of Tesla's technology comes as the company struggles to ramp up production of its latest mass-market sedan and as investors lose patience with the auto maker. This week, Moody's Investors Service downgraded Tesla's debt rating, citing an expected shortfall in the Model 3 production rate and a tight cash situation.
Tesla Chief Executive Elon Musk began selling vehicles in 2016 with hardware he said could one day be enabled to make the Tesla vehicle self-driving and promised to demonstrate a car capable of crossing the country in autonomous mode
by the end of last year--a goal he missed amid turnover on his Autopilot team.
Meanwhile, Waymo, the self-driving unit of Google parent Alphabet Inc., appears poised to outpace Tesla. The unit has announced plans to begin deploying a commercial robot taxi service later this year in the Phoenix metro area as well as an order for as many as 20,000 Jaguar electric sport-utility vehicles
to be part of its fleet beginning in 2020.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related Coverage
* Federal Safety Investigators Examine Another Fatal Tesla Crash
* Tesla's Stock Slides Amid Crash Investigation
* Uber to Let California Self-Driving-Car Permit Lapse
* Nvidia Halts Test of Self-Driving Tech Following Uber Crash
Credit: By Tim Higgins
Subject: Aircraft accidents & safety; Fatalities; Investigations; Traffic accidents & safety
Location: United States--US California
People: Musk, Elon
Company / organization: Name: Uber Technologies Inc; NAICS: 511210, 518210; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Alphabet Inc; NAICS: 551114; Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110; Name: National Transportation Safety Board; NAICS: 926120; Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Google Inc; NAICS: 334310, 519130; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Mar 31, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2019947963
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2019947963?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-01
Database: The Wall Street Journal
Tesla: Autopilot Was On in Fatal Crash --- NTSB is examining incident amid safety questions about new driving technologies
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]31 Mar 2018: B.1.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. late Friday acknowledged its semiautonomous Autopilot system was engaged by the driver in the seconds before a fatal crash, raising more questions about the safety of self-driving technology on public roads.
Federal investigators this week began examining the March 23 crash of a Model X sport-utility vehicle that was traveling south on Highway 101, near Mountain View, Calif., before it struck a barrier, then was hit by two other vehicles and caught fire. The driver of the Model X was killed.
Tesla said its vehicle logs show the driver's hands weren't detected on the wheel for six seconds before the collision, and he took no action despite having five seconds and about 500 feet of unobstructed view of a concrete highway divider.
On Tuesday, the National Transportation Safety Board dispatched investigators to the scene, the second Tesla crash to attract the agency's attention this year. The NTSB, better known for its investigations into airplane crashes, has been increasingly scrutinizing the emergence of automated-driving technologies.
A 2016 fatal crash involving Tesla's Autopilot, first raised questions about the system's abilities. The National Highway Traffic Safety Administration concluded Tesla's technology didn't contain a safety defect while the NTSB decided that the company shared blame in the crash by failing to include enough safeguards. In that crash, a Tesla Model S struck a tractor trailer crossing a road and the company said the system didn't see the white trailer against the bright sky.
The NTSB noted that Autopilot allowed a driver to ignore the company's warnings and go long periods without his hands on the wheel. Officials also found Autopilot could be used on roads for which it wasn't designed, and that a hands-on-the-wheel detection system was a poor substitute for measuring driver alertness.
The most recent Tesla crash occurred five days after an Uber Technologies Inc. self-driving test car struck and killed a pedestrian walking her bicycle late at night in Tempe, Ariz. Uber suspended testing of its vehicles, and federal transportation agencies are investigating what happened.
The Uber crash stirred lawmakers to call for further regulation of driverless technologies, and prompted Toyota Motor Corp. and Nvidia Corp. to temporarily halt their own testing of self-driving vehicles out of caution.
The incidents threaten to damage the public's perception of automation in vehicles as car makers and technology giants are spending billions of dollars in their pursuit to have robots controlling the wheel.
At the same time, many auto makers, including Tesla, are incorporating semiautonomous systems in their vehicles that allow drivers to take their hands off the wheel for periods of time.
Tesla has said Autopilot, which can handle certain driving tasks, isn't a self-driving system and outlines to owners that the technology is designed to assist the driver who must remain in control at all times. But drivers have been know to grow overly confident in the system's abilities.
The company has said it places a priority on safety and contends Autopilot enhances it. In its statement on Friday, Tesla said there is one fatality for every 320 million miles in vehicles equipped with Autopilot hardware in the U.S., compared with one automotive fatality every 86 million miles across all vehicles in the country.
The heightened scrutiny of Tesla's technology comes as the company struggles to ramp up production of its latest mass-market sedan and as investors lose patience with the auto maker.
Credit: By Tim Higgins
Subject: Aircraft accidents & safety; Fatalities; Investigations; Traffic accidents & safety
Location: United States--US
Company / organization: Name: Uber Technologies Inc; NAICS: 511210, 518210; Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110; Name: Tesla Inc; NAICS: 336999; Name: National Transportation Safety Board; NAICS: 926120
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2018
Publication date: Mar 31, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2019980857
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2019980857?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-03-31
Database: The Wall Street Journal
NTSB 'Unhappy' With Tesla Over Crash Disclosures; The rare public rebuke comes as the agency probes the recent crash involving its Autopilot technology
Author: Spector, Mike; Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: The National Transportation Safety Board expressed displeasure with Tesla Inc.'s recent disclosure that the company's semiautonomous driving system was activated before a fatal crash last month in California.
The agency, which dispatched a team last week to investigate the March 23 crash, said Sunday it is "unhappy" that Tesla revealed detailed information
it had gleaned from vehicle logs about the collision, including its suggestion that the driver had time to put his hands on the wheel and react.
Tesla declined to comment Sunday about the NTSB statement.
The rare rebuke from the U.S. agency, which investigates significant accidents involving various transportation modes, comes amid mounting scrutiny of partial and fully automated driving technologies. The NTSB is also probing the March 18 death of a pedestrian fatally struck
by an Uber Technologies Inc. self-driving vehicle with a safety operator behind the wheel in Tempe, Ariz.
Not long after the NTSB expressed its disapproval Sunday, Tesla Chief Executive Elon Musk joked on Twitter that the company was going bankrupt. "Despite intense efforts to raise money, including a last-ditch mass sale of Easter eggs, we are sad to report that Tesla has gone completely and totally bankrupt," he wrote. "So bankrupt, you can't believe it."
Mr. Musk's tweet, which doesn't appear to be in response to the NTSB, was timed for April Fools' Day and Easter. But it also comes at a particularly sensitive time for Tesla, which is also in a tight cash situation as it tries to ramp up production of its mass-market car, the Model 3.
Tesla is expected to report first-quarter vehicle sales numbers this week, and the market will be carefully examining the company's guidance on whether or not it can hit its oft-delayed goal, of producing 5,000 Model 3 cars each week, by the end of the second quarter. Analysts say that milestone is an inflection point for Tesla when the company can start generating cash.
Tesla's shares had surged over the past couple of years on the promise that Mr. Musk could not only deliver an all-electric car for the masses, but also fulfill his vision of creating cars that drive themselves.
Tesla's disclosure on Friday that the semiautonomous system, called Autopilot, was engaged before the fatal crash near Mountain View, Calif., immediately reignited questions about the technology. A man was killed after his Tesla Model X sport-utility traveling southbound on Highway 101 collided with a barrier and was struck by two other vehicles, according to the California Highway Patrol.
Tesla late Friday said Autopilot was activated in the seconds leading up to the crash. The driver's hands weren't detected on the wheel for six seconds before the collision, the company said. Tesla said vehicle logs showed the driver took no action despite having five seconds and about 500 feet of unobstructed view of the concrete highway divider.
On Sunday, the NTSB said it needs Tesla to decode the data recorded by the vehicle. "In each of our [past] investigations involving a Tesla vehicle, Tesla has been extremely cooperative on assisting with the vehicle data," an agency spokesman said. "However, the NTSB is unhappy with the release of investigative information by Tesla."
The NTSB said it would probe all aspects of the crash, including suggestions the driver had expressed previous concerns about Autopilot. It said it would publish a preliminary report on the investigation, likely within a few weeks of completion of field work.
"We've been doing a thorough search of our service records and we cannot find anything suggesting that the customer ever complained to Tesla about the performance of Autopilot," Tesla said in a statement. "There was a concern raised once about navigation not working correctly, but Autopilot's performance is unrelated to navigation."
The NTSB probe won't necessarily lead to sanctions against the electric car company. The NTSB determines probable causes of accidents and makes recommendations to policy makers, but doesn't issue penalties or take other punitive actions.
Write to Mike Spector at mike.spector@wsj.com and Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Mike Spector and Tim Higgins
Subject: Aircraft accidents & safety; Investigations
Location: California United States--US
People: Musk, Elon
Company / organization: Name: Uber Technologies Inc; NAICS: 511210, 518210; Name: Twitter Inc; NAICS: 519130; Name: California Highway Patrol; NAICS: 922120; Name: National Transportation Safety Board; NAICS: 926120; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 2, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2020369426
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2020369426?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-02
Database: The Wall Street Journal
NTSB Rebukes Tesla in Wake of Crash
Author: Spector, Mike; Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Apr 2018: B.1.
ProQuest document link
Abstract: None available.
Full text: The National Transportation Safety Board expressed displeasure with Tesla Inc.'s recent disclosure that the company's semiautonomous driving system was activated before a fatal crash last month in California.
The agency, which dispatched a team last week to investigate the March 23 crash, said Sunday it is "unhappy" that Tesla revealed detailed information it had gleaned from vehicle logs about the collision, including its suggestion that the driver had time to put his hands on the wheel and react.
Tesla declined to comment Sunday about the NTSB statement.
The rare rebuke from the U.S. agency, which investigates significant accidents involving various transportation modes, comes amid mounting scrutiny of partial and fully automated driving technologies. The NTSB is also probing the March 18 death of a pedestrian fatally struck by an Uber Technologies Inc. self-driving vehicle with a safety operator behind the wheel in Tempe, Ariz.
Not long after the NTSB expressed its disapproval Sunday, Tesla Chief Executive Elon Musk joked on Twitter that the company was going bankrupt. "Despite intense efforts to raise money, including a last-ditch mass sale of Easter eggs, we are sad to report that Tesla has gone completely and totally bankrupt," he wrote. "So bankrupt, you can't believe it."
Mr. Musk's tweet, which doesn't appear to be in response to the NTSB, was timed for April Fools' Day and Easter. But it also comes at a particularly sensitive time for Tesla, which is also in a tight cash situation as it tries to ramp up production of its mass-market car, the Model 3.
Tesla is expected to report first-quarter vehicle sales numbers this week, and the market will be carefully examining the company's guidance on whether or not it can hit its oft-delayed goal, of producing 5,000 Model 3 cars each week, by the end of the second quarter. Analysts say that milestone is an inflection point for Tesla when the company can start generating cash.
Tesla's shares had surged over the past couple of years on the promise that Mr. Musk could not only deliver an all-electric car for the masses, but also fulfill his vision of creating cars that drive themselves.
Tesla's disclosure on Friday that the semiautonomous system, called Autopilot, was engaged before the fatal crash near Mountain View, Calif., immediately reignited questions about the technology. A man was killed after his Tesla Model X sport-utility traveling southbound on Highway 101 collided with a barrier and was struck by two other vehicles, according to the California Highway Patrol.
Tesla late Friday said Autopilot was activated in the seconds leading up to the crash. The driver's hands weren't detected on the wheel for six seconds before the collision, the company said. Tesla said vehicle logs showed the driver took no action despite having five seconds and about 500 feet of unobstructed view of the concrete highway divider.
On Sunday, the NTSB said it needs Tesla to decode the data recorded by the vehicle. "In each of our [past] investigations involving a Tesla vehicle, Tesla has been extremely cooperative on assisting with the vehicle data," an agency spokesman said. "However, the NTSB is unhappy with the release of investigative information by Tesla."
The NTSB said it would probe all aspects of the crash, including suggestions the driver had expressed previous concerns about Autopilot. It said it would publish a preliminary report on the investigation, likely within a few weeks of completion of field work.
"We've been doing a thorough search of our service records and we cannot find anything suggesting that the customer ever complained to Tesla about the performance of Autopilot," Tesla said in a statement. "There was a concern raised once about navigation not working correctly, but Autopilot's performance is unrelated to navigation."
The NTSB probe won't necessarily lead to sanctions against the electric car company. The NTSB determines probable causes of accidents and makes recommendations to policy makers, but doesn't issue penalties or take other punitive actions.
Credit: By Mike Spector and Tim Higgins
Subject: Aircraft accidents & safety; Autonomous vehicles; Accident investigations
Location: California
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999; Name: National Transportation Safety Board; NAICS: 926120; Name: California Highway Patrol; NAICS: 922120
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2018
Publication date: Apr 2, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2020439166
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2020439166?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-11
Database: The Wall Street Journal
Tesla, Uber Deaths Raise Questions About the Perils of Partly Autonomous Driving; Humans were behind the wheel in fatal crashes, raising questions of complacency
Author: Higgins, Tim; Spector, Mike; Colias, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Two recent fatal crashes of cars with varying levels of autonomous-driving technology are focusing attention on vehicles that vest control in both humans and machines.
U.S. investigators are still completing their probes of an Uber Technologies Inc. self-driving vehicle with a safety operator behind the wheel that hit and killed a pedestrian
March 18 in Tempe, Ariz., and of a Tesla Inc. Model X sport-utility with its semiautonomous system engaged that collided with a highway barrier
on March 23 near Mountain View, Calif., fatally injuring its driver.
But both incidents have a troubling link, autonomous-vehicle specialists say: a human was at the wheel and could have taken control.
"This is what I've called the mushy middle of automation," said Bryant Walker Smith, a University of South Carolina assistant professor of law and specialist on autonomous cars, referring to vehicles with some automation but still a driver at the wheel. "There will certainly be more incidents," he said. "It's dangerous when people feel safer than they actually are."
Auto makers are gradually rolling out partially automated systems that pass control back and forth between vehicle and driver. General Motors Co., Volkswagen AG's Audi brand, and others have or plan to introduce systems that allow the driver to cede control of the car in certain situations, only to resume command at a moment's notice.
Such automation could make driving safer. But some autonomous-vehicle experts and safety advocates worry that as long as the effort is a combination of human and machine, the robot assistance could also give drivers a false sense of confidence to turn their attention elsewhere.
Others, such as GM, say driver monitoring ensures a driver remains engaged, while Tesla has developed a series of alerts aimed at keeping hands on the wheel and emphasizes in its manuals that drivers need to remain alert and responsible for driving.
Concerns about a human driver being lulled into complacency is what led Google to scrap plans for a semiautonomous system and to focus efforts on building a vehicle system capable of driving without a person at the wheel
, an effort now under way at the Waymo unit of Alphabet Inc., also the parent of Google. Waymo has pointed to a 2015 regulatory study that found some drivers took 17 seconds to retake control of a vehicle, a duration that would have allowed the car to travel more than a quarter mile at highway speeds.
Auto makers, tech companies and regulators contend robot vehicles promise to ultimately cut traffic fatalities, which surpassed 37,000 in the U.S. in 2016, according to the latest government data. Human error causes 94% of crashes, according to regulators.
The companies are pressing to develop new services like driverless taxis and automated long-haul trucking that could collectively create a business opportunity valued in the trillions of dollars, analysts say.
GM believes services built around driverless cars one day could reap more money than its business today, finance chief Chuck Stevens told analysts in November. He said a robot taxi service could generate 20% to 30% profit margins by 2025, several times more than the 8.8% pretax margin it earned globally last year.
Few auto makers predict they will sell fully driverless cars soon. Yet, they fear falling behind their rivals if they wait until systems are so advanced they don't require human drivers, said Mark Wakefield, the leader of AlixPartners LLP's automotive practice. "You can lose by not participating at all," he said.
So in the meantime, they are outfitting vehicles with semiautonomous features such as automatic braking, adaptive cruise control and lane-keeping systems. In some cases they are on the cusp of rolling out more advanced hands-free driving systems that can handle increasingly complex driving tasks, such as passing slower cars on the highway, while handing control back to the driver when the computer can't handle a more complicated situation.
Audi is aiming to release a new system in its sedans that would allow drivers to let go of the wheel and pedal in traffic jams
and turn their attention to, say, their email. Audi is "carefully evaluating" consumer acceptance of semiautonomous driving features and is waiting for better legal and regulatory clarity before introducing the system, a spokesman said.
Sachin Lawande, chief executive of automotive supplier Visteon Corp., said in a January interview that by 2020, he expects such technology to be so ubiquitous that it will be hard to sell a mainstream vehicle without such automated features.
The Uber self-driving test car that crashed in Tempe was being designed ultimately to be fully autonomous, but a human safety operator was at the wheel in case the robot brain got confused during testing. Video of the collision
suggested the driver was looking down seconds before the vehicle struck the pedestrian.
Tesla on Friday said its semiautonomous Autopilot system was active in the seconds before the recent fatal crash
. The driver's hands weren't on the wheel for six seconds before the SUV collided with a barrier. He took no action despite having five seconds and about 500 feet of unobstructed view of a concrete highway divider, Tesla said.
The National Transportation Safety Board, among the U.S. agencies probing the crash, on Sunday released a statement saying it was "unhappy with the release of investigative information by Tesla."
A Tesla spokeswoman declined to comment on the agency's remarks. On Monday, Chief Executive Elon Musk pushed back against the NTSB's statement, tweeting that while he has respect for the agency, it is an advisory body and doesn't regulate cars. "Tesla releases critical crash data affecting public safety immediately & always will," Mr. Musk wrote. "To do otherwise would be unsafe."
The NTSB said it would probe all aspects of the crash, including suggestions the driver had expressed previous concerns about Autopilot. Tesla said a thorough search of service records didn't find evidence the customer ever complained to the company about Autopilot. One concern was raised about navigation working incorrectly, but "Autopilot's performance is unrelated to navigation," Tesla said.
Autopilot isn't a fully autonomous system, Tesla says, and drivers retain responsibility to stay alert and maintain control of the vehicle, the company says in owners' manuals.
The Palo Alto., Calif., company has been aggressive in deploying semiautonomous driving technology, citing potential safety improvements as too important to delay. In a statement Friday, Tesla said its vehicles had driven the same stretch of highway with Autopilot engaged about 85,000 times since they were first deployed in 2015 without incident.
After a May 2016 fatal crash involving Tesla's Autopilot system
, the NTSB found a hands-on-the-wheel detection system was a poor substitute for measuring driver alertness. One recommendation that emerged from the NTSB probe was for companies to adopt cameras to monitor drivers.
GM designed its Super Cruise hands-free highway driving system on Cadillac vehicles with an infrared camera mounted on the steering column to detect whether drivers are alert. The technology provides escalating alarms to inattentive drivers, including an audible warning to retake the wheel, before disabling the system.
Hinrich Woebcken, head of Volkswagen's North American operations, said the industry is still grappling with the safety of having machines make critical decisions. "Technologically, we will always be more on the safer, more on the conservative side," he said last week at the New York International Auto Show.
Write to Tim Higgins at Tim.Higgins@WSJ.com , Mike Spector at mike.spector@wsj.com
and Mike Colias at Mike.Colias@wsj.com
Related
* Tesla Shares Sink as Musk Jokes About Bankruptcy
* Options Traders Brace For More Turmoil in Tesla
Credit: By Tim Higgins, Mike Spector and Mike Colias
Subject: Automobile shows; Fatalities; Traffic accidents & safety; Autonomous vehicles; Automobile safety; Robots; Automation; Traffic congestion
Location: United States--US New York Palo Alto California
People: Lawande, Sachin Stevens, Chuck
Company / organization: Name: Uber Technologies Inc; NAICS: 511210, 518210; Name: Visteon Corp; NAICS: 336390; Name: Alphabet Inc; NAICS: 551114; Name: AlixPartners LLC; NAICS: 541611; Name: National Transportation Safety Board; NAICS: 926120; Name: University of South Carolina; NAICS: 611310; Name: Volkswagen AG; NAICS: 336111, 336390; Name: Google Inc; NAICS: 334310, 519130; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 2, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2020458235
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2020458235?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-03
Database: The Wall Street Journal
Tesla Shares Sink as Musk Jokes About Bankruptcy; CEO's Aprils Fools tweet comes as electric-vehicle maker prepares to release hotly-anticipated production results
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. shares sank more than 7% Monday, suggesting investors were in no laughing mood over Chief Executive Elon Musk's bankruptcy jokes as the electric-vehicle maker grapples with the aftermath of a fatal crash and prepares this week to release production results.
The drop to $248 a share in early trading extended a selloff that has lopped off 36% from the stock since its peak in September.
Mr. Musk delivered his April Fools' tweet
("Tesla Goes Bankrupt"), in which he joked Tesla failed to raise enough cash in a last-ditch Easter Egg sale, at a time when his company's cash position is under real scrutiny. Last week, Moody's Investors Service downgraded Tesla's credit rating and cautioned about the company's outlook, citing concerns about cash levels.
Cash worries are nothing new for Tesla, but the stakes have grown as it has taken on more than $10 billion in debt. Mr. Musk avoided bankruptcy in 2008, which he often talks about publicly.
Tesla's report on first-quarter production results this week will provide insight into whether the car maker is on track to reach its target of making 5,000 Model 3 sedans a week by the end of June, a goal it already postponed twice.
The Model 3 sedan, which began assembly in July, was supposed to help the company reach 500,000 units overall this year, about five times what it sold last year. Tesla's target for the end of March was 2,500 Model 3s, a number the company likely missed, Philippe Houchois, an analyst for Jefferies, wrote in a research note Monday.
Mr. Musk's April Fools' Day tweet followed several tough days for Tesla. Since the market closed Thursday in New York, it announced what is believed to be its largest recall ever
over a possibly defective bolt in the Model S. It also was dealt a rebuke from the National Transportation Safety Board after it publicly released information
about a fatal crash involving its Autopilot system.
At about 3 p.m. Eastern Daylight Time on Sunday, Mr. Musk laid the groundwork for his mischief with a tweet saying important news was coming.
"Despite intense efforts to raise money, including a last-ditch mass sale of Easter Eggs, we are sad to report that Tesla has gone completely and totally bankrupt, you can't believe it," Mr. Musk posted at around 6 p.m. Mr. Musk followed up with additional postings, including one of him holding a sign that reads "Bankwupt!"
On Monday, Mr. Musk clarified his joke, tweeting
: "Obviously, I'm not going to do an April Fool's joke about going bankwupt if I thought there was a chance it would actually happen (sigh.)"
Tesla spokesmen didn't respond to a request for comment.
The Tesla CEO is a prolific user of Twitter. He often engages his followers, takes questions about the business and, at times, lobbies President Donald Trump on political issues.
Mr. Musk wasn't the only auto executive in an April Fools mood. Toyota Motor Corp.'s Lexus teamed up with 23andMe Inc. for a video about using DNA to customize cars. And Porsche AG said it would make a 700-horse-power electric tractor that "will be the fastest accelerating agricultural vehicle in the world."
Mr. Musk's humor, though, stood apart. "I've never heard of a CEO" joking about bankruptcy, David Whiston, an analyst for Morningstar Research Services LLC, said in an email.
Tesla finished the fourth quarter with $3.4 billion in cash and in 2017 had a negative free cash flow of about $1 billion on average, driven largely by spending to bring out the new Model 3. Analysts expect it will need to raise more money later this year.
Write to Tim Higgins at Tim.Higgins@WSJ.com
More
* Tesla, Uber Deaths Raise Questions About the Perils of Partly Autonomous Driving
* Options Traders Gear for More Tesla Turbulence
* NTSB 'Unhappy' With Tesla Over Crash Disclosures
Credit: By Tim Higgins
Subject: Automobile industry; Investments; Bankruptcy
Location: New York
People: Trump, Donald J Musk, Elon
Company / organization: Name: 23andMe Inc; NAICS: 541711; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Lexus; NAICS: 336111; Name: Twitter Inc; NAICS: 519130; Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110; Name: National Transportation Safety Board; NAICS: 926120; Name: Porsche AG; NAICS: 336111; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 2, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2020499844
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2020499844?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-02
Database: The Wall Street Journal
Tesla Stock Falls 5% After CEO's Jokes
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Apr 2018: B.2.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. shares sank more than 5% Monday, suggesting investors were in no laughing mood over Chief Executive Elon Musk's bankruptcy jokes as the electric-vehicle maker grapples with the aftermath of a fatal crash and prepares this week to release production results.
The drop to $252.48 a share extended a selloff that has lopped off 36% from the stock since its September peak.
Mr. Musk delivered his April Fools' tweet ("Tesla Goes Bankrupt"), in which he joked Tesla failed to raise enough cash in a last-ditch Easter Egg sale, at a time his company's cash position is under real scrutiny. Last week, Moody's Investors Service downgraded Tesla's credit rating and cautioned about the company's outlook, citing concerns about cash levels.
Cash worries are nothing new for Tesla, but the stakes have grown as it has taken on more than $10 billion in debt. Mr. Musk avoided bankruptcy in 2008, which he often talks about publicly.
Tesla's report on first-quarter production results this week will provide insight into whether the car maker is on track to reach its target of making 5,000 Model 3 sedans a week by the end of June, a goal it already postponed twice.
The Model 3 sedan, which began assembly in July, was supposed to help the company reach 500,000 units overall this year, about five times what it sold last year. Tesla's target for the end of March was 2,500 Model 3s, a number the company likely missed, Philippe Houchois, an analyst for Jefferies, wrote in a research note Monday.
Options traders are gearing up for more turbulence from Tesla. A measure of expected volatility in the stock is at the highest it has been over the past year, indicating that there could be more gyrations ahead. An options measure called skew -- a yardstick of how much it costs to protect against further stock declines -- is near a yearlong high for Tesla, Trade Alert data show.
Credit: By Tim Higgins
Subject: Investments; Bankruptcy
People: Musk, Elon
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2018
Publication date: Apr 3, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2020702911
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2020702911?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-03
Database: The Wall Street Journal
Tesla Misses Model 3 Production Goal but Shows Progress; Auto maker says current production of 2,020 Model 3s lays 'the groundwork' for ramping up effort
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. on Tuesday revealed it missed a crucial production goal for its new Model 3 sedan, though the auto maker showed progress toward building its first mass-market car and reassured investors about its capital needs.
The Silicon Valley auto maker said it produced 2,020 Model 3 cars in the past seven days--which includes two days in April--missing its goal of making 2,500 vehicles a week by the end of March.
Delaying that milestone adds more pressure for Tesla to crank up production to meet its oft-stated--and twice delayed--build rate of 5,000 Model 3 cars a week by the end of June. Analysts say that rate is an inflection point that enables Tesla to generate meaningful cash to support the business. Further delays could significantly squeeze Tesla's cash.
Tesla hedged its goal of reaching the 5,000-a-week rate, saying it continues to target the milestone "in about three months." On the plus side, the company is nearly tripling its weekly rate from three months ago, when it produced 793 in the final seven days of the year. And the company said it won't need to raise any debt or equity, apart from standard credit lines.
Its progress, the company said, lays "the groundwork for Q3 to have the long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow."
The Model 3 production rate looked good to David Whiston, an analyst for Morningstar Research Services LLC. "The key now is to keep the momentum going and get closer to scale," he said. "There's a long way to go."
Tesla is in one of the most critical phases in its history, a make-or-break period in which it must boost production of the Model 3 to prove it can create a car for the masses, or face severe financial consequences.
The company finished last year with $3.4 billion in cash on hand after its negative cash flow averaged about $1 billion a quarter on average--a pace analysts have said means the company would need to raise more money this year unless it significantly boosts production.
Shares of the auto maker, which have slumped in recent days, were recently up about 6%. The stock had fallen more than 36% since a peak in September when investors were enamored with Chief Executive Elon Musk's vision for electric-powered cars that could drive themselves.
Mr. Musk has a reputation for setting ambitious deadlines that he fails to meet on time, a practice that has become unsettling in recent months as Tesla's struggles have mounted.
Last week, Moody's Investors Service downgraded Tesla's credit rating
, concerned about the company's cash levels and production delays. "Prospects for addressing its liquidity requirements...will be supported if the company can establish credibility for reaching Model 3 production levels," Moody's said at the time.
The company last week also voluntarily recalled 123,000 Model S sedans
because of a possible power-steering failure, and revealed that a fatal crash involving
a Model X sport-utility vehicle on March 23 involved its semiautonomous driving system Autopilot.
During a troubled ramp up of the Model X SUV, Mr. Musk touted how he slept in a sleeping bag at the assembly plant. Tesla has run into snags at its Fremont, Calif., assembly plant and battery factory near Reno, Nev. On Monday, Mr. Musk said on Twitter he has returned to sleeping in a Tesla factory as he closely oversees production of the Model 3.
During the first quarter, Tesla said it made 9,766 Model 3s, up from 2,425 in the fourth quarter and 260 in the third. The latest data indicate it must have significantly boosted production in the final days of the quarter.
If it made about 2,000 Model 3s in the final week, that would leave it with roughly 7,800 units during the other 11 weeks of the quarter (not including one week when Tesla idled production). That would be an average of about 700 cars a week, less than the more than 1,000 a week Tesla said it was extrapolating during the final days of last year.
While Tesla focuses on the Model 3, production of its other two vehicles, the Model S sedan and Model X SUV, fell slightly to 24,728 during the three-month period, compared with about 25,000 a year ago. Combined deliveries of those two vehicles fell 13% to 21,800 from about 25,000 a year earlier.
Tesla delivered 8,180 Model 3s in the first quarter, giving the company a total of 29,980 deliveries during the period. More than 2,000 Model 3s were in transit and will be counted as sales next quarter, the company said.
Analysts surveyed by FactSet on average estimated Tesla would deliver 37,000 vehicles during the quarter, including 12,300 Model 3s. Several analysts expected Tesla to fall short of its 2,500-a-week Model 3 goal.
Demand for the Model 3 shouldn't be an issue. After revealing the sedan in 2016, reservations shot up to more than 400,000, though there are signs customers are getting impatient with the delays. In August, Tesla said it had a total of 455,000 net orders for the Model 3.
Net reservations remained stable during the quarter, Tesla said.
"The reasons for order cancellation are almost entirely due to delays in production in general and delays in availability of certain planned options, particularly dual motor AWD and the smaller battery pack," Tesla said.
Write to Tim Higgins at Tim.Higgins@WSJ.com
More
* Heard on the Street: Tesla's Model 3 Is No Model T
* U.S. Auto Sales Rose in March
* Car Makers Get Their Wish on Fuel-Efficiency Standards
Credit: By Tim Higgins
Subject: Lines of credit; Automobile industry
Location: Silicon Valley-California
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 3, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2020916130
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2020916130?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-04
Database: The Wall Street Journal
Tesla's Model 3 Is No Model T; First-quarter production is not as rosy as the electric-car marker believes
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: The fantasy that Tesla will one day dominate the global automotive industry is fading.
The struggling electric-car marker announced
it made 2,020 Model 3 sedans in the final week of the first quarter and plans to match that output next week. Tesla produced nearly 10,000 Model 3s in the first quarter, a fourfold increase from the previous quarter.
Yet even that final, frantic week's production fell short of Tesla's own guidance
--a familiar pattern. That didn't stop the company from congratulating itself in its press release. "This is the fastest growth of any automotive company in the modern era. If this rate of growth continues, it will exceed even that of Ford and the Model T."
Perhaps Tesla is right in terms of recent percentage growth, but the Tin Lizzie made up 40% of U.S. car sales at its peak or, proportionally speaking, 65,000 times the Model 3's best week so far.
The stock rose modestly Tuesday morning, which makes some sense; Tesla's shares have sold off sharply in recent weeks on production fears and some investors had feared worse production figures. That won't justify a rally for long, however. The details in Tesla's report deserve careful scrutiny.
For starters, Model 3 production averaged about 800 a week in the quarter, a far cry from mass market volumes. While Tesla exited the quarter with a much higher rate, the company hasn't issued total production guidance for the second quarter, though it said it would produce 5,000 cars a week in about three months. That calls the sustainability of the recent production burst into question, especially since Tesla reportedly shifted workers off its other assembly lines to focus on the Model 3 late in the quarter.
Perhaps as a result, Tesla's legacy product lines appeared to slow. Deliveries of the luxury Model S and Model X vehicles, which carry higher profit margins and can help keep the company's rickety finances afloat, fell by 12% from a year ago. Though Tesla said net orders for those cars hit a record in the first quarter, a 12% decline in actual deliveries doesn't exactly recall the glory days of Henry Ford.
Tesla also said an equity or debt raise isn't required this year beyond using its existing lines of credit. Weaning itself off constant tapping of the capital markets would indeed be a fantastic development for the company, but math says otherwise. Moody's Investors Service said Tesla will likely require a capital raise
exceeding $2 billion in the "near term" just last week.
Anyone tempted to bet on better times ahead would be wise to consider a recent statement from Elon Musk that wasn't in Tuesday's press release.
"Car biz is hell," he said in a message posted
on Twitter Monday afternoon.
Write to Charley Grant at charles.grant@wsj.com
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* Tesla Misses Model 3 Production Goal but Shows Progress
* Tesla Shares Sink as Musk Jokes About Bankruptcy
(April 2)
* Options Traders Brace For More Turmoil in Tesla
(April 2)
* NTSB 'Unhappy' With Tesla Over Crash Disclosures
(April 1)
Credit: By Charley Grant
Subject: Lines of credit; Automobile industry; Investments
Location: United States--US
People: Musk, Elon
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Twitter Inc; NAICS: 519130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 3, 2018
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2020989390
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2020989390?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-04
Database: The Wall Street Journal
Business News: Tesla Makes Halting Progress With Its Mass-Market Sedan
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Apr 2018: B.3.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. on Tuesday revealed it missed a crucial production goal for its new Model 3 sedan, though the auto maker showed progress with what is its first mass-market car and tried to reassure investors about its capital needs.
The Silicon Valley company said it produced 2,020 Model 3 cars in the previous seven days, which includes two days in April. It had been targeting 2,500 vehicles a week by the end of March.
The shortfall adds pressure on Tesla to meet its oft-stated -- and twice delayed -- goal of building 5,000 Model 3 cars a week by the end of June. Analysts say that rate is an inflection point, enabling Tesla to generate meaningful cash to support the business. Further delays could significantly squeeze Tesla's cash.
Tesla on Tuesday hedged on its 5,000-a-week goal, saying it continues to target that rate "in about three months." On the plus side, the company is close to tripling its weekly output as of three months ago, and it said it won't need to raise any debt or equity, apart from standard credit lines.
The company hailed its progress as laying "the groundwork for Q3 to have the long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow."
The Model 3 production rate looked good to David Whiston, an analyst for Morningstar Research Services LLC. "The key now is to keep the momentum going and get closer to scale," he said. "There's a long way to go."
After a weekslong decline, Tesla shares rose 6% to $267.53 on Tuesday. Its 5.3% unsecured bonds that mature in 2025 climbed to 88.25 cents on the dollar from 87 cents Monday, according to MarketAxess.
Tesla is in one of the most critical phases in its history, a make-or-break period in which it must boost production of the Model 3 to prove it can create a car for the masses, or face severe financial consequences.
The company finished last year with $3.4 billion in cash on hand after its negative cash flow averaged about $1 billion a quarter -- a pace analysts have said means the company would need to raise more money this year unless it significantly boosts production.
Shares of the auto maker have fallen more than 36% since a peak in September when investors were enamored with Chief Executive Elon Musk's vision for electric-powered cars that could drive themselves.
Mr. Musk has a reputation for setting ambitious deadlines that he fails to meet on time, a practice that has become unsettling in recent months as Tesla's struggles have mounted.
Recent share-price declines reflected broad weakness among technology stocks and increased scrutiny of Tesla's semiautonomous driving system after a fatal crash. Also, last week, Moody's Investors Service downgraded Tesla's credit rating, citing concern about the company's cash levels and production delays. Tesla also voluntarily recalled 123,000 Model S sedans because of a possible power-steering failure.
Credit: By Tim Higgins
Subject: Lines of credit; Automobile industry; Cash flow
Location: Silicon Valley-California
People: Musk, Elon
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2018
Publication date: Apr 4, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2021229419
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2021229419?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-04
Database: The Wall Street Journal
Home Solar Dims as Tesla, Others Curb Aggressive Sales; Growth slows for first time in more than a decade as installers pull back
Author: Gold, Russell
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: The number of U.S. homeowners putting solar panels on their roofs declined last year after leading installers including Tesla Inc. abandoned aggressive sales practices that had helped drive breakneck growth.
Residential solar had been on a tear, averaging 49% annual growth between 2010 and 2016, but the number of megawatts added last year dropped by 16% compared with the year before, according to new data from GTM Research, a firm that tracks renewable energy. It was the first annual decline since at least 2000, which is as far back as GTM tracks figures.
Industry executives and energy experts said the slowdown was driven by a sharp retreat by national solar installers, including Tesla's SolarCity and Vivint Solar Inc. Those big outfits had deployed large sales forces to pitch homeowners on the benefits of rooftop solar, and heavily marketed deals to lease panels that required little to no money down.
The race to build a dominant national solar brand led companies to burn through cash. Unable to maintain that pace, companies scaled back and focused on profits over growth, or in some cases, got out of the rooftop solar business altogether.
SolarCity, purchased by Tesla in 2016
, posted the largest declines. Once the clear-cut leader among solar installers, with one-third of the national market two years ago, it ended door-to-door sales last year and cut customer-acquisition spending. Its sales, as measured by megawatts deployed, fell by 38% in 2017, according to company figures, which include both residential and commercial installations.
Tesla said it was moving away from no-money-down leases and toward sales. It appears to have been passed by rival Sunrun Inc. in recent months as the top solar installer in the country, according to GTM.
"We expect growth to resume later this year," Tesla said last month.
Other companies also retreated from heavily marketing their home solar businesses, including NRG Energy Inc., which shut its business last year, and Vivint, which posted a 17% drop in residential sales volume in 2017 as it moved to prioritize profitability. Sungevity Inc. filed for bankruptcy protection last year after an aggressive growth strategy resulted in too much debt, the company said in a court filing.
The industry's sales strategies have attracted scrutiny by regulators in some states, including New Mexico, where the state attorney general, Hector Balderas, filed a lawsuit last month claiming that Vivint used "false, misleading and fraudulent statements" to sign customers up for long-term deals.
Rob Kain, Vivint's vice president of investor relations, said the company disagrees with the allegations and plans to contest them in court.
"Could we have had a salesperson who was aggressive? I wouldn't be surprised," Mr. Kain said, adding that the company would have fired a salesperson for misrepresentations.
SolarCity grew with help from a hard-charging sales culture. Before being acquired by Tesla, the company, which was run by Lyndon Rive, the cousin of Tesla founder Elon Musk, tapped salespeople from the mortgage industry and Las Vegas casinos to sell solar panels, and gave them aggressive quotas, according to current and former managers and employees interviewed by The Wall Street Journal.
Last year, Tesla changed course and began selling solar panels through the same stores that sell its cars. Other sales approaches were shut down in order to "focus on projects with better margins," the company said.
Eric White, president and chief executive of Dividend Finance, a San Francisco-based company that provides loans to homeowners putting solar on their roofs, said many solar companies acted too much like Silicon Valley firms, pursuing growth at all costs in hopes of becoming leaders in a nascent market.
Mr. White said that while the industry's prior growth is "not sustainable and leaves bodies in its tracks," 5%-to-15% annual increases are achievable.
Solar energy grew rapidly in recent years as the cost of solar panels declined. The all-in cost of a typical rooftop solar system fell by 61% between 2010 and 2017 to $2.80 per watt, or roughly $16,000 for the average home system, according to the federal government.
Solar executives and industry analysts believe annual residential solar growth will resume in 2018. But two developments risk hurting sales in coming years, say industry analysts. First, new Trump administration tariffs on imported solar modules, mostly from China, are expected to marginally raise costs
. Second, a federal government tax incentive to homeowners worth 30% of the value of the solar array is set to end by 2021.
Lynn Jurich, chief executive of Sunrun, said rising utility electricity rates and falling solar panel costs will drive increased interest in solar.
"We saw an unnaturally high growth rate because there was a lot of capital coming in to spend on advertising and customer origination, and not a lot of discipline on focusing on profitable growth," she said of the sector as a whole. "You suck all the advertising out of an industry and it shrinks."
Still, companies continue to spend considerable amounts acquiring customers. Sunrun estimates it spends about 28 cents on marketing for every dollar spent on purchasing and installing panels.
Sophie Karp, an analyst at Guggenheim Securities, said industrywide customer-acquisition costs were higher.
"Solar is not a product that you buy," she said. "It is a product that gets sold."
Kirsten Grind contributed to this article.
Write to Russell Gold at russell.gold@wsj.com
Related
* Heard on the Street: For Tesla, Deliver, Don't Promise, in 2018
(Dec. 30)
Credit: By Russell Gold
Subject: Photovoltaic cells; Electric rates; Costs; Alternative energy sources
Location: Silicon Valley-California New Mexico United States--US China Las Vegas Nevada San Francisco California
People: Jurich, Lynn Musk, Elon Rive, Lyndon
Company / organization: Name: Vivint Solar Inc; NAICS: 221114; Name: NRG Energy Inc; NAICS: 221122; Name: Wall Street Journal; NAICS: 511110; Name: Sungevity Inc; NAICS: 423720; Name: Tesla Inc; NAICS: 336999; Name: Guggenheim Securities; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 4, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2021255009
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2021255009?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-05
Database: The Wall Street Journal
China Targets Detroit, Hits Tesla and BMW Instead; Biggest victims of higher Chinese tariffs on U.S.-made cars would be BMW, Mercedes and Tesla
Author: Wilmot, Stephen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: China's apparent threat to tax U.S.-made cars more heavily would hit a different diplomatic target from the one intended: Germany. The one U.S. car maker that would be heavily affected is Tesla.
China already imposes a 25% tariff on imported cars. Whether the new 25% tariff would be in addition to the existing one is unclear. Liu He, President Xi Jinping's top economic adviser, had previously indicated that tariffs on imported cars would be reduced, most recently at Davos in late January.
If Chinese tariffs do rise
, in retaliation against the 25% tariffs U.S. President Donald Trump has threatened to impose
on $50 billion of Chinese imports, the worst affected would be car makers based in Germany, not Detroit.
China's restrictions on foreign ownership mean Western car makers cannot hold more than 50% of a local peer. To avoid the current 25% tariff, most manufacturers long ago set up joint ventures that produce locally. These required brands to share technology, but the scale of the opportunity made it hard to say no. China isn't just the world's largest car market but also one of its most profitable, and has proven a gold mine for early movers such as General Motors and Volkswagen.
As a result, most cars with Western nameplates sold in China are locally produced. The exceptions tend to be luxury cars whose buyers are happy to fork out. This is why BMW and Mercedes-owner Daimler would be far worse affected by any new tariff than GM or Ford Motor, whose premium brands are less developed.
BMW imported some three in 10 of the cars it sold in mainland China last year, and roughly two of those three were made at its factory in Spartanburg, S.C. These are the cars--typically SUVs--at risk in an all-out Sino-American trade war. The risk is mitigated by the company's decision to launch Chinese production of a popular SUV previously made exclusively in Spartanburg. The exposure of Daimler--whose largest investor is now Li Shufu, the owner of Chinese car maker Zhejiang Geely--is slightly lower, according to brokerage Bernstein.
Tesla is in a different category: China accounted for 17% of revenues last year even though all the electric-car specialist's vehicles are made in California and thus subject to the existing 25% tariff. Founder Elon Musk wants to sidestep the tax but is reluctant to cede control to a joint venture, which explains why he has been a vocal supporter of the White House's tough new China policy. He tweeted
to President Trump last month that the "current rules make things very difficult. It's like competing in an Olympic race wearing lead shoes."
China's tariff proposal, like the White House one, looks unlikely to survive in the hastily drafted form announced Wednesday morning. More likely is some kind of compromise. One thing that is clear: If China wants to hit President Trump where it hurts, it needs to find a better target.
Write to Stephen Wilmot at stephen.wilmot@wsj.com
Credit: By Stephen Wilmot
Subject: Automobile industry; Tariffs; Presidents
Location: United States--US Germany Detroit Michigan China California
People: Trump, Donald J Musk, Elon Xi Jinping Liu He Li Shufu
Company / organization: Name: Volkswagen AG; NAICS: 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 4, 2018
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2021424151
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2021424151?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-05
Database: The Wall Street Journal
At Quarter End, Tesla Suddenly Got Busy; Latest production numbers call into question electric-auto maker's claims that it's made major progress
Author: Rapoport, Michael
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla's first-quarter production figures underscored two things about the maker of electric cars: The company seems to pack lots of activity into the final days of its quarters, and it keeps having trouble meeting its hugely optimistic targets.
Tesla said Tuesday it had produced 2,020 of its Model 3 sedans in the previous seven days. What few noticed is that production for those seven days (which actually extended a bit into the second quarter) amounted to 21% of all the Model 3s Tesla built during the first quarter. That's well above the level it should have been if production ramped up more gradually during the quarter, as Tesla had predicted it would
in January.
Even so, the first quarter's production was not quite as backloaded as that of the previous quarter. Tesla produced 793 Model 3s
in the last week of 2017, which was one-third of all those it produced during the fourth quarter.
The production numbers
also call into question Tesla's assertion in January that it had made "major progress" toward addressing bottlenecks holding down its Model 3 production numbers.
Tesla said then that it had been producing Model 3s at the rate of more than 1,000 a week during the few days before its announcement. But the first-quarter numbers indicate that, minus the quarter's frantic final week, Tesla made 7,746 Model 3s from January through late March. Even after accounting for several short manufacturing shutdowns to upgrade equipment, that suggests average weekly production of well below 1,000 for most of the quarter.
Tesla hasn't done anything improper by boosting production at the end of a quarter. For years, companies have tried to make things look better before they release performance numbers to investors. But it is a sign that investors should look deeper to see what the company's performance is like most of the time, not just in the final days of March, June, September and December.
Tesla implied that it had changed its ways when it reported production numbers Tuesday, saying it expected to produce 2,000 Model 3s over the following seven days as well.
Even though it failed to reach its end-of-first-quarter goal
of producing 2,500 Model 3s a week, Tesla said Tuesday it continues to plan for a weekly production rate of 5,000 Models 3s around the end of the second quarter. Tesla workers should get ready for a busy week at the end of June.
Write to Michael Rapoport at Michael.Rapoport@wsj.com
Credit: By Michael Rapoport
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 4, 2018
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2021555188
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2021555188?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-04
Database: The Wall Street Journal
Small Tesla Contractor Sues Car Maker, Claiming Nonpayment; Lawsuit related to remediation work at California plant comes as Tesla works to ramp up Model 3 production
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: A small Tesla Inc. contractor has sued the auto maker claiming it hasn't been paid for work at a Fremont, Calif., assembly plant where Tesla is now trying to ramp up production of the Model 3 sedan.
American Integrated Services Inc. claims Tesla hasn't paid $513,473 for lead and asbestos abatement-related work under a $3.57 million contract signed in January 2016. It filed the lawsuit Tuesday in a California state court in Oakland.
Tesla called the matter "a minor commercial dispute."
"We paid AIS for all the work we authorized them to do," a Tesla spokesman said in a statement Friday. "The additional payment they're seeking is for work that we did not authorize and that clearly was unnecessary. When we asked for documentation showing that Tesla had authorized this unnecessary work, they were unable to provide it."
The claim comes as the auto maker faces questions about its cash level
while it spends heavily to ramp up production of the Model 3, a compact sedan that is designed to turn the electric-car maker from a niche player to one that sells to the masses.
Large automotive suppliers are generally loath to file claims against car makers and can often carry unpaid bills while its customer works to improve its situation, betting there will be future business to win. Small companies, however, can't always make that bet, or aren't willing to do so, especially if they don't expect to do further business with the car company.
Dennis Virag, a manufacturing consultant who has worked in the automotive industry for 40 years, said auto makers generally try to pay vendors quickly unless there is a dispute about the quality or fulfillment of a contract.
The lawsuit claims the contractor had an agreement to be paid within 30 days of receipt of invoices.
"Tesla purchased furnishing lead and asbestos abatement, demolition and removal and other environmental and remediation services, goods, materials, labor, supplies and equipment from on or about Feb. 19, 2017, to present," the lawsuit said.
A lawyer for American Integrated Services declined to comment, citing ongoing litigation.
Production of the Model 3 began last July and has failed to reach multiple milestones set by Tesla, including one last quarter to make as many as 2,500 sedans in a single week. Tesla on Tuesday worked to reassure investors
about its capital needs for the year, saying it was on track to ramp production to around 5,000 Model 3 cars a week in about three months and that would lay the ground work for "strong positive operating cash flow" in the third quarter.
"As a result, Tesla does not require an equity or debt raise this year, apart from standard credit lines," the company said in the quarterly sales report.
That update followed an April Fools' Day Twitter post
by Chief Executive Elon Musk that joked the company had gone bankrupt and a report from Moody's Investors Service last week downgrading Tesla's credit rating
, concerned about the company's cash levels and production delays.
The company finished last year with $3.4 billion in cash on hand after its negative cash flow averaged about $1 billion a quarter on average--a pace analysts have said means the company would need to raise more money this year unless it significantly boosts production.
Tesla has more than $10 billion in debt and its accounts payable has swelled to $2.39 billion at the end of the year from $1.86 billion a year earlier.
Following Tuesday's assurance that Tesla doesn't need to raise money, several analysts said they expect the company will do so later this year. Brian Johnson, an analyst for Barclays, wrote in a note to investors that he expected Tesla would need to raise $2.5 billion in the third quarter.
Andrew Scurria and Lisa Schwartz contributed to this article.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Lines of credit; Automobile industry; Cash flow; Litigation
Location: California
People: Musk, Elon
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Twitter Inc; NAICS: 519130; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 6, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2022299010
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2022299010?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-06
Database: The Wall Street Journal
Business News: Tesla Contractor Sues Over Bill
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 Apr 2018: B.3.
ProQuest document link
Abstract: None available.
Full text: A small Tesla Inc. contractor has sued the electric-car maker claiming it hasn't been paid for work at the Fremont, Calif., assembly plant where Tesla is trying to ramp up production of the Model 3 sedan.
American Integrated Services Inc. claims Tesla hasn't paid $513,473 for work on lead and asbestos abatement work under a $3.57 million contract signed in January 2016. It filed the lawsuit Tuesday in a California state court in Oakland.
Tesla called the matter "a minor commercial dispute."
"We paid AIS for all the work we authorized them to do," a Tesla spokesman said in a statement Friday. "The additional payment they're seeking is for work that we did not authorize and that clearly was unnecessary. When we asked for documentation showing that Tesla had authorized this unnecessary work, they were unable to provide it."
The claim comes as the auto maker faces questions about its cash level while it spends heavily to boost production of the Model 3, a compact sedan that is meant to transform Tesla from a niche player into one that sells its vehicles to the masses.
Large automotive suppliers are generally loath to file claims against car makers and will carry unpaid bills while a customer works through problems, betting there will be future business to win.
Small companies, however, can't always make that bet, or aren't willing to do so, especially if they don't expect to do further business with the car company.
Dennis Virag, a manufacturing consultant who has worked in the automotive industry for 40 years, said auto makers on the whole try to pay vendors quickly unless there is a dispute about the quality or fulfillment of a contract.
The California lawsuit claims the contractor had an agreement to be paid within 30 days of receipt of invoices.
"Tesla purchased furnishing lead and asbestos abatement, demolition and removal and other environmental and remediation services, goods, materials, labor, supplies and equipment from on or about Feb. 19, 2017, to present," the lawsuit said.
A lawyer for Wilmington, Calif.-based American Integrated Services declined to comment, citing ongoing litigation.
Production of the Model 3 began last July and has failed to reach multiple milestones set by Tesla, including one last quarter to make as many as 2,500 sedans in a single week. Tesla on Tuesday worked to reassure investors about its capital needs for the year, saying it was on track to reach a weekly rate of about 5,000 Model 3 cars in about three months, laying the ground work for "strong positive operating cash flow" in the third quarter.
"As a result, Tesla does not require an equity or debt raise this year, apart from standard credit lines," the company said in the quarterly sales report.
The company finished last year with $3.4 billion in cash on hand after its negative cash flow averaged about $1 billion a quarter -- a pace analysts have said means the company would need to raise more money this year unless it significantly boosts production.
Tesla has more than $10 billion in debt and its accounts payable swelled to $2.39 billion at the end of the year from $1.86 billion a year earlier.
---
Andrew Scurria and Lisa Schwartz contributed to this article.
Credit: By Tim Higgins
Subject: Lines of credit; Automobile industry; Cash flow; Litigation
Location: California
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2018
Publication date: Apr 7, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2022494336
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2022494336?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-07
Database: The Wall Street Journal
Car Dealerships Face Conundrum: Get Big or Get Out; In the age of Uber and Tesla, locally owned dealerships are becoming a thing of the past
Author: Roberts, Adrienne
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Americans who have been buying cars from the same mom-and-pop dealership for generations could be greeted by a different kind of for-sale sign the next time they visit.
Small to mid-size dealer groups are selling their businesses to auto-retail giants or investment firms at a robust clip even as auto sales remain strong. The trend--highlighted by Warren Buffett's entry
into the dealership business in 2014--has gathered momentum as electric, shared and autonomous vehicles threaten to reshape the car business.
Enessa Carbone recently sold the family's New York stores to Lithia Motors Inc., a publicly traded company with a $2.5 billion market capitalization. Her stores are among about 1,000 dealerships expected to have changed hands between 2014 and 2018, according to California dealer sell-side adviser Kerrigan Advisors.
"It is not your father's dealership," Ms. Carbone said after selling a business founded by her grandfather in the 1920s. "Given the changes in the industry we were not sure that was a challenge we wanted to have one of our children take on."
Dealers say they need to as much as triple revenue in the next half-decade to offset shrinking margins and increasing competition from companies that didn't exist a decade ago.
The internet has made car prices more transparent for customers and given them the ability to shop around. It has also enabled online purchases of used cars. Electric-car maker Tesla Inc. is using online ordering to circumvent dealerships entirely. And Uber Technologies Inc. envisions a world where more people will rely on ride-hailing apps instead of owning a car.
These developments have helped fuel consolidation of the 16,800 U.S. dealerships into the hands of fewer owners. The top 50 dealer groups are poised to book more than $175 billion in revenue this year, compared to $144 billion when Mr. Buffett's Berkshire Hathaway Inc. entered the sector four years ago, according to industry publication Automotive News.
Erin Kerrigan, founder of the Kerrigan advisory, said about 200 dealerships changed hands in 2017, near an all-time high with a similar level of transactions to take place this year. Sellers are scrambling to cash in while commercial real estate prices are high
, or partner with a deep-pocketed investor, she said.
Car makers, which can block a sale, historically resisted transactions with private-equity owners or family offices. But they have warmed to the idea as the business has become more capital intensive, thanks to the need to invest in new technologies and offerings, such as subscription services, as a way to diversify their businesses, according to Cliff Banks, founder of The Banks Report, which tracks automotive retail.
New England's Prime Motor Group is not a small business, but its former owner David Rosenberg realized it wasn't quite big enough to compete in this new era. He sold the company--which generated $1.5 billion in sales of cars, financing and service annually at 25 dealerships--to GPB Capital in September.
GPB Capital retained Mr. Rosenberg as chief executive of its automotive holding company. He's charged with expanding into new markets and raising annual revenue to $4.5 billion within five years.
"In order to survive and thrive you need scale and scope and access to capital," he said.
For many years, analysts said that the dealer business was too fragmented and localized for owners to get serious benefits from consolidation. But now, big dealer groups such as AutoNation Inc. and Group 1 Automotive Inc. see potential for economies of scale.
Mr. Rosenberg, for instance, is using investments from his Prime dealership's new owner to develop proprietary software for the dealership group, launch a finance company and potentially offer subscription services. Such a strategy could mirror Cadillac or Porsche AG, which charge a flat monthly fee to buyers for virtually unfettered use of a variety of vehicles.
Annual auto sales have hovered around 17 million for several years and are expected to stay in that range, and dealerships of all sizes are benefiting from a resurgence in sales of higher-priced pickups and SUVs thanks to falling gasoline prices.
Still, dealer margins are shrinking amid tough competition and the increased pricing transparency enabled by the Internet. Dealers took home about 2.5% of the selling price of the average new car in 2017, down from about 4.7% in 2009, according to data from the National Automobile Dealers Association; used-car margins slipped to 6.9% from 10.7% in 2009 during that period.
More potential headwinds loom. One example: Electric cars, which are expected to represent a growing chunk of U.S. sales in coming years, need less maintenance than their gasoline-powered counterparts because they don't have an engine or a transmission. That could cut into the revenue that dealers make from their service bays.
Further into the future, many analysts foresee a time when many more Americans choose not to own a car, relying instead on a fleet of hailable autonomous, electric vehicles, which could give dealerships a new purpose as a place for charging and housing vehicles during off hours.
As profit margins have declined, more of the value in each dealership is in the land it sits on
. In the past, owners often chose to hold on to their real estate and rent it to the person who bought their dealership. But commercial real-estate values in the U.S. have risen more than 25% above pre-recession highs, according to the real estate research firm Green Street Advisors, and this has owners increasingly wanting to sell everything.
Write to Adrienne Roberts at Adrienne.Roberts@wsj.com
Credit: By Adrienne Roberts
Subject: Automobile dealers; Electric vehicles; Gasoline prices; Advisors; Automobile sales
Location: New York United States--US England California
People: Buffett, Warren
Company / organization: Name: Uber Technologies Inc; NAICS: 511210, 518210; Name: Prime Motor Group; NAICS: 441110; Name: AutoNation Inc; NAICS: 441110; Name: Automotive News; NAICS: 511120; Name: Lithia Motors Inc; NAICS: 441110; Name: National Automobile Dealers Association; NAICS: 441110; Name: Berkshire Hathaway Inc; NAICS: 335210, 442210, 445292, 511110, 511130, 524126; Name: Group 1 Automotive Inc; NAICS: 441110; Name: Porsche AG; NAICS: 336111; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 8, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2022809326
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2022809326?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-09
Database: The Wall Street Journal
Why Courtney B. Vance Chose a Chevy Bolt Over a Tesla; The comforting 'Isle of Dogs' narrator on riding a folding bike when cabs refused to pick him up, his 1,100-page Kindle reads and why he wishes Apple was a little less pushy
Author: Kornelis, Chris
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: I love big biographies, like "Grant," Ron Chernow's new 1,100-pager, and Walter Isaacson's great book on Leonardo da Vinci. I take two or three years to go through 'em, but I read three or four at a time. I like to go back and forth between Audible and my Kindle app, where I take notes and underline things.
I like to travel simply with a small Bric's Bellagio carry-on spinner suitcase and its companion duffel that slips over the handle. I love to be able to pack things real tightly and just roll in there.
I have to have my camera when I walk out of the house. I've got a Sony A7S2 camera with a Sony Sel2470z lens. I'm always shooting on set. When I was doing "The People v. O.J. Simpson," they didn't have a set photographer most of the time, so the producers paid me for shots. I did the same thing when I was on Broadway with Tom Hanks in "Lucky Guy." It's a great ice breaker.
When my mother was alive we binge-watched everything on Netflix. I'd go down to our guesthouse, where she stayed, and watch shows with her. After "Breaking Bad" had gotten all its Emmys and was off the air, I said, "I think my mother may like this." She was glued.
I bought a Dahon Helios folding bike in 2003 when I was doing "Law & Order: Criminal Intent." There was no Uber back in the day. Black man in New York, you try to hail a cab at certain times of the day, it ain't happening. So, I had my folding bike. It's nice to tool around town, get some air and take some pictures.
I didn't feel like putting a thousand down and reserving a Tesla, so I got a 2017 Chevy Bolt (similar model shown). It's the best car I've ever had. It gets 230 miles to the charge, but people only drive 40, maybe 50 miles a day, so you just top off. No more gas. No more maintenance. It's quick and roomy inside. My kids love it. It's perfection.
I have an iPhone 6 S and I like my white earbuds--with the cord. I don't like that they're driving us to Bluetooth. The phone doesn't have a jack for the headphones. That bugs me. They should give us the option to be able to do both for a little while.
Edited from an interview by Chris Kornelis
Credit: By Chris Kornelis
Subject: Electronic book readers
Location: New York
People: Simpson, O J Leonardo Da Vinci (1452-1519) Isaacson, Walter Hanks, Tom
Company / organization: Name: Dahon; NAICS: 336991; Name: Netflix Inc; NAICS: 512120, 518210, 532230
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 10, 2018
column: My Tech Essentials
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2023467429
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2023467429?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-24
Database: The Wall Street Journal
Tesla Blames Driver in Fatal Car Crash; Company defended its Autopilot system as family of driver Walter Huang plans to file a wrongful death lawsuit
Author: Higgins, Tim; Spector, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. defended its semiautonomous Autopilot system in the wake of a fatal crash last month
, blaming the incident on the driver after his family hired a lawyer to explore legal options.
Walter Huang died on March 23 after the Model X sport-utility vehicle he was driving southbound on Highway 101 near Mountain View, Calif., collided with a barrier and was struck by two other vehicles. The auto maker a week later said that the SUV's Autopilot was activated in the moments leading up to the crash and that the driver's hands weren't detected on the wheel for six seconds before the crash.
On Wednesday, Tesla more explicitly assigned blame to the driver. "The crash happened on a clear day with several hundred feet of visibility ahead, which means that the only way for this accident to have occurred is if Mr. Huang wasn't paying attention to the road, despite the car providing multiple warnings to do so," a Tesla spokesman said in a statement.
Earlier on Wednesday, San Francisco-based Minami Tamaki LLP announced in a statement that the family had retained its services and plans to file a wrongful-death lawsuit. The family appeared on local television on Tuesday night defending Mr. Huang's driving.
"The firm believes Tesla's Autopilot feature is defective and likely caused Huang's death, despite Tesla's apparent attempt to blame the victim of this terrible tragedy," the law firm said in a statement.
Investigators for the National Highway Traffic Safety Administration and the National Transportation Safety Board are probing the crash. On April 1, the NTSB said it was unhappy
with Tesla for releasing detailed information about the crash.
NTSB Chairman Robert Sumwalt and Tesla Chief Executive Elon Musk had a recent discussion that appeared to defuse the tension. "Chairman Sumwalt had what he described as a very constructive conversation with Mr. Musk over the weekend," a spokesman for the NTSB said. "They discussed the investigation of the March 23 Tesla crash, NTSB investigative processes, and Tesla's work to address the safety recommendations that were issued last year as a result of the May 2016 Tesla crash in Williston, Florida." The latter was a reference to a fatal crash involving Autopilot for which the NTSB determined Tesla shared blame
.
Tesla declined to comment on the discussion.
The NTSB declined to comment on Tesla's defense of its technology in the most recent fatal crash, while NHTSA had no immediate comment. Separately, the NTSB spokesman said the agency was investigating a battery fire linked to a Tesla Model X SUV that crashed into a garage in Lake Forest, Calif., in August 2017. The NTSB is primarily interested in the battery fire in that incident, the spokesman said. Tesla declined to comment on the battery-fire probe.
Tesla's Wednesday statement intensified its defense of semiautonomous technology amid greater scrutiny of whether humans can remain alert while using these systems. Auto makers are rolling out partially automated systems that pass control back and forth between vehicle and driver, some with technology designed to keep the driver alert, such as eye-tracking technology. Others, like Alphabet Inc.'s Waymo, believe there should be no need for a human to take control in driving situations.
Autopilot, which is a collection of "driver assistance features," isn't a self-driving system. Tesla tells users in its owner's manual and in-vehicle display warnings that users need to remain alert and maintain control of the vehicle.
"We empathize with Mr. Huang's family, who are understandably facing loss and grief, but the false impression that Autopilot is unsafe will cause harm to others on the road," Tesla said Wednesday. "The reason that other families are not on TV is because their loved ones are still alive."
Tesla had said earlier that the driver took no action despite having five seconds and about 500 feet of unobstructed view of the concrete highway divider.
The 2016 fatal crash in Florida put Tesla's technology into the spotlight. The NTSB said Tesla shared partial blame for the crash, noting Autopilot allowed the driver to go long periods without his hands on the wheel and ignore the company's warnings. NHTSA, however, said the system wasn't defective and that Tesla vehicles' crash rate dropped by almost 40% after the auto-steer feature was installed. The vehicle in the 2016 accident was equipped with the auto-steer feature.
After the NTSB findings in the 2016 crash, Tesla said it would continue to be clear with current and potential customers that Autopilot doesn't render vehicles fully self-driving and that motorists must always remain attentive.
Write to Tim Higgins at Tim.Higgins@WSJ.com
More
* Tesla, Uber Deaths Raise Questions About the Perils of Partly Autonomous Driving
* Uber Suspends Driverless-Car Program After Pedestrian Is Killed
* Waymo Chief Confident Alphabet Unit's Self-Driving Technology Could Avoid Uber-like Incident
Credit: By Tim Higgins and Mike Spector
Subject: Aircraft accidents & safety; Fatalities; Investigations; Traffic accidents & safety; Vehicles
Location: Florida San Francisco California
People: Musk, Elon
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Alphabet Inc; NAICS: 551114; Name: Tesla Inc; NAICS: 336999; Name: National Transportation Safety Board; NAICS: 926120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 11, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2023826299
Document URL: https ://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2023826299?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-12
Database: The Wall Street Journal
Tesla Blames Driver in Fatal Crash
Author: Higgins, Tim; Spector, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Apr 2018: B.4.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. defended its semiautonomous Autopilot system in the wake of a fatal crash last month, blaming the incident on the driver after his family hired a lawyer to explore legal options.
Walter Huang died on March 23 after the Model X sport-utility vehicle he was driving southbound on Highway 101 near Mountain View, Calif., collided with a barrier and was struck by two other vehicles. The auto maker a week later said that the SUV's Autopilot was activated in the moments leading up to the crash and that the driver's hands weren't detected on the wheel for six seconds before the crash.
On Wednesday, Tesla more explicitly assigned blame to the driver. "The crash happened on a clear day with several hundred feet of visibility ahead, which means that the only way for this accident to have occurred is if Mr. Huang wasn't paying attention to the road, despite the car providing multiple warnings to do so," a Tesla spokesman said in a statement.
Earlier on Wednesday, San Francisco-based Minami Tamaki LLP announced in a statement that the family had retained its services and plans to file a wrongful-death lawsuit. The family appeared on local television on Tuesday night defending Mr. Huang's driving.
"The firm believes Tesla's Autopilot feature is defective and likely caused Huang's death, despite Tesla's apparent attempt to blame the victim of this terrible tragedy," the law firm said in a statement.
Credit: By Tim Higgins and Mike Spector
Subject: Automobile industry
Location: San Francisco California
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2018
Publication date: Apr 12, 2018
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2023899223
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2023899223?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-12
Database: The Wall Street Journal
Tesla, Safety Agency Feud Over Fatal-Crash Probe; Dispute puts auto maker on sidelines during official look at its semiautonomous driving system
Author: Spector, Mike; Higgins, Tim; Pasztor, Andy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: An unusual public feud between Tesla Inc. and federal accident investigators escalated Thursday over the examination of a fatal car crash, sidelining the auto maker from an official probe concerning its semiautonomous driving system.
In dueling explanations, Tesla and the National Transportation Safety Board clashed over whether the company withdrew or was removed as an official party to the agency's investigation into last month's crash of a Model X sport-utility vehicle that killed the driver near Mountain View, Calif.
The NTSB said Thursday that it tossed Tesla from the probe, asserting the auto maker violated a formal agreement when it released detailed information this week about the crash before government investigators had vetted it.
Tesla late Wednesday, and again on Thursday, contended it dropped out, saying restrictions on disclosures could jeopardize public safety by blocking the timely release of relevant information to the public including about its semiautonomous driving system, called Autopilot.
The safety board countered that its procedures call for immediate recommendations if emergency safety fixes are required.
The dispute between an unconventional Silicon Valley electric-car maker and a small government agency with outsize influence over transportation safety illustrates how both sides are grappling with new investigative and public-relations issues stemming from crashes of vehicles with driverless-car technologies.
The safety board, with five members confirmed by the Senate, is responsible for investigating accidents across various transportation modes and then issuing nonbinding recommendations to regulatory authorities.
Despite a sterling world-wide reputation for dissecting aviation disasters, the NTSB lacks extensive experience looking into the complexities of autonomous systems controlling passenger vehicles.
While the safety board has no regulatory mandate, over the years its findings and recommendations have shaped aviation, railroad and pipeline operations. It has relied on companies and unions to participate in accident probes by contributing technical expertise, but those so-called parties to federal investigations have to follow strict prohibitions against unilaterally giving out information to the public or prematurely announcing conclusions to the media.
Sen. Richard Blumenthal (D., Conn.), who has long delved into auto-safety issues, said Thursday he was "troubled by Tesla's reckless disregard" of its obligations to the NTSB. "If autonomous-vehicle manufacturers like Tesla cannot be trusted to fully cooperate, then it's clear that Congress must act," he said in a written statement.
Removals from NTSB party agreements are rare. The agency in 2014 revoked party status for United Parcel Service Inc. and a pilots union in the probe of a crash of one of the package-delivery company's cargo planes after public comments were made by each side about circumstances surrounding the accident.
For Tesla, a departure from the NTSB agreement risks diminishing the car maker's influence over and insight into an investigation that could ultimately reach critical conclusions about one of the company's signature products.
Tesla's pugnacity toward the NTSB reflects its iconoclastic approach to corporate communications that often involves Chief Executive Elon Musk assailing critics on Twitter, even to the point of joking about the company's financial ruin.
Unlike other car makers, Tesla doesn't shy from confronting government agencies. On Thursday, it repeated an earlier point Mr. Musk had tweeted, calling the NTSB an "advisory body" as opposed to a "regulatory" one and describing its own relationship with the National Highway Traffic Safety Administration, the main federal agency that oversees vehicle makers, "strong and positive."
Autopilot has garnered investor enthusiasm and helped Tesla at one point surpass General Motors Co. as the U.S.'s most valuable auto maker by market capitalization. The technology has also drawn scrutiny, though, with the NTSB determining after the May 2016 fatal crash of a Tesla car that Autopilot allowed a driver to go long periods without hands on the wheel and ignore warnings, among other shortcomings from the vehicle.
The NTSB is also investigating the January crash of a Tesla Model S into the back of a firetruck near Culver City, Calif. The vehicle's driver said Autopilot was engaged at the time of the crash, according to local firefighters. And the NTSB is probing the March 18 death of a pedestrian struck and killed in Arizona by an Uber Technologies Inc. self-driving car, though not a Tesla, that had a safety operator behind the wheel.
Tesla released information about the March 23 fatal crash under investigation several times recently, suggesting that the driver
, Walter Huang, was to blame because, though Autopilot was activated before the crash, he still had at least five seconds to take over the wheel before it collided with a highway barrier.
The NTSB said such releases can prompt "speculation and incorrect assumptions about the probable cause of a crash, which does a disservice to the investigative process and the traveling public."
NTSB Chairman Robert Sumwalt and Mr. Musk last Friday appeared to defuse tension, with the two men discussing the agency's investigative processes and recommendations U.S. investigators made after the May 2016 fatal Tesla crash, according to a letter released Thursday.
But on Wednesday, Tesla came out with a stronger statement defending Autopilot and blaming the incident on Mr. Huang after his family hired a lawyer to explore legal options.
"The crash happened on a clear day with several hundred feet of visibility ahead, which means that the only way for this accident to have occurred is if Mr. Huang wasn't paying attention to the road, despite the car providing multiple warnings to do so," the company said.
The NTSB said it alerted Mr. Musk to the decision to revoke the company's status as a party to the probe on Wednesday evening and through a letter delivered to the company the following day. "It is unfortunate that Tesla, by its actions, did not abide by the party agreement," Mr. Sumwalt said.
Tesla said Thursday it needed to correct "misleading claims that have been made about Autopilot" that suggested the technology undermined safety. The auto maker accused the NTSB of being "more concerned with press headlines than actually promoting safety" and releasing "partial bits of incomplete information to the media in violation" of its own rules.
Tesla said it would make an official complaint to Congress, as well as a public-records request to "understand the reasoning behind [the NTSB's] focus on the safest cars in America while they ignore the cars that are the least safe."
Mr. Musk has been aggressive in rolling out partially automated driving technology, contending it enhances safety when used correctly. He has been working on making Tesla vehicles capable of fully piloting themselves, and investors have bid up the company's stock partly because of Tesla's progress with automated-driving technology.
Write to Mike Spector at mike.spector@wsj.com , Tim Higgins at Tim.Higgins@WSJ.com
and Andy Pasztor at andy.pasztor@wsj.com
Read More
* Tesla Blames Driver in Fatal Car Crash
* Tesla, Uber Deaths Raise Questions About the Perils of Partly Autonomous Driving
* Uber Suspends Driverless-Car Program After Pedestrian Is Killed
* Waymo Chief Confident Alphabet Unit's Self-Driving Technology Could Avoid Uber-like Incident
Credit: By Mike Spector, Tim Higgins and Andy Pasztor
Subject: Aircraft accidents & safety; Agreements; Investigations; Cooperation
Location: Silicon Valley-California Culver City California United States--US San Francisco California
People: Musk, Elon
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Twitter Inc; NAICS: 519130; Name: National Transportation Safety Board; NAICS: 926120; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 12, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2024054660
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2024054660?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-12
Database: The Wall Street Journal
Tesla, Safety Agency Feud Over Fatal-Crash Probe; Dispute puts auto maker on sidelines during official look at its semiautonomous driving system
Author: Spector, Mike; Higgins, Tim; Pasztor, Andy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: An unusual public feud between Tesla Inc. and federal accident investigators escalated Thursday over the examination of a fatal car crash
, sidelining the auto maker from an official probe concerning its semiautonomous driving system.
In dueling explanations, Tesla and the National Transportation Safety Board clashed over whether the company withdrew or was removed as an official party to the agency's investigation into last month's crash of a Model X sport-utility vehicle that killed the driver near Mountain View, Calif.
The NTSB said Thursday that it tossed Tesla from the probe, asserting the auto maker violated a formal agreement when it released detailed information this week about the crash before government investigators had vetted it.
Tesla late Wednesday, and again on Thursday, contended it dropped out, saying restrictions on disclosures could jeopardize public safety by blocking the timely release of relevant information to the public including about its semiautonomous driving system, called Autopilot.
The safety board countered that its procedures call for immediate recommendations if emergency safety fixes are required.
The dispute between an unconventional Silicon Valley electric-car maker and a small government agency with sizable influence over transportation safety illustrates how both sides are grappling with new investigative and public-relations issues stemming from crashes of vehicles with driverless-car technologies.
The safety board, with five members confirmed by the Senate, is responsible for investigating accidents across various transportation modes and then issuing nonbinding recommendations to regulatory authorities.
Despite a sterling world-wide reputation for dissecting aviation disasters, the NTSB lacks extensive experience looking into the complexities of autonomous systems controlling passenger vehicles.
While the safety board has no regulatory mandate, over the years its findings and recommendations have shaped aviation, railroad and pipeline operations. It has relied on companies and unions to participate in accident probes by contributing technical expertise, but those so-called parties to federal investigations have to follow strict prohibitions against unilaterally giving out information to the public or prematurely announcing conclusions to the media.
Sen. Richard Blumenthal (D., Conn.), who has long delved into auto-safety issues, said Thursday he was "troubled by Tesla's reckless disregard" of its obligations to the NTSB. "If autonomous-vehicle manufacturers like Tesla cannot be trusted to fully cooperate, then it's clear that Congress must act," he said in a written statement.
Removals from NTSB party agreements are rare. The agency in 2014 revoked party status for United Parcel Service Inc. and a pilots union in the probe of a crash of one of the package-delivery company's cargo planes after public comments were made by each side about circumstances surrounding the accident.
For Tesla, a departure from the NTSB agreement risks diminishing the car maker's influence over and insight into an investigation that could ultimately reach critical conclusions about one of the company's signature products.
Tesla's pugnacity toward the NTSB reflects its iconoclastic approach to corporate communications that often involves Chief Executive Elon Musk assailing critics on Twitter, even to the point of joking about the company's financial ruin.
Unlike other car makers, Tesla doesn't shy from confronting government agencies. On Thursday, it repeated an earlier point Mr. Musk had tweeted, calling the NTSB an "advisory body" as opposed to a "regulatory" one and describing its own relationship with the National Highway Traffic Safety Administration, the main federal agency that oversees vehicle makers, "strong and positive."
Autopilot has garnered investor enthusiasm and helped Tesla at one point surpass General Motors Co. as the U.S.'s most valuable auto maker by market capitalization. The technology has also drawn scrutiny, though, with the NTSB determining after the May 2016 fatal crash of a Tesla car that Autopilot allowed a driver to go long periods without hands on the wheel and ignore warnings, among other shortcomings from the vehicle.
The NTSB is also investigating the January crash of a Tesla Model S into the back of a firetruck near Culver City, Calif. The vehicle's driver said Autopilot was engaged at the time of the crash, according to local firefighters. And the NTSB is probing the March 18 death of a pedestrian struck and killed in Arizona by an Uber Technologies Inc. self-driving car, though not a Tesla, that had a safety operator behind the wheel.
Tesla released information about the March 23 fatal crash under investigation several times recently, suggesting that the driver
, Walter Huang, was to blame because, though Autopilot was activated before the crash, he still had at least five seconds to take over the wheel before it collided with a highway barrier.
The NTSB said such releases can prompt "speculation and incorrect assumptions about the probable cause of a crash, which does a disservice to the investigative process and the traveling public."
NTSB Chairman Robert Sumwalt and Mr. Musk last Friday appeared to defuse tension, with the two men discussing the agency's investigative processes and recommendations U.S. investigators made after the May 2016 fatal Tesla crash, according to a letter released Thursday.
But on Wednesday, Tesla came out with a stronger statement defending Autopilot and blaming the incident on Mr. Huang after his family hired a lawyer to explore legal options.
"The crash happened on a clear day with several hundred feet of visibility ahead, which means that the only way for this accident to have occurred is if Mr. Huang wasn't paying attention to the road, despite the car providing multiple warnings to do so," the company said.
The NTSB said it alerted Mr. Musk to the decision to revoke the company's status as a party to the probe on Wednesday evening and through a letter delivered to the company the following day. "It is unfortunate that Tesla, by its actions, did not abide by the party agreement," Mr. Sumwalt said.
Tesla said Thursday it needed to correct "misleading claims that have been made about Autopilot" that suggested the technology undermined safety. The auto maker accused the NTSB of being "more concerned with press headlines than actually promoting safety" and releasing "partial bits of incomplete information to the media in violation" of its own rules.
Tesla said it would make an official complaint to Congress, as well as a public-records request to "understand the reasoning behind [the NTSB's] focus on the safest cars in America while they ignore the cars that are the least safe."
Mr. Musk has been aggressive in rolling out partially automated driving technology, contending it enhances safety when used correctly. He has been working on making Tesla vehicles capable of fully piloting themselves, and investors have bid up the company's stock partly because of Tesla's progress with automated-driving technology.
Write to Mike Spector at mike.spector@wsj.com , Tim Higgins at Tim.Higgins@WSJ.com
and Andy Pasztor at andy.pasztor@wsj.com
Read More
* Uber Sticks to Self-Driving
* Tesla Blames Driver in Fatal Car Crash
* Tesla, Uber Deaths Raise Questions About the Perils of Partly Autonomous Driving
* Uber Suspends Driverless-Car Program After Pedestrian Is Killed
* Waymo Chief Confident Alphabet Unit's Self-Driving Technology Could Avoid Uber-like Incident
Credit: By Mike Spector, Tim Higgins and Andy Pasztor
Subject: Aircraft accidents & safety; Agreements; Fatalities; Investigations; Regulatory agencies; Aviation; Automation; Vehicles
Location: Silicon Valley-California Culver City California United States--US Arizona
People: Musk, Elon Spector, Tim Blumenthal, Richard
Company / organization: Name: Uber Technologies Inc; NAICS: 511210, 518210; Name: Congress; NAICS: 921120; Name: Twitter Inc; NAICS: 519130; Name: National Transportation Safety Board; NAICS: 926120; Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Senate; NAICS: 921120; Name: United Parcel Service of America Inc; NAICS: 484110, 492110; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 13, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2024250042
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2024250042?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-13
Database: The Wall Street Journal
Tesla, Investigators Feud Over a Crash
Author: Spector, Mike; Higgins, Tim; Pasztor, Andy
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]13 Apr 2018: A.1.
ProQuest document link
Abstract: None available.
Full text: An unusual public feud between Tesla Inc. and federal accident investigators escalated Thursday over the examination of a fatal car crash, sidelining the auto maker from an official probe concerning its semiautonomous driving system.
In dueling explanations, Tesla and the National Transportation Safety Board clashed over whether the company withdrew or was removed as an official party to the agency's investigation into last month's crash of a Model X sport-utility vehicle that killed the driver near Mountain View, Calif.
The NTSB said Thursday that it tossed Tesla from the probe, asserting the auto maker violated a formal agreement when it released detailed information this week about the crash before government investigators had vetted it.
Tesla late Wednesday, and again on Thursday, contended it dropped out, saying restrictions on disclosures could jeopardize public safety by blocking the timely release of relevant information to the public including about its semiautonomous driving system, called Autopilot.
The safety board countered that its procedures call for immediate recommendations if emergency safety fixes are required.
The dispute between an unconventional Silicon Valley electric-car maker and a small government agency with sizable influence over transportation safety illustrates how both sides are grappling with new investigative and public-relations issues stemming from crashes of vehicles with driverless-car technologies.
The safety board, with five members confirmed by the Senate, is responsible for investigating accidents across various transportation modes and then issuing nonbinding recommendations to regulatory authorities.
Despite a sterling world-wide reputation for dissecting aviation disasters, the NTSB lacks extensive experience looking into the complexities of autonomous systems controlling passenger vehicles.
While the safety board has no regulatory mandate, its findings and recommendations have shaped aviation, railroad and pipeline operations. It has relied on companies and unions to participate in accident probes by contributing technical expertise, but those so-called parties to federal investigations have to follow strict prohibitions against unilaterally giving out information to the public or prematurely announcing conclusions to the media.
Sen. Richard Blumenthal (D., Conn.), who has long delved into auto-safety issues, said Thursday he was "troubled by Tesla's reckless disregard" of its obligations to the NTSB. "If autonomous-vehicle manufacturers like Tesla cannot be trusted to fully cooperate, then it's clear that Congress must act," he said in a written statement.
Removals from NTSB party agreements are rare. The agency in 2014 revoked party status for United Parcel Service Inc. and a pilots union in the probe of a crash of one of the package-delivery company's cargo planes after public comments were made by each side about circumstances surrounding the accident.
For Tesla, a departure from the NTSB agreement risks diminishing the car maker's influence over and insight into an investigation that could ultimately reach critical conclusions about one of the company's signature products.
Tesla's pugnacity toward the NTSB reflects its iconoclastic approach to corporate communications that often involves Chief Executive Elon Musk assailing critics on Twitter, even joking about the company's financial ruin.
Unlike other car makers, Tesla doesn't shy from confronting government agencies. On Thursday, it repeated an earlier point Mr. Musk had tweeted, calling the NTSB an "advisory body" as opposed to a "regulatory" one and describing its own relationship with the National Highway Traffic Safety Administration, the main federal agency that oversees vehicle makers, "strong and positive."
Autopilot has garnered investor enthusiasm and helped Tesla at one point surpass General Motors Co. as the U.S.'s most valuable auto maker by market capitalization. The technology has also drawn scrutiny, though, with the NTSB determining after the May 2016 fatal crash of a Tesla car that Autopilot allowed a driver to go long periods without hands on the wheel and ignore warnings from the vehicle.
The NTSB is also investigating the January crash of a Tesla Model S into the back of a firetruck near Culver City, Calif. The vehicle's driver said Autopilot was engaged at the time of the crash, according to local firefighters. And the NTSB is probing the March 18 death of a pedestrian struck and killed in Arizona by an Uber Technologies Inc. self-driving car, though not a Tesla, that had a safety operator behind the wheel.
Tesla released information about the March 23 fatal crash under investigation several times recently, suggesting that the driver, Walter Huang, was to blame because, though Autopilot was activated before the crash, he still had at least five seconds to take over the wheel before it collided with a highway barrier.
The NTSB said such releases can prompt "speculation and incorrect assumptions about the probable cause of a crash, which does a disservice to the investigative process and the traveling public."
NTSB Chairman Robert Sumwalt and Mr. Musk last Friday appeared to defuse tension, with the men discussing the agency's investigative processes and recommendations U.S. investigators made after the May 2016 fatal Tesla crash, according to a letter released Thursday.
But on Wednesday, Tesla came out with a stronger statement defending Autopilot and blaming the incident on Mr. Huang after his family hired a lawyer to explore legal options.
"The crash happened on a clear day with several hundred feet of visibility ahead, which means that the only way for this accident to have occurred is if Mr. Huang wasn't paying attention to the road, despite the car providing multiple warnings to do so," the company said.
Credit: By Mike Spector, Tim Higgins and Andy Pasztor
Subject: Aircraft accidents & safety; Fatalities; Aviation; Regulatory agencies; Autonomous vehicles; Accident investigations
Location: Mountain View California
People: Musk, Elon Blumenthal, Richard
Company / organization: Name: National Transportation Safety Board; NAICS: 926120; Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2018
Publication date: Apr 13, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2024340663
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2024340663?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-13
Database: The Wall Street Journal
Storied Ferrari Designer Wants to Build a $2.5 Million Electric Car; Italian design firm Pininfarina will battle Porsche, Tesla with a coming electric 'hyper car'
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Pininfarina SpA has spent nine decades designing Ferraris, Cadillacs, Alfa Romeos and Maseratis. It now plans to build its own electric "hyper car" that only a sliver of the world's population can afford.
The storied Italian design firm will put a multimillion-dollar car on sale in 2020 as other brands--including Porsche and Aston Martin--flock to the electric-vehicle segment. Anand Mahindra, chairman of the company that owns Pininfarina, said the battery-powered car fits in a broader "sustainable luxury" market and will target buyers who tend to be collectors treating automobiles with the same veneration as rare pieces of art.
It isn't a sure bet. Pininfarina is a revered design house that dabbles in several disciplines, ranging from office buildings to fountain-beverage dispensers to video projectors. While it is most known for its automotive design work, the company will be wading into riskier territory by committing to the capital-intensive task of building cars in Italy and relying on a sprawling global supply chain that includes battery procurement.
Tesla Inc.'s struggle to ramp up output of its premium sports sedans has been notable, forcing the company to raise billions in operating cash and delay production time lines
. Mr. Mahindra said Pininfarina's parent, India-based Mahindra & Mahindra Ltd., builds hundreds of cars a year and will buy batteries rather than copy Tesla's more vertical approach.
Chinese-owned Volvo Car is executing a similar move, recently purchasing a performance-tuning firm called Polestar
and using that brand to create a high-performance electric car. Volvo's effort, however, will likely find a broader audience because of lower price tags and a unique subscription ownership model.
Mahindra & Mahindra bought Pininfarina earlier this decade
, dishing out about [euro]25 million, or roughly $31 million, for control. The deal was aimed at boosting the Indian automotive, information-technology and tractor company's credentials.
While the investment is modest, it secured a well-known automotive brand that can be expected to compete in an increasingly viable supercar sector
. Combined sales of Bentley, Rolls-Royce, Lamborghini, Ferrari, Aston Martin and McLaren last year rose 6% to exceed 35,000, tripling the growth rate for the broader global auto industry.
In an interview, Mr. Mahindra indicated Pininfarina's car could carry a price tag of about $2.5 million with production limited to double-digit volumes--though more approachable models could follow. A student of Tesla Chief Executive Elon Musk's business strategy, Mr. Mahindra envisions building out the lineup with other passenger cars or sport-utility vehicles, but said the brand will never be aimed at the mass-market.
The global auto industry isn't a stranger to astronomical price tags. Sweden's Koenigsegg Automotive AB, Volkswagen AG's Bugatti and Lamborghini, Ferrari NV and McLaren Cars are among the companies asking several million dollars per vehicle
. Many executives say the most exclusive brands will eventually embrace batteries as the primary power source because electric cars can generally out-accelerate conventional ones.
Mr. Musk, for instance, has long touted the performance numbers of Tesla's Model S
, which the company says can travel from a standstill to 60 miles per hour in 2.5 seconds. Ferrari Chief Executive Sergio Marchionne has said the Italian supercar maker will move into electric powertrains.
Michael Perschke, a former Audi AG executive tapped by Mahindra to run a new company called Automobili Pininfarina, estimates the new Pininfarina EV will race from zero-to-62 mph in under 2 seconds, and travel more than 300 miles on a single battery charge.
Write to John D. Stoll at john.stoll@wsj.com
Credit: By John D. Stoll
Subject: Automobile industry; Electric vehicles
Location: Italy Sweden
People: Musk, Elon
Company / organization: Name: Koenigsegg Automotive AB; NAICS: 336211; Name: Aston Martin Lagonda Ltd; NAICS: 336111; Name: Mahindra & Mahindra Ltd; NAICS: 541512; Name: Audi AG; NAICS: 336111; Name: Ferrari NV; NAICS: 336111; Name: Pininfarina SpA; NAICS: 336111; Name: Volkswagen AG; NAICS: 336111, 336390; Name: Tesla Inc; NAICS: 336999; Name: Porsche AG; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 13, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2024439167
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2024439167?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-14
Database: The Wall Street Journal
How Tesla's Elon Musk Makes a Strategy Out of Defiance; 'It's like you have the normal world and then you have this Tesla bubble world where the rules don't apply,' critic says
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc.'s public feud with a top safety investigator is highly unusual in business, but classic Elon Musk.
The chief executive's split with the National Transportation Safety Board this past week over its investigation into a Tesla car crash is the kind of brash move that Mr. Musk has made repeatedly in the 14 years since the electric-car maker was founded. From the kinds of cars he sells to how he makes them to how he promotes his company, Mr. Musk has made defiance of convention a point of pride, and made dismissing of barriers to his vision of progress into a point of principle.
The from-the-hip approach has largely worked so far for Mr. Musk, who has built the scrappy upstart into a global luxury brand whose market value has at times exceeded that of General Motors Co. But some observers question the style's suitability to a company of Tesla's size and age, and some investors are growing impatient
for Mr. Musk to deliver on his promises, including the protracted production ramp-up for the new Model 3 sedan.
"I love that Elon Musk isn't bound by tradition--that's part of his brilliance," Rebecca Lindland, a longtime automotive-industry analysts at Kelley Blue Book, said. But "they need to get out of the startup realm and start behaving like a company that's worth more than GM."
Little about Mr. Musk follows normal business logic, starting with the fact that he also runs another major company, Space Exploration Technologies Corp., and has founded several smaller startups all while trying to disrupt the auto industry. "If one were to do a risk-adjusted rate of return estimate on various industry opportunities, I would put basically building rockets and cars pretty close to the bottom of the list," Mr. Musk said recently. "They would have to be the dumbest things to do."
Where management textbooks counsel delegation, Mr. Musk micromanages, boasting about sleeping at the factory so he can help fine-tune production. And while many CEOs are guarded in their public statements, Mr. Musk often fires off Twitter posts rebutting critics or making sometimes enigmatic statements about his business plans.
His unorthodox style was on display in tweets over the past couple of weeks, where Mr. Musk has joked about the company going bankrupt on April Fools' Day, criticized coverage of Tesla by publications including the Economist and The Wall Street Journal, and predicted in a post after 1 a.m. one night that the company, which has never reported an annual profit, will be profitable in the third and fourth quarters this year.
Even by his standards, the battle with the NTSB is risky. Mr. Musk's public sparring with NTSB, which he claimed is more concerned about headlines than safety, puts Tesla at odds with an influential agency whose report on Last month's fatal crash of a Model X
sport-utility vehicle could influence public perception and policy.
That controversy comes as Tesla is struggling to prove that it can mass produce electric cars. In recent weeks, questions about Tesla's cash needs amid delays in ramping up production of the Model 3 have intensified, including Moody's Investors Service downgrading its credit rating.
Mr. Musk's early bet with Tesla was that a sexy sports car could excite buyers for an electric vehicle. His more recent Model 3 bucks tradition as well
, with a minimalist design aesthetic in a cockpit dominated by a 15-inch touch screen that resembles an oversize iPad, displaying information such as speed and offering controls for temperature and other functions.
Mr. Musk has also eschewed franchised dealership, arguing that the direct relationship with the customer is important and plowing a new way of selling cars in company-owned stores and online as dealers have fought the approach across the country.
Some industry traditionalists find Mr. Musk's approach vexing. Mike Jackson, CEO of AutoNation Inc., the nation's largest dealership group, pointed to Tesla's marketing of the Model 3 on its website as starting at $35,000, even though the current version of the Model 3 starts in the U.S. at $49,000.
"You can't advertise something at a price point and then not have it at that price point," he said in an interview. "It's like you have the normal world and then you have this Tesla bubble world where the rules don't apply."
"We've been very clear since we launched Model 3 last year about the price of current Model 3 configurations, which has been repeatedly mentioned in reviews of the car, and that the $35,000 base model would come as production ramps," a Tesla spokeswoman said. "We are working as quickly as we can to introduce less expensive Model 3 variants."
Like Mr. Musk, his fans revel in dismissing skeptics. Trip Chowdhry, an analyst for Global Equities Research, often sends notes to investors with messages such as one on April 7: "Betting against Elon Musk is not only insane but total stupidity--equivalent to committing a `Career Suicide,''' he wrote.
Along with being unpredictable, Mr. Musk is sometimes unrealistic. Tesla this month reported that during the first quarter it again missed its production target
for the Model 3, which it has revised multiple times, though it said it is on track to reach about 5,000 a week around the end of the second quarter.
In an interview with CBS This Morning that aired on Friday, Mr. Musk blamed some of the troubles on too much automation at the factory--something he has championed in the past--and for putting too much new technology into the sedan.
"We got complacent about some of the things we thought were our core technology," he said. "We put too much new technology into the Model 3 all at once--this should've been staged."
Mr. Musk told CBS he is feeling optimistic about where Tesla is now. "At this point I can have a clear understanding of the path out of hell and I did not until recently have a clear understanding," he said.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile dealers; Electric vehicles
Location: United States--US
People: Musk, Elon
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: AutoNation Inc; NAICS: 441110; Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Twitter Inc; NAICS: 519130; Name: Wall Street Journal; NAICS: 511110; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: National Transportation Safety Board; NAICS: 926120; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 15, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2024963993
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2024963993?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-16
Database: The Wall Street Journal
Business News -- Analysis: For Tesla's Elon Musk, Defiance Is a Plan
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]16 Apr 2018: B.5.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc.'s public feud with a top safety investigator is highly unusual in business, but classic Elon Musk.
The chief executive's split with the National Transportation Safety Board this past week over its investigation into a Tesla car crash is the kind of brash move that Mr. Musk has made repeatedly in the 14 years since the electric-car maker was founded. From the kinds of cars he sells to how he makes them to how he promotes his company, Mr. Musk has made defiance of convention a point of pride, and made dismissing of barriers to his vision of progress into a point of principle.
The from-the-hip approach has largely worked so far for Mr. Musk, who has built the scrappy upstart into a global luxury brand whose market value has at times exceeded that of General Motors Co. But some observers question the style's suitability to a company of Tesla's size and age, and some investors are growing impatient for Mr. Musk to deliver on his promises, including the protracted production ramp-up for the new Model 3 sedan.
"I love that Elon Musk isn't bound by tradition -- that's part of his brilliance," Rebecca Lindland, a longtime automotive-industry analyst at Kelley Blue Book, said. But "they need to get out of the startup realm and start behaving like a company that's worth more than GM."
Little about Mr. Musk follows normal business logic, starting with the fact that he also runs another major company, Space Exploration Technologies Corp., and has founded several smaller startups, all while trying to disrupt the auto industry. "If one were to do a risk-adjusted rate of return estimate on various industry opportunities, I would put basically building rockets and cars pretty close to the bottom of the list," Mr. Musk said recently. "They would have to be the dumbest things to do."
His unorthodox style was on display in tweets over the past couple of weeks, where Mr. Musk has joked about the company going bankrupt on April Fools' Day and criticized coverage of Tesla by publications including the Economist and The Wall Street Journal.
Even by his standards, the battle with the NTSB is risky. Mr. Musk's public sparring with the NTSB, which he claimed is more concerned about headlines than safety, puts Tesla at odds with an agency whose report on last month's fatal crash of a Model X sport-utility vehicle could influence public perception and policy.
Credit: By Tim Higgins
Subject: Automobile industry
People: Musk, Elon
Company / organization: Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Wall Street Journal; NAICS: 511110; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999; Name: National Transportation Safety Board; NAICS: 926120
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2018
Publication date: Apr 16, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2025253198
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2025253198?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-16
Database: The Wall Street Journal
Tesla Halts Model 3 Production Again; Auto maker says planned downtime helps speed production
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. has again halted production of the Model 3 sedan, days after Chief Executive Elon Musk said the auto maker's pace of making 2,000 of the sedans a week is sustainable.
The Silicon Valley company has fallen behind schedule in building its first mass-market car, missing several goals
including a milestone of making 2,500 vehicles a week by the end of March. Further delays add more pressure for Tesla to crank up production to avoid squeezing its tight cash situation.
Tesla said Monday it is shutting down Model 3 production for about a week as part of its planned downtime. A spokesman repeated the company's past statement that shutdowns are "used to improve automation and systematically address bottlenecks in order to increase production rates." BuzzFeed earlier reported on the temporary shutdown.
Shutdowns are normal during so-called preproduction when an auto maker is preparing the factory to make cars at a high rate. But they are unusual once production has officially begun, said Dennis Virag, a manufacturing consultant who has worked in the automotive industry for 40 years.
"It's unheard of in this day and age," he said.
Tesla has said it shut down production for about a week during the first quarter, helping it "double the weekly Model 3 production rate...by rapidly addressing production and supply chain bottlenecks, including several short factory shutdowns to upgrade equipment."
The Palo Alto, Calif., company on Monday reiterated it is on track to make about 5,000 a week by around the end of the second quarter. Analysts have said the ability to reach this milestone on a consistent basis is important to generating cash for the money-losing company.
On April 3, the company said it had made 2,020 Model 3 cars in the past seven days, including two in the second quarter, and expected to make 2,000 more in the following seven days.
During an interview with CBS This Morning that aired last Friday, Mr. Musk said he thought Tesla could consistently make 2,000 cars a week as it expands on that rate throughout the quarter. "We're able to unlock some of the critical things that were holding us back from reaching 2,000 cars a week, but since then we've continued to do 2,000 cars a week," he said.
Mr. Musk in that interview acknowledged Tesla had relied on too many robots to build the Model 3. Later on Friday, he tweeted that Tesla's "excessive automation" was a mistake. "To be precise, my mistake," he wrote. "Humans are underrated. "
That statement seemed to signal a shift in thinking for Mr. Musk, who has long told investors that Tesla's approach to automation in the factory would help it compete against traditional auto makers. He has even said automation was key to gaining a market value that would rival Apple Inc.
"With Model 3, I think would be roughly comparable with the best high-volume vehicle production lines in the world, better in some respects, a little worse than others, but roughly comparable," Mr. Musk told analysts in May. "And then with some further iteration, I think it will probably be a little bit better than the next-best automotive production line."
The Wall Street Journal reported in October
that Tesla had begun production in July without having all of the advanced assembly line in place, and that as late as September factory workers were banging out large parts of the Model 3 car by hand.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Automation; Shutdowns
Location: Silicon Valley-California Palo Alto California
People: Musk, Elon
Company / organization: Name: Wall Street Journal; NAICS: 511110; Name: Tesla Inc; NAICS: 336999; Name: Apple Inc; NAICS: 334111, 334220, 511210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 17, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2025497467
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2025497467?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-17
Database: The Wall Street Journal
Tesla Halts Production Of Model 3 for Week
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 Apr 2018: B.2.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. has again halted production of the Model 3 sedan, days after Chief Executive Elon Musk said the auto maker's pace of making 2,000 of the sedans a week is sustainable.
The Silicon Valley company has fallen behind schedule in building its first mass-market car, missing several goals including a milestone of making 2,500 vehicles a week by the end of March. Further delays add more pressure for Tesla to crank up production to avoid squeezing its tight cash situation.
Tesla said Monday it is shutting down Model 3 production for about a week as part of its planned downtime. A spokesman repeated the company's past statement that shutdowns are "used to improve automation and systematically address bottlenecks in order to increase production rates." BuzzFeed earlier reported on the temporary shutdown.
Shutdowns are normal during preproduction when an auto maker is preparing the factory to make cars at a high rate. But they are unusual once production has officially begun, said Dennis Virag, a manufacturing consultant who has worked in the automotive industry for 40 years.
"It's unheard of in this day and age," he said.
Tesla has said it shut down production for about a week during the first quarter, helping it "double the weekly Model 3 production rate . . . by rapidly addressing production and supply chain bottlenecks, including several short factory shutdowns to upgrade equipment."
The Palo Alto, Calif., company on Monday reiterated it is on track to make about 5,000 a week by around the end of the second quarter. Analysts have said the ability to reach this milestone consistently is important to generating cash for the money-losing company.
On April 3, the company said it had made 2,020 Model 3 cars in the past seven days, including two in the second quarter, and expected to make 2,000 more in the following seven days.
Credit: By Tim Higgins
Subject: Automobile industry; Shutdowns
Location: Silicon Valley-California Palo Alto California
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2018
Publication date: Apr 17, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2025652281
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2025652281?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-17
Database: The Wall Street Journal
Back to the Drawing Board for Tesla; Latest Model 3 shutdown should make investors nervous
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: How much is a car company that can't consistently
make cars actually worth?
Tesla said Monday it is once again shutting down Model 3 production, this time for about a week. Earlier this month, the company favorably
compared the Model 3 production ramp to that of the original mass-market car, Ford Motor's Model T. Shares fell slightly in early trading Tuesday.
A Tesla spokesman said the latest downtime was planned, but couldn't say when the decision to schedule the halt was made. He also didn't respond to a question about whether future planned shutdowns are scheduled.
The latest halt is a problem since Tesla forecast it would more than double its weekly production rate to about 5,000 toward the end of June. Analyst consensus calls for nearly 155,000 Model 3s to be delivered to customers this year, which is unrealistic if weeks will pass without any production at all.
It seems likely the company will miss its production target for the fourth consecutive quarter, which would delay its efforts to regularly generate cash. Chief Executive Elon Musk, who has developed a habit
of overpromising in his public statements, recently claimed the company will be cash-flow positive in the second half of the year and won't need to raise more money.
Granted, investors are comfortable owning many unprofitable stocks these days that offer high growth potential. In the case of Tesla, however, the need to generate free cash flow soon is very real.
The company has $23 billion in total liabilities, including more than $10 billion in debt. Accounts payable was $2.4 billion at the start of the year. The company's battery contract with Panasonic means they will owe billions more over the next several years, whether or not those batteries are needed.
Then there is the reality that auto makers who have mastered the art of manufacturing generally command a valuation of 10 times earnings or less. Tesla, by contrast, trades at more than 100 times next year's projected earnings. Achieving even that positive denominator hinges on the company actually meeting its goals.
Earlier this month, when Tesla revealed a significant production shortfall, it thanked
employees, investors and suppliers for their "continued patience." Those stakeholders should make sure they know the difference between patience and nonchalance.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Automobile industry
People: Musk, Elon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 17, 2018
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2025856413
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2025856413?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-17
Database: The Wall Street Journal
Tesla Could Benefit From China's New Rules for Foreign Auto Makers; Company has long sought to manufacture its electric cars in China
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: China's announcement Tuesday that it will ease its strict joint-venture rules
on foreign auto makers could benefit Tesla Inc. at the same time the Silicon Valley auto maker needs a charge.
Tesla has long sought to manufacture its electric cars in China--its second-biggest market, after the U.S. But it has shied away from conforming with China's rules requiring a 50-50 joint venture with a local company and the sharing of any profit and technology. So its cars instead are imported from California and subject to a 25% tariff.
The Chinese government now plans to phase out those restrictions for auto makers by 2022, and eliminate the rules this year for companies such as Tesla that make electric vehicles.
That would make it possible for Tesla to build a factory in China and not face the tariff, while auto makers such as General Motors Co. or Volkswagen AG, which established joint ventures in China years ago, might find it difficult to unwind longstanding relationships.
"I don't see anyone walking away from their JV partner and going alone because it's a lot of effort to unwind that," said Jeff Schuster, an analyst for LMC Automotive. "Tesla is the big winner...as long as they have enough funding to establish themselves in China."
A Tesla spokesman declined to comment.
Tesla has been working with the Shanghai government on a deal to build a wholly owned factory in the city's free-trade zone. The company said in November it plans to direct money toward building a China factory next year, with the aim of starting production in three years. It eventually wants to churn out some 200,000 vehicles a year there, including less-expensive models such as the new Model 3 compact sedan and the coming Model Y compact sport-utility vehicle.
But the company hasn't proven it can crank up production to build a mainstream electric car. It has stumbled in building the Model 3 since beginning production in its Fremont, Calif., factory last July, twice delaying its goal of making 5,000 Model 3s a week until around the end of the second quarter.
Tesla said Monday that it plans to halt production of the Model 3 for about a week for upgrades intended to speed up production.
The difficult ramp-up has squeezed the company's cash position and tested the patience of investors, whose excitement last year over the prospect of Tesla becoming a mainstream auto maker pushed its market value above GM.
Despite the 25% tariff raising prices in China, Tesla's business there has experienced significant growth. Revenue in China doubled to $2 billion last year from $1 billion in 2016.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* China to Ease Rules on Foreign Auto Makers
* Tesla Halts Model 3 Production Again
* Tesla Misses Model 3 Production Goal but Shows Progress
Credit: By Tim Higgins
Subject: Automobile industry; Electric vehicles; Tariffs
Location: Silicon Valley-California China California United States--US
Company / organization: Name: LMC Automotive; NAICS: 541910; Name: Volkswagen AG; NAICS: 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 18, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2026417418
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2026417418?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-19
Database: The Wall Street Journal
Tesla's China Plan Is in Line for Lift
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]19 Apr 2018: B.4.
ProQuest document link
Abstract: None available.
Full text: China's announcement Tuesday that it will ease its strict joint-venture rules on foreign auto makers is a potential benefit for Tesla Inc. at the same time the Silicon Valley auto maker needs a charge.
Tesla has long sought to manufacture its electric cars in China -- its second-biggest market, after the U.S. But it has shied away from conforming with China's rules requiring a 50-50 joint venture with a local company and the sharing of any profit and technology. So its cars instead are imported from California and subject to a 25% tariff.
The Chinese government now plans to phase out those restrictions for auto makers by 2022, and eliminate the rules this year for companies such as Tesla that manufacture electric vehicles. That would make it possible for Tesla to build a factory in China and not face the tariff, while auto makers such as General Motors Co. or Volkswagen AG, which established joint ventures in China years ago, might find it difficult to unwind those longstanding relationships.
"I don't see anyone walking away from their JV partner and going alone because it's a lot of effort to unwind that," said Jeff Schuster, an analyst for LMC Automotive. "Tesla is the big winner . . . as long as they have enough funding to establish themselves in China."
A Tesla spokesman declined to comment.
Tesla has been working with the Shanghai government on a deal to build a wholly owned factory in the city's free-trade zone. The company said in November that it plans to direct money toward building a China factory next year, with the aim of starting productionin three years. It eventually wants to churn out some 200,000 vehicles a year there, including less-expensive models such as the new Model 3 compact sedan and the coming Model Y compact sport-utility vehicle.
But the company hasn't shown it can crank up production to build a mainstream electric car. It has stumbled in building the Model 3 since beginning production in its Fremont, Calif., factory last July, twice delaying its goal of making 5,000 Model 3s a week until around the end of the second quarter. Teslasaid Mondayit plans to halt assembly of the Model 3 for about a week for upgrades intended to speed up production.
The difficult ramp-up has squeezed the company's cash position and tested the patience of investors, whose excitement last year over the prospect of Tesla becoming a mainstream auto maker pushed its market value above General Motors.
Despite the 25% tariff raising prices in China, Tesla's business there has grown significantly. Revenue in China doubled to $2 billion last year from $1 billion in 2016.
Credit: By Tim Higgins
Subject: Automobile industry; Tariffs; Electric vehicles
Location: China Silicon Valley-California California United States--US
Company / organization: Name: LMC Automotive; NAICS: 541910; Name: Volkswagen AG; NAICS: 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2018
Publication date: Apr 19, 2018
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2026839159
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2026839159?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-19
Database: The Wall Street Journal
Tesla Could Benefit From China's New Rules for Foreign Auto Makers; Company has long sought to manufacture its electric cars in China
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: China's announcement Tuesday that it will ease its strict joint-venture rules
on foreign auto makers could benefit Tesla Inc. at the same time the Silicon Valley auto maker needs a charge.
Tesla has long sought to manufacture its electric cars in China--its second-biggest market, after the U.S. But it has shied away from conforming with China's rules requiring a 50-50 joint venture with a local company and the sharing of any profit and technology. So its cars instead are imported from California and subject to a 25% tariff.
The Chinese government now plans to phase out those restrictions for auto makers by 2022, and eliminate the rules this year for companies such as Tesla that make electric vehicles.
That would make it possible for Tesla to build a factory in China and not face the tariff, while auto makers such as General Motors Co. or Volkswagen AG, which established joint ventures in China years ago, might find it difficult to unwind longstanding relationships.
"I don't see anyone walking away from their JV partner and going alone because it's a lot of effort to unwind that," said Jeff Schuster, an analyst for LMC Automotive. "Tesla is the big winner...as long as they have enough funding to establish themselves in China."
A Tesla spokesman declined to comment.
Tesla has been working with the Shanghai government on a deal to build a wholly owned factory in the city's free-trade zone. The company said in November it plans to direct money toward building a China factory next year, with the aim of starting production in three years. It eventually wants to churn out some 200,000 vehicles a year there, including less-expensive models such as the new Model 3 compact sedan and the coming Model Y compact sport-utility vehicle.
But the company hasn't proven it can crank up production to build a mainstream electric car. It has stumbled in building the Model 3 since beginning production in its Fremont, Calif., factory last July, twice delaying its goal of making 5,000 Model 3s a week until around the end of the second quarter.
Tesla said Monday that it plans to halt production of the Model 3 for about a week for upgrades intended to speed up production.
The difficult ramp-up has squeezed the company's cash position and tested the patience of investors, whose excitement last year over the prospect of Tesla becoming a mainstream auto maker pushed its market value above GM.
Despite the 25% tariff raising prices in China, Tesla's business there has experienced significant growth. Revenue in China doubled to $2 billion last year from $1 billion in 2016.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* China to Ease Rules on Foreign Auto Makers
* Tesla Halts Model 3 Production Again
* Tesla Misses Model 3 Production Goal but Shows Progress
Credit: By Tim Higgins
Subject: Automobile industry; Tariffs; Electric vehicles
Location: China Silicon Valley-California California United States--US
Company / organization: Name: LMC Automotive; NAICS: 541910; Name: Volkswagen AG; NAICS: 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 19, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2026854098
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2026854098?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-19
Database: The Wall Street Journal
In Race to Build the Next Tesla, Startups Turn to Seasoned Executives; EVelozcity, an electric-vehicle maker that attracted $1 billion of funding commitments since December, adds a GM veteran and former BMW executives
Author: Colias, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Deep-pocketed investors looking to create the next Tesla are turning to seasoned automotive executives for help making sense of the complicated and capital-intensive car business.
A little-known Los Angeles electric-vehicle startup, EVelozcity, is the latest firm to lure big-name talent. The company, attracting commitments for $1 billion in funding since December, has hired Karl-Thomas Neumann, the former head of General Motors Co.'s European division, along with several former BMW AG executives.
Like many of the EV startups cropping up in California in recent years, EVelozcity has Chinese backers to thank for its large war chest. While investors from China have helped along several battery-powered vehicle companies
--including Wanxiang Group's rescue of the high-publicity Fisker project
--other ventures have struggled to get off the ground due to lofty goals or insufficient capital.
EVelozcity declined to disclose its investors, saying they come from Germany and Taiwan in addition to China. Mr. Neumann, 57, said in an interview he believes conventional auto makers aren't entirely committed to a wholesale transition for the industry because battery power will siphon sales from the high-margin fossil-fuel-powered cars they've sold for more than a century.
"It's very hard to disrupt yourselves," Mr. Neumann said. His former employer, GM, and other auto makers say they're committed to electrics, with more than $70 billion pledged
toward development of new electric models industrywide since early 2017.
Mr. Neumann's job search was a result of GM's sale of its European operation, including Opel, to Peugeot maker PSA. GM, Peugeot and most other multinational car companies have projects under way aimed at developing EVs, driverless cars and shared-transportation programs designed to challenge Tesla Inc., Alphabet Inc.'s Waymo and Uber Technologies Inc.
Mr. Neumann also worked at Volkswagen AG and German parts supplier Continental AG.
Newcomer companies that lure veterans in attempt to replicate Tesla Chief Executive Elon Musk's success face a long list of challenges. Mr. Musk has defied industry expectations, but struggled to launch vehicles on time
, meet price targets and maintain quality levels.
Faraday Future, started four years ago by Chinese billionaire Jia Yueting, attracted veterans including product chief Peter Savagian, who spent nearly 20 years at GM, mainly working on electrics and hybrid vehicles. Dag Reckhorn, with a background at automotive suppliers, oversees manufacturing.
Faraday Future, recently abandoning a plan to build a $1 billion Nevada factory to produce high-end vehicles, has taken several actions
just to keep the lights on. Many of the seasoned recruits have moved on.
The company recently got a $1.5 billion investor commitment and aims to produce a car by year-end, a spokesman said.
EVelozcity wants to make more-affordable electrics that will be used for ride-sharing, commuting and commercial delivery in big cities. The strategy is similar to Nissan Motor Co.'s approach, steering away from the rich but fickle crowd that would buy premium models.
Many EV startups are developing exotic sports cars
with acceleration that can rival a Ferrari.
Among the other companies looking to edge in on Tesla is Byton, also backed by Chinese investors. Its chief executive, Carsten Breitfeld, spent 20 years as an engineer and executive at BMW, and its president, Daniel Kirchert, ran the premium Infiniti brand in China.
Lucid Motors, an electric-car company based in Silicon Valley, in 2015 hired Derek Jenkins, who was Mazda's head designer. China-backed EV startup SF Motors Inc., which bought a plant in Indiana last year, hired former Volkswagen executive Jim Finn to oversee production.
Stefan Krause, a former chief financial officer at Deutsche Bank and BMW, recruited Mr. Neumann to EVelozcity. The firm also includes engineer Ulrich Kranz and designer Richard Kim, who helped develop BMW's i3 and i8.
Mr. Krause joined Faraday last year to help it raise capital but left in October after six months. He has since been sued by Faraday, which alleges he left with trade secrets. Mr. Krause and a Faraday spokesman declined to comment.
While electric-vehicle startups generally have the ability to raise more capital than many other young companies, they are going up against traditional car companies preparing dozens of new models.
Mr. Krause said Tesla's success shows there are plenty of consumers who would rather not buy electrics from traditional auto makers that only dabble in EVs.
"We think there is a younger generation that really wants to drive a true EV brand," he said.
Write to Mike Colias at Mike.Colias@wsj.com
READ MORE
* The Problem With Electric Cars? Not Enough Chargers
* Lucid Motors Looks to Edge Into Electric-Car Contention
* U.S. Auto Makers Step Up Plans for Electric Vehicles
Credit: By Mike Colias
Subject: Electric vehicles; Startups; Automobile industry
Location: Indiana Nevada Silicon Valley-California United States--US Germany China California Los Angeles California Taiwan
People: Neumann, Karl-Thomas Musk, Elon Finn, Jim Jia Yueting
Company / organization: Name: Uber Technologies Inc; NAICS: 511210, 518210; Name: Lucid Motors; NAICS: 336111; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Groupe PSA; NAICS: 336111; Name: Tesla Inc; NAICS: 336999; Name: Nissan Motor Co Ltd; NAICS: 336111; Name: Alphabet Inc; NAICS: 551114; Name: Continental AG; NAICS: 326211; Name: Volkswagen AG; NAICS: 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Deutsche Bank AG; NAICS: 522110, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 21, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2028146180
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2028146180?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-23
Database: The Wall Street Journal
Mapbox Hires Former Tesla Autopilot Designer to Rethink Driverless-Car Maps; Brennan Boblett helped reimagine maps in increasingly automated cars
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Brennan Boblett, who helped pioneer the look of touch screen interfaces in increasingly autonomous vehicles, is joining well-funded startup Mapbox Inc. to help create digital maps for passengers in driverless cars.
Mapbox provides mapping and location-search technology to a variety of companies including messaging-app developer Snap Inc. and General Electric Co. In October, it raised $164 million in a round led by SoftBank Group to expand its efforts into the automotive industry.
Mr. Boblett spent several years as a designer at auto maker Tesla Inc., leading a team that created the interfaces of digital touch screens that rest on the dashboards of the electric vehicles, including how the user interacted with the company's semiautonomous Autopilot system.
He also worked for about a year at Uber Technologies Inc., where he worked on the user interface for autonomous cars and redesigned the ride-hailing service's driver app that deals heavily with mapping, according to his online resume.
Even if the cars of the future drive themselves, passengers will still need maps. Autonomous-car developers such as Alphabet Inc.'s Waymo and General Motors Co.'s Cruise Automation have paid increasing attention to the vehicle's cockpit, understanding how the vehicle will need to communicate the world to passengers with changing needs.
"The map needs to be the canvas that communicates to the human about what is going on," said Eric Gundersen, chief executive of Mapbox.
The maps must not only convey how the trip is progressing but also provide reassurance to the passengers, who may not be completely comfortable with the idea of giving up control of the vehicle.
Waymo's interface, demonstrated last fall, for example, includes an animated icon of its driverless van navigating the road with other cars represented by blue rectangles and pedestrians as glittering ghostlike characters. Cruise showed a similar interface in its demo last fall, though with less detail.
Mapbox will be challenged to convince auto makers its maps are a viable alternative. Alphabet's Google, which has a jump-start in autonomous-vehicle development, provides mapping data for many companies' apps. German auto makers Daimler AG, BMW AG and Volkswagen AG's Audi jointly acquired their own mapping business from Nokia in 2015.
Mapbox, founded in 2010, says it provides mapping technology to about 1.2 million developers, and collects about 250 million miles of anonymized road data daily that power the company's maps with real-time information. It was born out of Mr. Gundersen's efforts to create layered maps for nonprofits and government agencies to help track malaria outbreaks in Zambia and to support elections in Pakistan.
Credit: By Tim Higgins
Subject: Automobile industry; Maps; Automation; Vehicles
Location: Zambia Pakistan
Company / organization: Name: Uber Technologies Inc; NAICS: 511210, 518210; Name: Alphabet Inc; NAICS: 551114; Name: Snap Inc; NAICS: 511210; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: General Electric Co; NAICS: 332510, 334290, 334512, 334519; Name: Google Inc; NAICS: 334310, 519130; Name: Volkswagen AG; NAICS: 33 6111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999; Name: Daimler AG; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 25, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2030158793
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2030158793?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-25
Database: The Wall Street Journal
Tesla's Autopilot Hit With More Turmoil as Leader Departs for Intel; Jim Keller's departure is the latest in a string of departures from Tesla's senior ranks
Author: Higgins, Tim; Greenwald, Ted
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Apr 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: The head of Tesla Inc.'s Autopilot semiautonomous-driving system departed for Intel Corp., adding new turmoil to a key program for the auto maker that is already beset by executive departures and safety questions.
Jim Keller left the company for a job focused on microprocessor engineering, Tesla said late Wednesday. People familiar with the situation said Mr. Keller is joining Intel, which declined to comment.
Mr. Keller joined Tesla in 2016 from chip maker Advanced Micro Devices Inc. to serve as vice president of Autopilot hardware. He assumed control of Autopilot software as well last June, following the departure of Chris Lattner, who left only six months after Tesla hired him
away from Apple Inc.
"Prior to joining Tesla, Jim's core passion was microprocessor engineering and he's now joining a company where he'll be able to once again focus on this exclusively," Tesla said. Electrek, a blog that closely follows Tesla, earlier reported Mr. Keller's departure.
Tesla has had several departures from its senior ranks since the start of last year, including its top sales executive and chief financial officer. The company is struggling to ramp up production of the Model 3, a sedan that is supposed to help make the electric-car producer more mainstream.
Autopilot, a driver-assistance program that can keep Tesla cars in highway lanes and at speed, has helped Tesla's image as a technologically advanced car company. The program, however, has been racked by several departures as Chief Executive Elon Musk has pushed the team to bring out a fully driverless system
--something he promised in 2016 to demonstrate by the end of last year but failed to do.
Autopilot program director Sterling Anderson left Tesla in January 2017 to begin a competing self-driving-software startup
called Aurora Innovation Inc. He was replaced by Mr. Lattner.
Tesla's Autopilot program also is under new scrutiny after a Model X driver died using Autopilot in a crash south of San Francisco last month. The National Transportation Safety Board and National Highway Traffic Safety Administration are probing the crash
. Tesla has blamed the driver for the crash and defended the safety of its system.
That was the second fatal crash involving Tesla's Autopilot in the U.S. to draw federal review. The NHTSA found that Autopilot wasn't defective in a fatal 2016 Florida crash while the NTSB laid partial blame on Tesla, saying the system allowed the driver to keep his hands off the wheel too long and be used in inappropriate areas.
Tesla said Mr. Keller's responsibilities will now be shared by two executives.
Andrej Karpathy, an expert in computer vision and deep learning who joined Tesla in June, is taking responsibility for Autopilot software, while Pete Bannon, a former Apple chip executive who joined Tesla two years ago, will lead Autopilot hardware.
"Tesla is deeply committed to developing the most advanced silicon in the world," the company said in a statement. "We plan to dramatically increase our investment in that area while building on the world-class leadership team we have in place."
Mr. Keller couldn't be reached for comment late Wednesday.
For Intel, hiring Mr. Keller brings on an accomplished engineering leader who helped design competing products from rival AMD, which lately have been gaining traction in the market. Besides his work at Tesla and AMD, Mr. Keller worked on pioneering semiconductor efforts at Digital Equipment Corp. in the late 1990s and Apple's early iPhone and iPad chips in the late 2000s.
At Intel, Mr. Keller will be senior vice president of platform engineering, in charge of hardware-development efforts including graphics, AI and cellular modems, according to the people familiar with the situation.
Mr. Keller has a track record of creating chip designs "that turn companies around," one of the people said.
The move also reunites Mr. Keller with Intel's chief chip architect Raja Koduri, Mr. Keller's partner from his days at Apple and AMD. The two will work together on new product development, the people said.
Write to Tim Higgins at Tim.Higgins@WSJ.com and Ted Greenwald at Ted.Greenwald@wsj.com
Credit: By Tim Higgins and Ted Greenwald
Subject: Software; Product development; Semiconductors; Engineering; Leadership
Location: United States--US Florida San Francisco California
People: Musk, Elon Anderson, Sterling
Company / organization: Name: Intel Corp; NAICS: 334210, 334413, 334419, 334614, 511210; Name: Advanced Micro Devices Inc; NAICS: 334413; Name: National Transportation Safety Board; NAICS: 926120; Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Digital Equipment Corp; NAICS: 334111; Name: Tesla Inc; NAICS: 336999; Name: Apple Inc; NAICS: 334111, 334220, 511210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Apr 26, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2030615315
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2030615315?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-27
Database: The Wall Street Journal
Top Executive Leaves At Tesla's Autopilot
Author: Higgins, Tim; Greenwald, Ted
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 Apr 2018: B.4.
ProQuest document link
Abstract: None available.
Full text: The head of Tesla Inc.'s Autopilot semiautonomous-driving system departed for Intel Corp., adding new turmoil to a key program for the auto maker that is already beset by executive departures and safety questions.
Jim Keller left the company for a job at Intel focused on microprocessor engineering.
Mr. Keller joined Tesla in 2016 from chip maker Advanced Micro Devices Inc. to serve as vice president of Autopilot hardware. He assumed control of Autopilot software as well last June, following the departure of Chris Lattner, who left only six months after Tesla hired him away from Apple Inc.
Tesla has had several departures from its senior ranks since the start of last year, including its top sales executive and chief financial officer. The company is struggling to ramp up production of the Model 3, a sedan that is supposed to help make the electric-car producer more mainstream.
Autopilot, a driver-assistance program that can keep Tesla cars in highway lanes and at speed, has helped Tesla's image as a technologically advanced car company. The program, however, has been racked by several departures as Chief Executive Elon Musk has pushed the team to bring out a fully driverless system -- something he promised in 2016 to demonstrate by the end of last year but failed to do.
Autopilot program director Sterling Anderson left Tesla in January 2017 to begin a competing self-driving-software startup called Aurora Innovation Inc. He was succeeded by Mr. Lattner.
Tesla's Autopilot program also is under new scrutiny after a Model X driver died using Autopilot in a crash south of San Francisco last month. The National Transportation Safety Board and National Highway Traffic Safety Administration are probing the crash. Tesla has blamed the driver for the crash and defended the safety of its system.
That was the second fatal crash involving Tesla's Autopilot in the U.S. to draw federal review. The NHTSA found that Autopilot wasn't defective in a fatal 2016 Florida crash while the NTSB laid partial blame on Tesla, saying the system allowed the driver to keep his hands off the wheel too long and did too little to constrain the system to roads for which it was designed.
Tesla said Mr. Keller's responsibilities will now be shared by two executives.
Andrej Karpathy, an expert in computer vision and deep learning who joined Tesla in June, is taking responsibility for Autopilot software, while Pete Bannon, a former Apple chip executive who joined Tesla two years ago, will lead Autopilot hardware.
"Tesla is deeply committed to developing the most advanced silicon in the world," the company said in a statement. "We plan to dramatically increase our investment in that area while building on the world-class leadership team we have in place."
For Intel, hiring Mr. Keller brings on an accomplished engineering leader who helped design competing products from rival AMD that have been gaining traction in the market. Besides his work at Tesla and AMD, Mr. Keller worked on pioneering semiconductor efforts at Digital Equipment Corp. in the late 1990s and Apple's early iPhone and iPad chips in the late 2000s.
Credit: By Tim Higgins and Ted Greenwald
Subject: Software; Semiconductors; Roads & highways
Location: United States--US Florida San Francisco California
People: Musk, Elon Anderson, Sterling
Company / organization: Name: Intel Corp; NAICS: 334210, 334413, 334419, 334614, 511210; Name: Advanced Micro Devices Inc; NAICS: 334413; Name: National Transportation Safety Board; NAICS: 926120; Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Digital Equipment Corp; NAICS: 334111; Name: Tesla Inc; NAICS: 336999; Name: Apple Inc; NAICS: 334111, 334220, 511210
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2018
Publication date: Apr 27, 2018
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2031246151
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2031246151?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-04-27
Database: The Wall Street Journal
Tesla Feels the Weight of Solar Panels; Slowing installations, investment guarantees add to car maker's challenges
Author: Pulliam, Susan; Higgins, Tim; Dugan, Ianthe Jeanne
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. has another financial worry: Its home solar-panel business is facing slowing installations and could be on the hook for financial promises it made to some investors, just as the U.S. tax law
presents new risks to the industry.
SolarCity, which the electric-car maker bought in 2016
, is undergoing a sweeping sales revamp that reduced the number of panels the company installed last year. Now, investors and analysts say they are scrutinizing guarantees on investment returns and other promises the company made to firms that helped finance SolarCity's business before the revamp, and wondering whether Tesla will have to inject cash into those deals.
Sanford C. Bernstein & Co. analysts recently cited SolarCity as one of three main risks for Tesla, alongside production woes of its first mass-market car and slow customer adoption of electric vehicles. "SolarCity could struggle in migrating to a sales and loan model, or defaults could increase, triggering high cash needs," they told clients.
Tesla, in its recent annual filing, warned that the new tax law could be a disincentive for investors to fund renewable-energy projects. Tesla emphasized the entire solar industry is affected by the changes.
Tesla declined to break out financial results beyond saying the solar business generated positive cash for the company last year and that it has helped boost interest in its Powerwall and Powerpack energy-storage batteries, two other products that, along with SolarCity, make up Tesla Energy Operations Inc.
"Regardless of whatever misinformation critics happen to be pushing this week, we are building the world's first vertically-integrated sustainable energy company, and solar is an important part of that effort," Tesla said in a statement. "Far from being a cash burden for Tesla, our solar business was actually cash flow positive in 2017, and we expect that trend to continue in 2018."
Tesla has little room for any problems at SolarCity. The company's debt swelled to $10 billion partly due to its SolarCity acquisition. It also had negative cash flow of about $1 billion on average each quarter last year, in part because of investing for the new Model 3 sedan. Tesla missed a crucial production goal
for the mass-market car last quarter, adding pressure to crank out enough vehicles to generate cash this year.
The company reports first-quarter financial results on Wednesday.
When Tesla proposed to acquire SolarCity in mid-2016, the solar business had less than $150 million in cash at the end of that year's second quarter. Tesla Chief Executive Elon Musk was SolarCity's chairman and a shareholder at the time. SolarCity ended up losing more than $800 million that year and had more than $3 billion in debt.
Since the merger, SolarCity has switched to selling customers solar panels in Tesla showrooms, rather than leasing them door-to-door. The leases required SolarCity to finance the deals, which it did using money from outside investors. Selling the panels, by contrast, means customers either pay cash or take out a loan to pay for them. Tesla hopes the new tack will generate more cash and make it less dependent on outside investors.
But the new strategy has led to a slowdown in installations
, says Allison Mond, a solar analyst at GTM Research, which expects SolarCity to be surpassed as the leading residential solar-panel installer this year. Tesla's and SolarCity's shareholder letters indicate a 38% decline in the megawatts of solar panels deployed in 2017.
If SolarCity can't generate enough business, it might not be able to deliver promised investment returns to funds it created before the Tesla deal. Some investors can claim tax benefits based off the company's losses, and Tesla could be forced to pay investors out of its pocket to make good on its guarantees, analysts say.
A Tesla spokeswoman said it doesn't provide guaranteed investor returns but rather indemnifications, which it says are typical of the solar industry. Tesla also described the type of financing it uses as "non-recourse," meaning it is secured only by collateral. Therefore, the company wouldn't have additional liability beyond losing the collateral in case of default, Tesla said.
At the end of 2016, as Tesla was beginning to digest SolarCity, the solar company had arranged $3.9 billion of financing through a type of fund known as a variable interest entity, according to 2017 filings. These VIEs had 47 investors, including 34 financial institutions. In a recent securities filing, Tesla said "in some instances" it has guaranteed payments to investors in the VIEs.
The Tesla spokeswoman said it now has more than 60 such funds with more than $6.2 billion in financing. The company declined to comment on the specific guarantees beyond saying in an April interview that it no longer guaranteed so-called VIEs.
Tesla also said it had one particular fund dating to 2011 that had a guarantee but that has since been bought out.
In its latest annual report, in February, Tesla also outlined several types of complex deals made with investors in which it is responsible for guarantees, including "lease pass-throughs" and "sale-leasebacks," two common arrangements used to finance solar projects.
The company declined to say why its financial filings still mention the guarantees.
Another risk has emerged due to the December change in the tax law, which lowered corporate tax rates to 21% from 35%. Analysts say the change could hurt SolarCity's ability to fund new projects because it could alter the incentives for investors. A lower tax rate, when applied to losses, reduces the amount an investor can deduct from total losses. That, in turn, would lower the investment return.
Tesla said in a recent filing that the new tax code "could potentially increase the cost, and decrease the availability, of renewable energy financing."
Write to Susan Pulliam at susan.pulliam@wsj.com and Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Susan Pulliam, Tim Higgins and Ianthe Jeanne Dugan
Subject: Tax rates; Stockholders; Cash flow
Location: United States--US
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 1, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2033011332
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2033011332?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-02
Database: The Wall Street Journal
Tesla Feels Drag From Home-Solar Business
Author: Pulliam, Susan; Higgins, Tim; Dugan, Ianthe Jeanne
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 May 2018: B.1.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. has another financial worry: Its home solar-panel business is facing slowing installations and could be on the hook for financial promises it made to some investors, just as the U.S. tax law presents new risks to the industry.
SolarCity, which the electric-car maker bought in 2016, is undergoing a sweeping sales revamp that reduced the number of panels the company installed last year. Now, investors and analysts say they are scrutinizing guarantees on investment returns and other promises the company made to firms that helped finance SolarCity's business before the revamp, and are wondering whether Tesla will have to inject cash into those deals.
Sanford C. Bernstein & Co. analysts recently cited SolarCity as one of three main risks for Tesla, alongside production woes of its first mass-market car and slow customer adoption of electric vehicles. "SolarCity could struggle in migrating to a sales and loan model, or defaults could increase, triggering high cash needs," they told clients.
Tesla, in its recent annual filing, warned that the new tax law could be a disincentive for investors to fund renewable-energy projects. Tesla emphasized the entire solar industry is affected by the changes.
Tesla declined to break out financial results beyond saying the solar business generated positive cash flow for the company last year and that it has helped boost interest in its Powerwall and Powerpack energy-storage batteries, two other products that, along with SolarCity, make up Tesla Energy Operations Inc.
"Regardless of whatever misinformation critics happen to be pushing this week, we are building the world's first vertically integrated sustainable energy company, and solar is an important part of that effort," Tesla said in a statement. "Far from being a cash burden for Tesla, our solar business was actually cash flow positive in 2017, and we expect that trend to continue in 2018."
Tesla has little room for any problems at SolarCity. The company's debt swelled to $10 billion partly due to its SolarCity acquisition. It also had negative cash flow of about $1 billion on average each quarter last year, in part because of investing for the new Model 3 sedan. Tesla missed a crucial production goal for the mass-market car last quarter, adding pressure to crank out enough vehicles to generate cash this year.
The company is set to report first-quarter financial results on Wednesday.
When Tesla proposed to acquire SolarCity in mid-2016, the solar business had less than $150 million in cash at the end of that year's second quarter. Tesla Chief Executive Elon Musk was SolarCity's chairman and a shareholder at the time. SolarCity ended up losing more than $800 million that year and had more than $3 billion in debt.
Since the merger, SolarCity has switched to selling customers solar panels in Tesla showrooms, rather than leasing them door-to-door. The leases required SolarCity to finance the deals, which it did using money from outside investors. Selling the panels, by contrast, means customers either pay cash or take out a loan to pay for them. Tesla hopes the new tack will generate more cash and make it less dependent on outside investors.
But the new strategy has led to a slowdown in installations, said Allison Mond, a solar analyst at GTM Research, which expects SolarCity to be surpassed as the leading residential solar-panel installer this year. Tesla's and SolarCity's shareholder letters indicate a 38% decline in the megawatts of solar panels deployed in 2017.
If SolarCity can't generate enough business, it might not be able to deliver promised investment returns to funds it created before the Tesla deal. Some investors can claim tax benefits based off the company's losses, and Tesla could be forced to pay investors out of its pocket to make good on its guarantees, analysts say.
A Tesla spokeswoman said it doesn't provide guaranteed investor returns but rather indemnifications, which it says are typical of the solar industry. Tesla also described the type of financing it uses as "nonrecourse," meaning it is secured only by collateral. Therefore, the company wouldn't have additional liability beyond losing the collateral in case of default, Tesla said.
At the end of 2016, as Tesla was beginning to digest SolarCity, the solar company had arranged $3.9 billion of financing through a type of fund known as a variable interest entity, according to 2017 filings. These VIEs had 47 investors, including 34 financial institutions. In a recent securities filing, Tesla said "in some instances" it has guaranteed payments to investors in the VIEs.
The Tesla spokeswoman said it now has more than 60 such funds with more than $6.2 billion in financing. The company declined to comment on the specific guarantees beyond saying in an April interview that it no longer guaranteed so-called VIEs.
Tesla also said it had one particular fund dating to 2011 that had a guarantee but that has since been bought out.
In its latest annual report, in February, Tesla also outlined several types of complex deals made with investors in which it is responsible for guarantees, including "lease pass-throughs" and "sale-leasebacks," two common arrangements used to finance solar projects.
The company declined to say why its financial filings still mention the guarantees.
Another risk has emerged due to the December change in the tax law, which lowered corporate tax rates to 21% from 35%. Analysts say the change could hurt SolarCity's ability to fund new projects because it could alter the incentives for investors. A lower tax rate, when applied to losses, reduces the amount an investor can deduct from total losses. That, in turn, would lower the investment return.
Tesla said in a recent filing that the new tax code "could potentially increase the cost, and decrease the availability, of renewable energy financing."
Credit: By Susan Pulliam, Tim Higgins and Ianthe Jeanne Dugan
Subject: Tax rates; Stockholders; Cash flow; Corporate taxes
Location: United States--US
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999; Name: SolarCity Corp; NAICS: 221114, 238220, 333414
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2018
Publication date: May 2, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2033181820
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2033181820?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-03
Database: The Wall Street Journal
Tesla's First-Quarter Cash Position In Focus: What to Watch; Revenue expected to rise from a year ago
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. is expected to release first-quarter financial results after the market closes Wednesday. Here's what you need to know:
EARNINGS FORECAST: Tesla is expected to post an adjusted-loss of $3.54 a share, according to analysts surveyed by FactSet, compared with an adjusted loss of $1.33 a share a year earlier.
REVENUE FORECAST: Revenue is expected to rise to $3.28 billion, according to FactSet, from $2.7 billion a year earlier. Tesla said last month that total vehicle deliveries, including 8,180 units of the new Model 3 sedan, rose 20% to 29,980. Deliveries of the higher-priced Model S sedan and Model X sport-utility vehicle, however, fell about 13% combined compared with a year ago.
Big Burn: Tesla's remaining cash pile and projected burn rate is top of mind for investors. Will it need to raise more cash to crank out the Model 3
? Tesla executives maintained last month they won't need to worry about it this year after finishing 2017 with $3.4 billion in cash and raising $546 million during the first quarter through the sale of asset-based securities. But some analysts, like Colin Langan of UBS, have doubts. "The key question regarding a capital raise is whether [Tesla] approaches the market with good news or bad news," he wrote in a note to investors. He estimates Tesla will need to invest more than $25 billion in the next decade to pay for all of Mr. Musk's ambitious plans. Mr. Musk, for one, doesn't seem to be taking the doubters seriously, joking on April Fool's about Tesla running out of cash and going bankrupt.
Late Model: The delayed ramp-up of the Model 3 has put the company under scrutiny. Despite missing production goals in the first quarter, Tesla has reiterated it is on track
to make 5,000 Model 3s in a single week by around the end of the second quarter. Mr. Musk went even further, in a memo that was published by the auto blog Electrek, saying he was pushing the company to make as many as 6,000 a week in an attempt to have some wiggle room. A production shutdown last month was supposed to allow the company to ramp to a rate of as many as 4,000 a week this month followed by more upgrades later in May to get to that greater rate. Investors will be looking for any new details.
Y or Why Not?: Mr. Musk has previously said he expects to begin production of Tesla's next vehicle, a compact SUV dubbed the Model Y as soon as late 2019. Analysts, such as Brian Johnson of Barclays, expect he might begin to tease more details of his plans for that vehicle or the coming Roadster or Semi truck to begin paving the way for another capital raise.
Robot Reaction: Analysts will likely probe Mr. Musk for more details on why he said Tesla depended upon too much automation to build the Model 3. In a tweet last month, he wrote, "Yes, excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated." That is seemingly a change of position from before when Mr. Musk touted that the company's automation would give it a competitive advantage, especially when it came to bringing out the Model Y. "Model Y is where I think it really becomes a step change," he said in May last year.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automation
Company / organization: Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 2, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2033212788
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2033212788?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-02
Database: The Wall Street Journal
Tesla Continues to Burn Through Cash; CEO Elon Musk reiterates that Tesla is still on pace to make about 5,000 Model 3s in a single week
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. burned through cash at a greater rate than analysts expected during the first quarter, intensifying pressure on the Silicon Valley auto maker to raise more capital if it continues to struggle with production of the Model 3 sedan.
The company's free cash flow widened to about a negative $1 billion after burning $277 million in the final three months of last year, a figure that was unusually low thanks, in part, to delays in spending and customer deposits.
Despite the increased spending, Chief Executive Elon Musk repeated on Wednesday that Tesla is still on pace to make about 5,000 Model 3s a week by around the end of the second quarter. The twice postponed goal is critical, analysts say, for Tesla to generate cash and reach profitability.
Tesla said it plans to reduce capital investments for the year and, along with the increased rate of production, expects to become cash-flow positive in the second half and profitable in the third and fourth quarters.
The electric-car maker posted a loss attributable to common shareholders of $710 million, the fifth consecutive quarter of record losses. On a per-share basis, Tesla reported a loss of $3.35, narrower than the loss of $3.54 predicted by analysts surveyed by FactSet. A year ago, the company had a loss of $1.33 a share.
Revenue rose to $3.41 billion, beating analyst expectations of $3.28 billion.
Shares of Tesla, down 3.3% so far this year, edged lower to $300 in after-hours trading.
Production of the Model 3 sedan, which began in July, has bedeviled Mr. Musk. At the company's Fremont, Calif., factory, he has admitted in recent weeks to relying too much on automation to make the vehicle--which was supposed to start at $35,000 but instead goes for $49,000 in the U.S. A lower-priced version, with a shorter battery range, isn't expected to reach the market until later this year.
"We have good visibility of our path to fully ramp and stabilize Model 3 production this year," Mr. Musk said in a letter to shareholders on Wednesday.
The Model 3 is part of Mr. Musk's vision of bringing electric cars to the masses and turning Tesla into something more than a luxury-car company selling Model S sedans and Model X sport-utility vehicles for an average of $100,000 each.
His gamble of remaking the automotive landscape, however, is facing a make-or-break period as the company struggles with the Model 3. The company has little wiggle room and needs to begin generating cash or else raise more money.
In the letter on Wednesday, Tesla doesn't address whether it expects to raise more capital this year. Last month, the company said it wouldn't need to raise any debt or equity this year, apart from standard credit lines.
Tesla said Wednesday that it expects to generate positive cash flow in the third and fourth quarters, "including the inflow of cash that we receive in the normal course of our business from financing activities on leased vehicle and solar products."
Analysts surveyed by FactSet on average predicted a negative free cash flow of $889 million during the first quarter. The company averaged a negative free cash burn of $900 million a quarter last year. The totals don't include payments for solar-energy systems.
Tesla finished the first quarter with $2.7 billion in cash on hand, compared with $3.4 billion at the end of last year. The cash levels put Tesla "in good shape providing they do start generating cash later this year," said David Whiston, an analyst for Morningstar Research Services LLC.
Tesla said it was cutting back on capital expenditures this year to "slightly" less than $3 billion from $3.4 billion last year. "We have significantly cut back our capex projections by focusing on the critical near-term needs that benefit us primarily in the next couple of years," Mr. Musk wrote.
Tesla's total vehicle deliveries in the first quarter, announced last month, rose 20% to 29,997, including 8,812 Model 3 vehicles. Deliveries of the higher-priced Model S sedan and Model X sport-utility vehicle, however, fell about 13% combined compared with a year earlier.
Tesla made 9,766 Model 3s during the first quarter and fell short of its goal of making 2,500 in a single week. In April, it said that it reached a rate of 2,000 in a seven-day period that included two days of the second quarter.
Mr. Musk had once suggested the company could make as many as 200,000 Model 3s in the second half of last year.
While he warned in July that the Model 3 ramp-up would be hard, Mr. Musk has said it has been more challenging than expected. He has retaken control of production and said earlier this year that he was sleeping sometimes at the factory.
"A step change in manufacturing doesn't come without its challenges, particularly early in the process, and we made a mistake by adding too much automation too quickly," Mr. Musk wrote in the shareholder letter Wednesday.
He has directed the factory to work 24 hours, seven days a week and aims to make as many 4,000 Model 3s in a single week this month followed by some additional upgrades to the factory so it can turn out as many 6,000 a week by the end of June.
He set the goal of making 5,000 a week by the end of the second quarter, a milestone that has twice been delayed. Mr. Musk recently told "CBS This Morning" that he finally sees a way through the challenges.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Heard on the Street: Tesla Can't Make Its Cash Problems Disappear
Credit: By Tim Higgins
Subject: Automobile industry; Losses
Location: Silicon Valley-California United States--US
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 2, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2033427806
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2033427806?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-02
Database: The Wall Street Journal
Tesla Can't Make Its Cash Problems Disappear; First-quarter results were grim, and conspicuously missing from its earnings release was a reference to how much cash Tesla burned
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: First-quarter results from Tesla Inc. weren't as bad as Wall Street feared. That should be of minimal consolation to its shareholders.
The electric-vehicle giant reported sales of $3.4 billion and an adjusted loss of $3.35 a share.
Analysts had predicted an adjusted loss of $3.54 a share. That is hardly a cause for celebration; the loss was much worse than the $2.02 a share they predicted when the quarter began.
More important, Tesla burned about $1.1 billion in free cash in the quarter. Investors reading the earnings release
may not have noticed, since Tesla removed it from the spot where it usually appears. Tesla ended the quarter with about $2.7 billion in cash on its books. That cash balance barely covers the portion of its long-term debt and capital leases due this year.
Meanwhile, as has become all too typical
, Tesla hedged on its more ambitious targets. It still expects to reach its production milestone of 5,000 Model 3 sedans a week "in about two months." That forecast comes with a caveat: "our prior experience has demonstrated the difficulty of accurately forecasting specific production rates at specific points in time." Another slip in timing would mark the fourth time this forecast has been delayed since last summer.
There are certainly steps Tesla can take to rebuild its cash balance. For one thing, Tesla says it expects to turn a profit in the third and fourth quarters of this year. But there is simply no reason to take their projections about the future seriously. It could raise fresh capital, which CEO Elon Musk has claimed isn't necessary.
The company is trying to conserve cash. Tesla said it now expects to reduce its capital spending to less than $3 billion this year, down from an expected $3.4 billion. Accounts payable jumped to $2.6 billion, an increase of more than $200 million from the end of last year.
Meanwhile, Mr. Musk suddenly isn't chatty about Model 3 demand. On a conference call with analysts, he cut off a question about the rate at which reservations convert to orders, dismissing the query as "too dry."
Tesla's shares are flat this year despite mounting problems. Dreams can't support Tesla's $50 billion market value forever.
Credit: By Charley Grant
Subject: Capital leases; Capital expenditures
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 2, 2018
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2033442209
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2033442209?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-04
Database: The Wall Street Journal
Tesla Continues to Burn Through Cash; CEO Elon Musk reiterates that Tesla is still on pace to make about 5,000 Model 3s in a single week
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. burned through cash at a greater rate than analysts expected during the first quarter, intensifying pressure on the Silicon Valley auto maker to raise more capital if it continues to struggle ramping up production of the Model 3 sedan.
The company's free cash flow widened to about a negative $1 billion after burning $277 million in the final three months of last year, a figure that was unusually low thanks, in part, to delays in spending and customer deposits.
Despite the increased spending, Chief Executive Elon Musk indicated the company won't need to raise more money because it is still on pace to make about 5,000 Model 3s in a single week by around the end of the second quarter. The twice postponed goal is critical, analysts say, for Tesla to generate cash and reach profitability.
The increased rate of production, coupled with plans to reduce capital expenditures, should help Tesla become cash-flow positive in the second half of the year and profitable in the third and fourth quarters, the company said.
That would be a big reversal from the first quarter, when Tesla posted a loss attributable to common shareholders of $710 million, its fifth consecutive quarter of record losses. Tesla's per-share loss of $3.35 was narrower than analysts' average expectations, according to FactSet, but those projections were lowered significantly in recent months.
During a combative conference call with analysts on Wednesday, Mr. Musk answered curtly when Adam Jonas of Morgan Stanley asked whether it would be prudent for Tesla to raise more capital while it can even if it doesn't need it. "No," Mr. Musk replied. "I specifically don't want to."
Later on the call, Mr. Musk cut off two analysts who were asking about Tesla's business--specifically capital expenditures and Model 3 reservations--calling the questions "so dry. They're killing me."
As Mr. Musk deflected some questions, the stock started sliding in after-hours trading, falling as much as 6% in about a 20-minute period, before settling down 4.6% at 8 p.m. EDT. Tesla's stock had fallen more than 3% in 2018.
Production of the Model 3 sedan, which began in July, has bedeviled Mr. Musk at the company's Fremont, Calif., factory, where in recent weeks he has conceded to relying too much on automation to make the vehicle that was supposed to start at $35,000 but instead goes for $49,000 in the U.S. The lower-priced version, with a shorter battery range, isn't expected to reach the market until later this year.
The Model 3 is part of Mr. Musk's vision of bringing electric cars to the masses and turning Tesla into something more than a luxury car company selling Model S sedans and Model X sport-utility vehicles that average for $100,000.
His gamble of remaking the automotive landscape, however, is facing a critical make-or-break period as the company struggles with the Model 3. The company has little wiggle room and needs to begin generating cash or else raise more money.
Last month, Tesla said it won't need to raise any debt or equity this year, apart from standard credit lines.
Tesla on Wednesday said it expects to cut back on spending and generate positive cash flow in the third and fourth quarters, "including the inflow of cash that we receive in the normal course of our business from financing activities on leased vehicle and solar products."
Analysts surveyed by FactSet on average predicted a negative free cash flow of $889 million during the first quarter. The company averaged a negative free cash burn of $900 million a quarter last year. These totals don't include payments for solar energy systems.
Tesla finished the first quarter with $2.7 billion in cash on hand, compared with $3.4 billion at the end of last year. Customer deposits, for vehicles such as the Model 3 and Roadster, rose about 15% to $985 million from the end of last year.
The cash levels put Tesla "in good shape providing they do start generating cash later this year," said David Whiston, an analyst for Morningstar Research Services LLC.
Tesla said it was cutting back on capital expenditures this year to "slightly" less than $3 billion from $3.4 billion last year. "We have significantly cut back our capex projections by focusing on the critical near-term needs that benefit us primarily in the next couple of years," Mr. Musk wrote in a letter to shareholders on Wednesday.
Tesla's total vehicle deliveries, announced last month, rose 20% to 29,997, including 8,812 Model 3 vehicles. Deliveries of the higher-priced Model S sedan and Model X sport-utility vehicle, however, fell about 13% combined compared with a year ago. Revenue rose about 26% to $3.41 billion, beating analyst expectations of $3.28 billion.
Tesla made 9,766 Model 3s during the first quarter and fell short of its goal of making 2,500 in a single week. In April, it said that it reached a rate of 2,000 in a seven-day period that included two days of the second quarter.
Mr. Musk had once suggested the company could make as many as 200,000 Model 3s in the second half of last year.
While he had warned in July that the Model 3 ramp-up would be hard, Mr. Musk has said it has been worse than expected. He has retaken control of production and said earlier this year that he was sleeping sometimes at the factory.
He has directed the factory to work 24 hours, seven days a week and aims to make as many 4,000 Model 3s in a single week this month followed by some additional upgrades to the factory so they can make as many 6,000 a week by the end of June.
He set the goal of making 5,000 a week by the end of the second quarter, a milestone that has twice been delayed. Mr. Musk recently told "CBS This Morning" that he finally sees a way through the challenges.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Heard on the Street: Tesla Can't Make Its Cash Problems Disappear
Credit: By Tim Higgins
Subject: Lines of credit; Stockholders; Losses; Cash flow; Vehicles
Location: Silicon Valley-California United States--US
People: Musk, Elon
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 3, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2033507129
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2033507129?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-04
Database: The Wall Street Journal
Tesla Spends Heavily but Sees Profits Ahead
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 May 2018: B.1.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. burned through cash at a greater rate than analysts expected during the first quarter, intensifying pressure on the Silicon Valley auto maker to raise more capital if it continues to struggle ramping up production of the Model 3 sedan.
The company's free cash flow widened to about a negative $1 billion after burning $277 million in the final three months of last year, a figure that was unusually low thanks, in part, to delays in spending and customer deposits.
Despite the increased spending, Chief Executive Elon Musk indicated the company won't need to raise more money because it is still on pace to make about 5,000 Model 3s in a single week by around the end of the second quarter.The twice postponed goal is critical, analysts say, for Tesla to generate cash and reach profitability.
The increased rate of production, coupled with plans to reduce capital expenditures, should help Tesla become cash-flow positive in the second half of the year and profitable in the third and fourth quarters, the company said.
That would be a big reversal from the first quarter, when Tesla posted a loss attributable to common shareholders of $710 million, its fifth consecutive quarter of record losses. Tesla's per-share loss of $3.35 was narrower than analysts' average expectations, according to FactSet, but those projections were lowered significantly in recent months.
During a combative conference call with analysts on Wednesday, Mr. Musk answered curtly when Adam Jonas of Morgan Stanley asked whether it would be prudent for Tesla to raise more capital while it can even if it doesn't need it. "No," Mr. Musk replied. "I specifically don't want to."
Later on the call, Mr. Musk cut off two analysts who were asking about Tesla's business -- specifically capital expenditures and Model 3 reservations -- calling the questions "so dry. They're killing me."
As Mr. Musk deflected some questions, the stock started sliding in after-hours trading, falling as much as 6% in about a 20-minute period, before settling down 4.6% at 8 p.m. EDT. Tesla's stock had fallen more than 3% in 2018.
Production of the Model 3 sedan, which began in July, has bedeviled Mr. Musk at the company's Fremont, Calif., factory, where in recent weeks he has conceded to relying too much on automation to make the vehicle that was supposed to start at $35,000 but instead goes for $49,000 in the U.S. The lower-priced version, with a shorter battery range, isn't expected to reach the market until later this year.
The Model 3 is part of Mr. Musk's vision of bringing electric cars to the masses and turning Tesla into something more than a luxury car company selling Model S sedans and Model X sport-utility vehicles that average for $100,000.
His gamble of remaking the automotive landscape, however, is facing a critical make-or-break period as the company struggles with the Model 3. The company has little wiggle room and needs to begin generating cash or else raise more money.
Last month, Tesla said it won't need to raise any debt or equity this year, apart from standard credit lines.
Tesla on Wednesday said it expects to cut back on spending and generate positive cash flow in the third and fourth quarters, "including the inflow of cash that we receive in the normal course of our business from financing activities on leased vehicle and solar products."
Analysts surveyed by FactSet on average predicted a negative free cash flow of $889 million during the first quarter. The company averaged a negative free cash burn of $900 million a quarter last year. These totals don't include payments for solar energy systems.
Tesla finished the first quarter with $2.7 billion in cash on hand, compared with $3.4 billion at the end of last year.Customer deposits, for vehicles such as the Model 3 and Roadster, rose about 15% to $985 million from the end of last year.
The cash levels put Tesla "in good shape providing they do start generating cash later this year," said David Whiston, an analyst for Morningstar Research Services LLC.
Tesla said it was cutting back on capital expenditures this year to "slightly" less than $3 billion from $3.4 billion last year.
"We have significantly cut back our capex projections by focusing on the critical near-term needs that benefit us primarily in the next couple of years," Mr. Musk wrote in a letter to shareholders on Wednesday.
Tesla's total vehicle deliveries, announced last month, rose 20% to 29,997, including 8,812 Model 3 vehicles.
Deliveries of the higher-priced Model S sedan and Model X sport-utility vehicle, however, fell about 13% combined compared with a year ago. Revenue rose about 26% to $3.41 billion, beating analyst expectations of $3.28 billion.
Tesla made 9,766 Model 3s during the first quarter and fell short of its goal of making 2,500 in a single week. In April, it said that it reached a rate of 2,000 in a seven-day period that included two days of the second quarter.
Mr. Musk had once suggested the company could make as many as 200,000 Model 3s in the second half of last year.
While he had warned in July that the Model 3 ramp-up would be hard, Mr. Musk has said it has been worse than expected. He has retaken control of production and said earlier this year that he was sleeping sometimes at the factory.
He has directed the factory to work 24 hours, seven days a week and aims to make as many 4,000 Model 3s in a single week this month followed by some additional upgrades to the factory so they can make as many 6,000 a week by the end of June.
He set the goal of making 5,000 a week by the end of the second quarter, a milestone that has twice been delayed. Mr. Musk recently told "CBS This Morning" that he finally sees a way through the challenges.
Credit: By Tim Higgins
Subject: Lines of credit; Stockholders; Losses; Cash flow; Automobile industry; Earnings forecasting
Location: United States--US
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2018
Publication date: May 3, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2033615346
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2033615346?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-07
Database: The Wall Street Journal
Elon Musk Taps Brakes on Tesla's Model Y After 3's 'Production Hell'; Tesla boss says: 'We do not want to go through this pain again.'
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: While building the Model 3 has been "production hell" for Tesla Inc., Chief Executive Elon Musk is promising the electric-car maker's next vehicle will usher in a "manufacturing revolution."
The CEO made the comment during a call with analysts Wednesday as he works to assure investors worried about manufacturing troubles related to the Model 3, a sedan that was supposed to be easier to make and use greater automation.
"We do not want to go through this pain again," Mr. Musk said, referring to the Model Y. But he also signaled Tesla was tempering its pace in bringing out the new compact sport-utility vehicle.
A year ago, he told analysts he aspired to bring out the Model Y in late 2019 and reiterated that his target was to make 1 million cars a year by 2020
between the new compact SUV and Tesla's other vehicles.
Mr. Musk told analysts then that Model 3 production would be among the best in the world, while Model Y manufacturing would be significantly better than any competitor. He has boasted that Tesla's manufacturing prowess would help it achieve a market value that rivals Apple Inc.
Then, last month, Mr. Musk surprised many when he revealed that delays in Model 3 production
, which began in July, were, in part, because of an overreliance on automation.
"A step change in manufacturing doesn't come without its challenges, particularly early in the process, and we made a mistake by adding too much automation too quickly," Mr. Musk said in Wednesday's shareholder letter.
Tesla made about 100,000 vehicles last year, including almost 2,700 Model 3s. It is struggling to reach the goal of making 5,000 Model 3s a week by about the end of the second quarter.
Mr. Musk said on the quarterly call with analysts that the focus is on the Model 3. "A good criticism that has been leveled at Tesla, an accurate one--it's high time we became profitable and the truth is, like, you're not a real company until you are, frankly, so that's our focus right now."
He indicated to analysts that little capital would be spent this year to prepare for the Model Y. He said production of the Model Y wouldn't begin next year and instead was 24 months from happening--signaling a start of production in early to mid-2020. That would make it hard for the company to reach its goal of making 1 million vehicles that year.
The company's lone assembly plant in Fremont, Calif., doesn't have enough room to make the Model Y, Mr. Musk said. He aims to announce by year's end where the compact SUV will be built.
"Decisions made at the beginning of the development program have massive implications for future capex," Mr. Musk said. "So it is better to spend a bit more time making the right design decisions and really thinking through the producibility of a product before racing ahead with capex decisions."
In addition to the Model Y factory, Mr. Musk also said there will soon be an announcement of the location for a Tesla factory in China, which will include vehicle-assembly capability. Mr. Musk has previously said the China factory could be capable of making 200,000 vehicles annually.
Tesla appears ready to act on plans in China after the government announced it was easing requirements
that foreign companies partner in local joint ventures to open manufacturing facilities to avoid 25% tariffs.
"We're very appreciative of the fact that the government of China has announced that they will be allowing full ownership of manufacturing facilities," Mr. Musk said.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Manufacturing; Automation; Factories; Vehicles
Location: China
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999; Name: Apple Inc; NAICS: 334111, 334220, 511210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 3, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2033697534
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2033697534?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-04
Database: The Wall Street Journal
Tesla's Elon Musk Turns Conference Call Into Sparring Session; Car maker's CEO cuts off two analysts after they ask about capital requirements and Model 3 reservations; 'boring, bonehead questions are not cool'
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Elon Musk's swagger has helped win admirers and embolden Tesla Inc. investors. This time, the billionaire chief executive may have gone too far.
On Thursday, Tesla's shares fell 5.6%, erasing about $3 billion in market value a day after Mr. Musk sparred with Wall Street analysts in a show of defiance rare for traditionally staid conference calls to discuss a company's quarterly results.
Several analysts reconsidered their outlooks for the Silicon Valley auto maker struggling to take on the century-old automotive industry.
Chief executives of publicly traded companies typically grit their teeth and coolly dance around pointed questions during these calls. Mr. Musk chose instead to dismiss analysts over their "boring, bonehead" questions, cutting off two of them when they asked about Tesla's capital requirements and customer reservations for the Model 3 sedan.
"This is a financial analyst call--this is not a TED talk," Toni Sacconaghi, an analyst with Sanford C. Bernstein & Co., said on CNBC Thursday after he was cut off by Mr. Musk on the call. "So when financial questions are asked, they should be addressed."
In some ways, the combativeness was classic Elon Musk. The billionaire entrepreneur has made defiance of convention
his calling card in a relentless pursuit to upend transportation, and in his eyes, save the world with driverless electric cars and rocket launches to Mars. He fires off Twitter posts at late hours rebutting critics who he believes get in the way, and he often makes grandiose statements about the future of technology.
Mr. Musk's bravado has polarized investors, pitting short sellers who are sure Tesla is headed for demise, against the "longs" who believe his vision will win out. The backers have so far prevailed, giving Mr. Musk room to make, and sometimes miss, overly ambitious goals and lifting Tesla's market value
to rival those of General Motors Co. and Ford Motor Co., much larger auto makers.
But even for Mr. Musk, the impertinent answers to analysts from big banks was jarring, and raised questions whether he was masking Tesla's problems. On the call, he seemed more eager to talk about the future of Tesla--self-driving cars or the next electric vehicle--than the state of the business after the Silicon Valley auto maker burned through about $1 billion during the first quarter
as production struggles continued to beset the Model 3 sedan.
Following the call, which was broadcast for investors online, analysts sent notes to clients that characterized Mr. Musk's exchange as "bizarre theatrics" and "odd," and said Mr. Musk might have struck some as being "dismissive" and "unhinged." At least three analysts dropped their price targets
.
Late Wednesday, while Mr. Musk began deflecting questions on the call, Tesla's stock fell more than 5% in about a 20-minute span during after-hours trading.
Mr. Musk's frustration bubbled up about a half-hour into the call when Mr. Sacconaghi asked about Tesla's target date for achieving 25% gross margins on the Model 3--which, the analyst said, the company seemed to have pushed back by six to nine months from the goal stated just last quarter.
Chief Financial Officer Deepak Ahuja attributed the delay, in part, to added labor costs and a weak dollar. Mr. Musk interrupted to say the gross-margin difference is a matter of three to five percentage points and will be resolved in three to six months.
"Don't make a federal case out of it," he said.
Mr. Sacconaghi, who co-wrote a report last month questioning Tesla's ability to automate its factory, then turned to the company's investment plans. Tesla had previously said it expected spending this year to about match last year's $3.4 billion, but on Wednesday announced it was scaling back plans to less than $3 billion, which could ease its cash crunch.
When Mr. Sacconaghi asked what the company's specific capital requirements would be, Mr. Musk cut him off.
"Boring, bonehead questions are not cool--next," Mr. Musk said, turning to the operator for the next question.
Joseph Spak of RBC Capital Markets then asked what percentage of Model 3 reservation holders who have been invited to start configuring their orders have actually done so.
Mr. Musk was silent for about 15 seconds.
"We're going to go to YouTube, sorry. These questions are so dry. They're killing me," Mr. Musk said. He directed the operator to take questions from Tesla investor Galileo Russell, whose HyperChange TV YouTube channel features a video titled "Why I Bought Tesla Today at $255/Share."
Mr. Russell, who had campaigned to get on the call usually reserved for analysts, got more than 20 minutes from Mr. Musk. The first of his dozen or so questions: When will Tesla launch its own network of driverless cars?
"Thank you for an interesting question," Mr. Musk replied.
Following the call, Mr. Spak lowered his price target to $280 from $305, telling clients the "performance shook confidence" on the part of investors "which we'd argue is an important piece of the Tesla story." The stock closed Thursday at $284.45. Mr. Sacconaghi kept his price target intact, writing that "beneath the bizarre theatrics" he considered Tesla's quarter to be within analysts' expectations.
When Wednesday's call started, Tesla's stock was down less than 1% in after-hours trading. Mr. Musk spent the first 10 minutes describing some of the challenges of ramping up auto production, such as robots' struggles to put fiberglass mats atop of battery packs.
Analysts then began peppering Mr. Musk and Mr. Ahuja with tough questions about the Model 3 delays. Mr. Musk has directed the factory to run 24 hours a day, seven days a week, to reach the goal of making 5,000 of the sedans a week by around the end of the second quarter.
Brian Johnson, an analyst for Barclays, posed questions about the math, finally concluding that Tesla has about one vehicle coming off the factory line every two minutes, compared with the industry average of one a minute. That, Mr. Johnson suggested, seemed to be at odds with Mr. Musk's claim in February that his factory would outpace the industry, which he called slower than a "grandma with a walker."
Later, Mr. Musk again praised Mr. Russell's line of questioning as he asked about a range of topics including the company's Model Y compact sport-utility vehicle, which has yet to begin production.
"Asking questions that are not boring," Mr. Musk said.
Ben Eisen contributed to this article.
Write to Tim Higgins at Tim.Higgins@WSJ.com
More Coverage
* Tesla Earnings Call Shakes Investor Confidence
* Analysts Bewildered by 'Bizarre' Call
* Musk Taps Brakes on Tesla's Model Y After 3's 'Production Hell'
* Tesla Burns Through Cash but Sees Profits Ahead
* Analysis: Tesla Can't Make Cash Woes Vanish
Credit: By Tim Higgins
Subject: Automobile industry; Investments
Location: Silicon Valley-California China
People: Musk, Elon
Company / organization: Name: RBC Capital Markets; NAICS: 523110; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: YouTube Inc; NAICS: 519130; Name: Tesla Inc; NAICS: 336999; Name: Piper Jaffray Cos; NAICS: 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 3, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2033698603
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2033698603?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permissi on.
Last updated: 2018-05-04
Database: The Wall Street Journal
Anheuser-Busch Will Buy Nikola's Hydrogen-Powered Trucks; An order for up to 800 vehicles for beverage distribution adds energy to a competition with Tesla and others to bring alternative-fuel big rigs to trucking
Author: Smith, Jennifer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Anheuser-Busch is reserving up to 800 of Nikola Motor Co.'s hydrogen-electric trucks, one of the largest orders so far for alternative-fuel vehicles as the company races with Tesla Inc. and other manufacturers to move trucking away from diesel-guzzling big rigs.
The U.S. subsidiary of Anheuser-Busch InBev SA plans to use the vehicles for long-haul deliveries from breweries to its distributors starting in 2020. Nikola says it will build 28 hydrogen stations along the routes of the beer maker's so-called dedicated fleet, between 750 and 900 trucks that bear its branding but are generally owned and managed by outside carriers.
Truck operators are increasingly looking at alternative-fuel vehicles as the technology in the field improves and pressures grow to cut operating costs and reduce emissions. Companies have been testing trucks that run on electricity or fuels such as compressed natural gas
, but commercial operations generally have been limited to short distances and smaller vehicles such as parcel delivery vans.
Heavy-duty trucks that can haul tens of thousands of pounds along long distances consume about 39 billion gallons of diesel fuel annually, according to the American Trucking Associations, offering potentially bigger savings, as well as a market that buys between 200,000 and 300,000 big rigs annually.
Nikola's hyrdrogen-electric semi can travel between 500 to 1,200 miles before needing to be refueled, the company says. The system provides power through hydrogen that passes through a fuel cell to produce electricity, which then goes to a battery that sends energy to the vehicle's wheels.
The all-electric Tesla Semi that the Silicon Valley auto maker unveiled last year
is designed to travel as much as 500 miles on a single charge.
Orders for alternative-fuel vehicles account for a tiny share of the overall heavy-duty truck market, in large part because of concerns about how far they can travel and battery weight. The Tesla Semi won't be available until at least 2019. Nikola's hydrogen-electric truck is set for delivery in 2020.
Anheuser-Busch has reserved 40 of the Tesla trucks
, which it plans to use for shipments to wholesalers within 150 to 200 miles of its brewery locations.
The Nikola order will allow the beer maker to convert all its long-haul dedicated fleet to renewable-powered trucks by 2025, said Ingrid De Ryck, Anheuser-Busch's vice president of sustainability and procurement. By then, the company aims to reduce carbon emissions across its supply chain by 25%.
"We see the Nikola and Tesla vehicles as complementary solutions," Ms. De Ryck said. "We have so many routes, so many different distances to cover."
The fierce competition between Nikola and Tesla for that market extends to the design of the trucks. On Tuesday, Nikola sued Tesla for $2 billion in federal court in Arizona, alleging the Tesla Semi infringed on several of the company's design patents, including Nikola's wrap-around windshield and overall design.
"It's patently obvious there is no merit to this lawsuit," Tesla said in a statement.
Nikola chief executive Trevor Milton said the lawsuit was aimed at protecting the company's intellectual property, and that there was room enough for both manufacturers in the alternative-energy truck market.
"We want Tesla to succeed," Mr. Milton said in an interview. "Tesla has really paved the way for people to know that electric vehicles can work... If they fail, it hurts us."
The Nikola truck's longer range may make it more appealing to truckload companies that haul goods over long distances.
U.S. Xpress Inc., a large carrier based in Chattanooga, Tenn., has reserved up to 1,000 of the company's hydrogen-electric trucks, Nikola said. The company says it is now refunding customer deposits on its trucks because it doesn't need the money to fund operations.
Delivery giants United Parcel Service Inc., FedEx Corp. and Deutsche Post AG's DHL have all preordered Tesla Semis
, with orders ranging in size from 10 to 125 trucks. Retailer Walmart Inc., which has one of the largest private truck fleets in the U.S., has ordered 15 Tesla trucks
.
Write to Jennifer Smith at jennifer.smith@wsj.com
Credit: By Jennifer Smith
Subject: Trucks; Hydrogen; Breweries; Trucking industry; Litigation; Vehicles
Location: Silicon Valley-California United States--US Arizona
Company / organization: Name: Anheuser-Busch Cos Inc; NAICS: 312120, 713110; Name: American Trucking Associations; NAICS: 541820, 813910; Name: Walmart Inc; NAICS: 452112, 452910, 454111; Name: Anheuser-Busch InBev; NAICS: 312120; Name: United Parcel Service of America Inc; NAICS: 484110, 492110; Name: FedEx Corp; NAICS: 484110, 492110, 551114; Name: Deutsche Post AG; NAICS: 484110; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 3, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2033746644
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2033746644?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-03
Database: The Wall Street Jo urnal
Business News: Musk's Nerve Tests Limits --- Some analysts wonder if dismissive stance on call served to mask problems at Tesla
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 May 2018: B.3.
ProQuest document link
Abstract: None available.
Full text: Elon Musk's swagger has helped win admirers and embolden Tesla Inc. investors. This time, the billionaire chief executive may have gone too far.
On Thursday, Tesla's shares fell 5.6%, erasing about $3 billion in market value a day after Mr. Musk sparred with Wall Street analysts in a show of defiance rare for traditionally staid conference calls to discuss a company's quarterly results.
Several analysts reconsidered their outlooks for the Silicon Valley auto maker struggling to take on the century-old automotive industry.
Chief executives of publicly traded companies typically grit their teeth and coolly dance around pointed questions during these calls. Mr. Musk chose instead to dismiss analysts over their "boring, bonehead" questions, cutting off two of them when they asked about Tesla's capital requirements and customer reservations for the Model 3 sedan.
"This is a financial analyst call -- this is not a TED talk," Toni Sacconaghi, an analyst with Sanford C. Bernstein & Co., said on CNBC Thursday after he was cut off by Mr. Musk on the call. "So when financial questions are asked, they should be addressed."
In some ways, the combativeness was classic Elon Musk. The billionaire entrepreneur has made defiance of convention his calling card in a relentless pursuit to upend transportation, and in his eyes, save the world with driverless electric cars and rocket launches to Mars. He fires off Twitter posts at late hours rebutting critics who he believes get in the way, and he often makes grandiose statements about the future of technology.
Mr. Musk's bravado has polarized investors, pitting short sellers who are sure Tesla is headed for demise, against the "longs" who believe his vision will win out. The backers have so far prevailed, giving Mr. Musk room to make, and sometimes miss, overly ambitious goals and lifting Tesla's market value to rival those of General Motors Co. and Ford Motor Co., much larger auto makers.
But even for Mr. Musk, the impertinent answers to analysts from big banks was jarring and raised questions whether he was masking Tesla's problems. On the call, he seemed more eager to talk about the future of Tesla -- self-driving cars or the next electric vehicle -- than the state of the business after the Silicon Valley auto maker burned through about $1 billion during the first quarter as production struggles continued to beset the Model 3 sedan.
Following the call, which was broadcast for investors online, analysts sent notes to clients that characterized Mr. Musk's exchange as "bizarre theatrics" and "odd," and said Mr. Musk might have struck some as being "dismissive" and "unhinged." At least three analysts dropped their price targets.
Late Wednesday, while Mr. Musk began deflecting questions on the call, Tesla's stock fell more than 5% in about a 20-minute span during after-hours trading.
Mr. Musk's frustration bubbled up about a half-hour into the call when Mr. Sacconaghi asked about Tesla's target date for achieving 25% gross margins on the Model 3 -- which, the analyst said, the company seemed to have pushed back by six to nine months from the goal stated just last quarter.
Chief Financial Officer Deepak Ahuja attributed the delay, in part, to added labor costs and a weak dollar. Mr. Musk interrupted to say the gross-margin difference is a matter of three to five percentage points and will be resolved in three to six months.
"Don't make a federal case out of it," he said.
Mr. Sacconaghi, who co-wrote a report last month questioning Tesla's ability to automate its factory, then turned to the company's investment plans. Tesla had previously said it expected spending this year to about match last year's $3.4 billion, but on Wednesday announced it was scaling back plans to less than $3 billion, which could ease its cash crunch.
When Mr. Sacconaghi asked what the company's specific capital requirements would be, Mr. Musk cut him off.
"Boring, bonehead questions are not cool -- next," Mr. Musk said, turning to the operator for the next question.
---
Ben Eisen contributed to this article.
Credit: By Tim Higgins
Subject: Automobile industry; Financial performance; Stock prices
Location: Silicon Valley-California
People: Musk, Elon Sacconaghi, Toni
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2018
Publication date: May 4, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2034157111
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2034157111?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-09
Database: The Wall Street Journal
Tesla's Elon Musk Defends 'Bonehead' Remark, Says He Should Have Answered Analysts' Questions; The Tesla CEO said some of the analysts represented people betting against his company but conceded it was 'foolish' not to answer them
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. Chief Executive Elon Musk defended his dismissive treatment of Wall Street analysts earlier in the week, saying they represented people betting against the Silicon Valley electric-car maker while also conceding it was "foolish" not to answer them.
The response came early Friday in a Twitter post, one day after the Palo Alto, Calif., company's shares dropped almost 6%. The fall in the stock price followed Mr. Musk's performance Wednesday on a public, after-hours conference call
with financial analysts to discuss Tesla's first-quarter results.
During the more than one hour call, Mr. Musk cut off two analysts asking about capital-expenditure plans and reservations for the Model 3 sedan, dismissing them as "boring, bonehead" questions and "dry." He then proceeded to engage for more than 20 minutes with a retail investor who maintains a YouTube channel, on topics that dealt largely with future ambitions such as bringing out a compact sport-utility vehicle and driverless cars.
"It's important to know that Tesla is the most shorted (meaning most bet against) stock on the market & has been for a while," Mr. Musk posted in Twitter posts starting at 7:17 a.m. Eastern time. "The 2 questioners I ignored on the Q1 call are sell-side analysts who represent a short seller thesis, not investors."
Mr. Musk is facing intense scrutiny as Tesla struggles to ramp up production of the new Model 3 and analysts question whether he'll need to raise additional cash to keep paying for his ambitious plans.
The company's negative free cash flow hit about $1 billion last quarter while Mr. Musk says Tesla is on track to be cash-flow positive by the second half, in part because it cut back on plans for capital expenditures this year.
With regard to the inquiry about capital expenditures from an analyst at Sanford C. Bernstein & Co. that the CEO called a "boring, bonehead" question, Mr. Musk wrote that it was already answered in his previously issued letter to shareholders. A follow-up question by an RBC Capital Markets analyst about Model 3 reservation-holders converting with orders was "absurd" because the company has about 500,000 reservations, Mr. Musk wrote.
"It would take 2 years just to satisfy existing demand even if new sales dropped to 0," he wrote. "We went through the same drama on [Model] S & [Model] X and almost all confirmed in the end. Will likely be even better for Model 3, as customer satisfaction score post delivery is higher. I worry zero about demand. Just spent all night in the factory, not the showroom."
The analysts on Friday didn't immediately respond for comment. On Thursday, the Bernstein analyst, Toni Sacconaghi, responded on CNBC: "This is a financial analyst call--this is not a TED talk," he said. "So when financial questions are asked, they should be addressed."
A Twitter follower on Friday, responding to Mr. Musk's multiple posts, said he should have chosen to not call on the analysts if he knew they represented short-sellers.
Mr. Musk, about an hour after his first message, responded that he agreed and added, "Once they were on the call, I should have answered their questions live," he wrote. "It was foolish of me to ignore them."
Then, he seemed to offer another dig at Tesla's short-sellers: "Oh and uh short burn of the century comin soon. Flamethrowers should arrive just in time."
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Social networks
Location: Silicon Valley-California Palo Alto California
People: Musk, Elon
Company / organization: Name: RBC Capital Markets; NAICS: 523110; Name: Twitter Inc; NAICS: 519130; Name: YouTube Inc; NAICS: 519130; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 4, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2034330203
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2034330203?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-06
Database: The Wall Street Journal
Musk Defends Use of 'Bonehead' --- Tesla CEO criticizes short sellers, but says he should have answered questions
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 May 2018: B.4.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. Chief Executive Elon Musk defended his dismissive treatment of Wall Street analysts earlier in the week, saying they represented people betting against the Silicon Valley electric-car maker while also conceding it was "foolish" not to answer them.
The response came early Friday in a Twitter post, one day after the Palo Alto, Calif., company's shares dropped almost 6%. The fall followed Mr. Musk's performance Wednesday on a public, after-hours conference call with financial analysts to discuss Tesla's first-quarter results.
During the more than one-hour call, Mr. Musk cut off two analysts asking about capital-expenditure plans and reservations for the Model 3 sedan, dismissing them as "boring, bonehead" questions and "dry." He then proceeded to engage for more than 20 minutes with a retail investor who maintains a YouTube channel, on topics that dealt largely with future ambitions such as bringing out a compact sport-utility vehicle and driverless cars.
"It's important to know that Tesla is the most shorted (meaning most bet against) stock on the market & has been for a while," Mr. Musk posted in Twitter posts starting at 7:17 a.m. EDT. "The 2 questioners I ignored on the Q1 call are sell-side analysts who represent a short seller thesis, not investors."
Mr. Musk is facing intense scrutiny as Tesla struggles to ramp up production of the new Model 3 and analysts question whether he will need to raise additional cash to keep paying for his ambitious plans.
The company's negative free cash flow hit about $1 billion last quarter while Mr. Musk says Tesla is on track to be cash-flow positive by the second half, in part because it cut back on plans for capital expenditures this year.
With regard to the inquiry about capital expenditures from an analyst at Sanford C. Bernstein & Co. that the CEO called a "boring, bonehead" question, Mr. Musk wrote that it was already answered in his previously issued letter to shareholders.
A follow-up question by an RBC Capital Markets analyst about Model 3 reservation-holders converting with orders was "absurd" because the company has about 500,000 reservations, Mr. Musk wrote.
"It would take 2 years just to satisfy existing demand even if new sales dropped to 0," he wrote. "We went through the same drama on [Model] S & [Model] X and almost all confirmed in the end. Will likely be even better for Model 3, as customer satisfaction score post delivery is higher. I worry zero about demand. Just spent all night in the factory, not the showroom."
The analysts on Friday didn't respond to requests to comment. On Thursday, the Bernstein analyst, Toni Sacconaghi, responded on CNBC: "This is a financial analyst call -- this is not a TED talk," he said. "So when financial questions are asked, they should be addressed."
A Twitter follower on Friday, responding to Mr. Musk's multiple posts, said he should have chosen to not call on the analysts if he knew they represented short sellers.
Mr. Musk, about an hour after his first message, responded that he agreed and added, "Once they were on the call, I should have answered their questions live," he wrote. "It was foolish of me to ignore them." Then, he seemed to offer another dig at Tesla's short sellers: "Oh and uh short burn of the century comin soon. Flamethrowers should arrive just in time."
Tesla's shares closed up 3.4% at $294.09 on Friday.
Credit: By Tim Higgins
Subject: Social networks; Capital expenditures
Location: Silicon Valley-California Palo Alto California
People: Musk, Elon
Company / organization: Name: RBC Capital Markets; NAICS: 523110; Name: Twitter Inc; NAICS: 519130; Name: YouTube Inc; NAICS: 519130; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2018
Publication date: May 5, 2018
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2034652332
Document URL: http s://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2034652332?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-05
Database: The Wall Street Journal
Tesla's Numbers Are Even More Dramatic Than Its CEO; Elon Musk's histrionics should not distract from Tesla's deteriorating finances
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Recent drama surrounding Tesla Inc. has masked a more mundane reality: The car maker's finances are deteriorating.
CEO Elon Musk's ongoing feud with Wall Street analysts captured the most attention last week after a memorably contentious conference call
on Wednesday. Mr. Musk promised an imminent "burn of the century"
for investors betting against his stock in a post to Twitter on Friday.
Investors shouldn't be distracted: Dismal first-quarter results and falling bond prices call into question Tesla's $50 billion market capitalization and its overall financial health
Can Tesla finally meet the expectations embedded in its sky-high valuation? The answer depends on how soon the company can start generating net cash to pay its debt and bills. Here are several key metrics that investors need to watch.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Investments
People: Musk, Elon
Company / organization: Name: Twitter Inc; NAICS: 519130; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 5, 2018
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2034702205
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2034702205?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-06
Database: The Wall Street Journal
Tesla's Factory in a Fishbowl; All eyes are on the electric-car maker's production process, which is akin to that of a software company
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: FREMONT, Calif.--Elon Musk has always run his car company at his own pace, but now he finds himself in a historic race to deliver on enormous promises. The next six months will determine whether Tesla Inc.'s Model 3 can reshape the U.S. auto industry or serve merely as a flashy footnote.
Tesla's race is unfolding on the floor of a factory Mr. Musk acquired here in Northern California from Toyota Motor Corp. earlier this decade. I took a tour Thursday, observing the body shop where 1,068 robots were welding, gluing or riveting together parts for dozens of Model 3 sedans.
Though the plant is closely guarded against outsiders--rarely open to media, analysts, let alone competitors--the eyes of the industry are on Tesla's production line. This is largely due to Mr. Musk's bravado and ambitious goals. Inasmuch as the 46-year-old billionaire has captured the public attention with sexy electric cars, rockets and plans to colonize Mars, he has also trained an intense spotlight on the company's attempt to build its own production system. Even early cars intended for employees are being reviewed and inspected on the internet.
The result is a car company that looks more like a software company--making changes as it goes along and pushing through product updates to cars already on the road. Doug Field, a former Apple Inc. and Ford Motor Co. engineer who is now Tesla's engineering chief, notes that, rather than "batch large changes all at once," Tesla continues to make tweaks after a product launches, much as the software industry does.
Some issues require more than a quick reboot: Tesla's current production pace of roughly 325 Model 3s a day isn't enough to stanch cash outflows, which touched $1 billion in the first quarter
. During an interview last week, Mr. Musk sat across a conference table wearing a flannel shirt and a fatigued expression and echoed his critics: "If we don't solve the production we're going to die."
"I need to create a case example of what can be done," Mr. Musk said. He had just finished a contentious earnings call in which he dismissed two analysts' queries
about Tesla's capital requirements and customer reservations for the Model 3 sedan as "boring, bonehead questions," largely reflecting his growing frustration with people who short-sell the stock.
If Mr. Musk gets distracted, it's not just because he runs several companies--including Space Exploration Technologies Corp.--at the same time. He spent a significant chunk of the weeks leading up to Wednesday's call working on business problems that need fixing if Tesla is going to find black ink.
In late April, he decided to go to the company's battery factory in Nevada to try to unclog a production bottleneck. It threatened to cap Model 3 production at about half of the 5,000 weekly target.
The factory needed seven hours to produce a battery pack, a relative eternity in an auto industry that needs to keep assembly lines humming or risk burning enormous amounts of cash. Workers and engineers had been debating solutions for months, and Mr. Musk sat down with them to slash production time to 70 minutes by entirely reordering the way that assembly of batteries flowed.
"My co-workers and I were all giving high-fives at the end of [our] shift," one technician at the Nevada factory said. "He came in and eliminated 80% of the problems we were having."
That episode is reflective of an auto maker that is more flawed than its bigger peers but also more nimble, determined to make dramatic changes on the fly in order to address product quality, production snags and consumer claims in real time.
That 4,000 electric Teslas (including the S and X models) roll off the assembly line in a typical week in Fremont is a miracle to those who have followed the company from its genesis in 2003. The Model 3 and predecessors S and X are transformative, refreshingly simple inside, lightning fast and better for the planet than the Jeep Wrangler I drive to the office.
In some ways, Tesla is updating the Japanese principle of "kaizen," or "continuous improvement," an approach to manufacturing that swept the auto industry in the '80s and '90s. Mr. Field said Tesla practices "continual disapproval" of its processes and is "almost religious" in sweating over everything from seat costs to the best way to attach a roof rack to its $35,000 sedan.
In another example, critics and analysts chided Tesla for the gaps where the Model 3's body panels come together--a topic that was under intense internal discussion, Mr. Field said while walking around a Model 3 near the test track. The company changed the factory tooling so that items like the cover to the tow hook behind the front bumper went from being an awkward fit to a seamless one.
Auto giants typically would iron out such problems in a preproduction phase, making changes before a model reached dealer showrooms. For Tesla, that phase was atypically public, however. Some of the cars sold to employees or those holding early reservations were acquired by car reviewers or industry analysts willing to pay a premium.
Consider the A-pillar, the support at the front of the car that holds a side of the windshield. Initially, the A-pillar on the Model 3 wasn't fitting snugly with the roof liner and the edge of the dashboard--which was bugging company leadership even after the car went on sale. Engineers redesigned the piece on the fly, switching the material covering the pillar so it could fit more tightly. The company has also changed its processes for testing the responsiveness of wheels and made over-the-air updates to vehicles' touch screen climate controls.
Tesla's managers are right to feel the eyeballs of the industry on them. For all the General Motors Co. or Volkswagen AG officials who have bad-mouthed the company in the past, there are as many analyzing its every move.
Ford Motor's chief of markets, Jim Farley, is among those watching. He says he drove the Model 3 about two months ago, and the experience has influenced his thinking as Ford conceives its first battery-electric cars.
He is also watching Silicon Valley's production process. "This is where a lot of tech companies do a better job--they observe the customer and they change quickly," he says. "They put something out and it doesn't work and they fix it and they put it out again, constantly figuring it out and fixing."
Write to John D. Stoll at john.stoll@wsj.com
Related
* Analysis: Tesla's Numbers Are Even More Dramatic Than Its CEO
* Musk Turns Conference Call Into Sparring Session
* Heard on the Street: Tesla Can't Make Its Cash Problems Disappear
Credit: By John D. Stoll
Subject: Automobile industry; Electric vehicles; Software industry; Engineers
Location: Silicon Valley-California United States--US Northern California Nevada
People: Musk, Elon
Company / organization: Name: FCA US LLC; NAICS: 336111, 551112; Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110; Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Volkswagen AG; NAICS: 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999; Name: Apple Inc; NAICS: 334111, 334220, 511210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 7, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2035334602
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2035334602?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-17
Database: The Wall Street Journal
Tesla's Numbers Are More Dramatic Than Its CEO
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 May 2018: B.10.
ProQuest document link
Abstract: None available.
Full text:
Not available.
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.10
Publication year: 2018
Publication date: May 7, 2018
column: Heard on the Street
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest documentID: 2035371743
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2035371743?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-07
Database: The Wall Street Journal
Pension-Fund Adviser Urges No Votes Against Three on Tesla Board; CtW says Kimbal Musk, James Murdoch and Antonio Gracias 'lack independence, industry relevant knowledge'
Author: Prang, Allison
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Pension-fund adviser CtW Investment Group has encouraged Tesla Inc. shareholders to vote against three of the company's directors running for re-election.
The firm is encouraging shareholders to vote down the re-election of Kimbal Musk, the brother of Tesla Chief Executive Elon Musk, venture capitalist Antonio Gracias and 21st Century Fox Chief Executive James Murdoch.
CtW works with union-sponsored pension funds and in its letter described them as "substantial Tesla shareholders."
CtW, which did something similar with Equifax last month
, said in a letter to shareholders that "Tesla has failed to hit critical production milestones" in the past year and has renominated people "who exemplify the company's failure to evolve."
"Its continuing success looks more tenuous than ever," CtW said.
"All of this year's director nominees lack independence, industry relevant knowledge, and a track record of effective service in a governance role," CtW went on to say. Tesla has nine directors total on its board.
Firms associated with Kimbal Musk and Antonio Gracias didn't respond to a request seeking comment. 21st Century Fox didn't provide comment on behalf of Mr. Murdoch, and Tesla didn't respond to an email request seeking comment.
In the past, Tesla had been criticized for its board not being independent enough
.
James Murdoch is a director on the board of News Corp, the parent company of The Wall Street Journal. His father, Rupert Murdoch, is executive chairman.
Tesla will hold its yearly meeting June 5.
Tesla recently missed its target for producing its Model 3 vehicle. The company had aimed by the end of March to make 2,500 of the Model 3 cars a week
, but produced about 20% less than that around the end of the month and beginning of April.
Last year, the company had a quarterly average negative cash flow of about $1 billion. If the company doesn't increase production, analysts have said it would need to fund-raise if that continued.
Shares of Tesla have fallen 5.8% in the past 12 months.
Write to Allison Prang at allison.prang@wsj.com
Credit: By Allison Prang
Subject: Stockholders; Boards of directors
People: Murdoch, Rupert Musk, Elon
Company / organization: Name: CtW Investment Group; NAICS: 525110; Name: 21st Century Fox; NAICS: 515120; Name: Wall Street Journal; NAICS: 511110; Name: News Corp; NAICS: 511110, 515120, 551112; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 9, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2036218220
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2036218220?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-09
Database: The Wall Street Journal
U.S. Safety Investigators Examine Another Fatal Tesla Crash; It is the fourth open federal probe involving one of the company's vehicles
Author: Campo-Flores, Arian; Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: FORT LAUDERDALE, Fla.--A U.S. transportation-safety agency said it would begin examining the fiery crash of a Tesla Inc. Model S car that killed two teenagers here Tuesday evening, marking the fourth active federal probe involving the company's vehicles.
The National Transportation Safety Board said Wednesday it is initially focusing its latest investigation on the emergency response to the fire created by the electric car's lithium-ion battery. The agency added that at this time it doesn't anticipate Tesla's driver-assistance system Autopilot being part of the investigation.
The driver and front-seat passenger of the 2014 Model S sedan were killed after the car veered off the roadway and into a concrete wall, bursting into flames, local police said. A third passenger was ejected from the car and taken to the hospital.
Tesla said it is working with local authorities. It noted that high-speed collisions can result in fire "regardless of the type of car."
"We have not yet been able to retrieve the logs from the vehicle, but everything we have seen thus far indicates a very high-speed collision and that Autopilot was not engaged," a Tesla spokesman said in a statement.
The NTSB, which has no regulatory mandate but has influence over transportation safety, is investigating three other traffic incidents involving Tesla vehicles, including a fatal crash on March 23 that fueled questions about the safety of Autopilot.
In that crash, which occurred south of San Francisco, a Model X sport-utility vehicle collided with a highway barrier and caught fire after hitting two other vehicles. The NTSB initially said it was reviewing the postcrash fire and steps to remove the vehicle safely from the scene.
Tesla later said
that the vehicle's Autopilot was engaged leading up to the crash and that the driver's hands weren't detected on the steering wheel for six seconds prior to the collision. Tesla and the NTSB waded into a public feud over the disclosure of that information.
Tesla has been aggressive in deploying the driver-assistance system, citing safety improvements while also cautioning that it doesn't turn the car into a self-driving car and the user must remain alert. Experts, however, say that drivers have a hard time remaining engaged in driving as automation in a vehicle increases.
The NTSB is also investigating a battery fire linked to a Model X that barreled into a home's garage in Lake Forest, Calif., in August 2017, and the crash of a Model S into the back of a firetruck near Culver City, Calif., in January. The local fire department has said the driver in the January crash claimed Autopilot was engaged at the time of the incident.
In the latest crash, which occurred at about 6:46 p.m. Tuesday on Seabreeze Boulevard in Fort Lauderdale, the vehicle's speed "is believed to have been a factor in the traffic crash," according to a statement released by the local police.
Larry Groshart, who lives across the street from the site where the crash occurred, said he witnessed the accident from his driveway. That stretch of Seabreeze Boulevard--a main thoroughfare also known as Highway A1A--is known locally as "dead man's curve," he said.
Heading south, as the Tesla was, drivers can see a yellow warning light flashes atop a 25 mile-an-hour speed-limit sign before the road bends markedly to the left. The car crashed along that curve, police said.
Mr. Groshart said the Tesla appeared to be driving much faster than 25 mph. He heard tires screech and saw the vehicle sideswipe a concrete wall in front of a home. He said it then collided against another concrete wall roughly 10 feet ahead and burst into flames, leaving a large vertical gash along that wall.
"Think of the amount of energy it took to break off that wall," he said.
Mr. Groshart, who didn't realize at the time that the vehicle was a Tesla, said that the flames didn't appear to be from gas and that there was no smoke.
Write to Arian Campo-Flores at arian.campo-flores@wsj.com and Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Arian Campo-Flores and Tim Higgins
Subject: Aircraft accidents & safety; Investigations; Vehicles
Location: Culver City California United States--US San Francisco California
Company / organization: Name: Tesla Inc; NAICS: 336999; Name: National Transportation Safety Board; NAICS: 926120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 10, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: Eng lish
Document type: News
ProQuest document ID: 2036495639
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2036495639?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-10
Database: The Wall Street Journal
Business News: NTSB Probes Fatal Crash Of Tesla Car in Florida
Author: Campo-Flores, Arian; Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 May 2018: B.3.
ProQuest document link
Abstract: None available.
Full text: FORT LAUDERDALE, Fla. -- A U.S. transportation-safety agency said it would begin examining the fiery crash of a Tesla Inc. Model S car that killed two teenagers here Tuesday evening, marking the fourth active federal probe into the company's vehicles.
The National Transportation Safety Board said Wednesday it is initially focusing its latest investigation on the emergency response to the fire created by the electric car's lithium-ion battery. The agency added that at this time it doesn't anticipate Tesla's driver-assistance system Autopilot being part of the investigation.
The driver and front-seat passenger of the 2014 Model S sedan were killed after the car veered off the roadway and into a concrete wall, bursting into flames, local police said. A third passenger was ejected from the car and taken to the hospital.
Tesla didn't immediately respond to a request for comment.
The NTSB, which has no regulatory mandate but has influence over transportation safety, is investigating three other traffic incidents involving Tesla vehicles, including a fatal crash on March 23 that fueled questions about the safety of Autopilot.
In that crash, which occurred south of San Francisco, a Model X sport-utility vehicle collided with a highway barrier and caught fire after hitting two other vehicles. The NTSB initially said it was reviewing the postcrash fire and steps to remove the vehicle safely from the scene.
Tesla later said that the vehicle's Autopilot was engaged leading up to the crash and that the driver's hands weren't detected on the steering wheel for six seconds before the collision. Tesla and the NTSB feuded over the disclosure of that information.
Credit: By Arian Campo-Flores and Tim Higgins
Subject: Traffic accidents & safety; Vehicles; Fatalities; Accident investigations
Location: Florida
Company / organization: Name: Tesla Inc; NAICS: 336999; Name: National Transportation Safety Board; NAICS: 926120
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2018
Publication date: May 10, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2036663334
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2036663334?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-18
Database: The Wall Street Journal
The Upscale Way to Prepare for Doomsday--from $79,500 Teslas to $275 Jeans; Rather than stockpile beans, 'bonus preppers' ready themselves for the apocalypse with the finer things: luxury cars, chic water filters, cunning energy systems and fashion fit for Armageddon
Author: Bercovici, Jeff
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Corrections & Amplifications
Nick Robbins and his fiancée, who works for Zero Mass Water, have a water system developed by that company installed on their home. An earlier version of this article incorrectly called his fiancée was his wife, and the article failed to mention that she is employed by the company that makes the water system. (May 15, 2018)
DON'T CALL Nick Robbins a Doomsday prepper. Sure, Mr. Robbins, 50, a technology lawyer and general counsel for the Health Coach Institute, produces his own drinking water at his Phoenix home -- a move often associated with people who hoard canned goods and watch YouTube tutorials on how to field-dress a wound. But, for the most part, it was health considerations rather than apocalyptic fears that inspired him and his fiancée to go off the water grid.
With two small children, the couple was worried about pollutants like heavy metals and plastics in Phoenix's aquifers, and who-knows-what leaching from their 80-year-old pipes into their tap water. When Mr. Robbins heard about a rooftop system that uses solar energy to condense atmospheric moisture and transform it into drinkable H20, he was intrigued: "I thought to myself, if there's one thing that we're putting in our bodies every day, making that pure is going to be a good foundation of my family's health."
Having lived in Florida during Hurricane Wilma in 2005, Mr. Robbins felt losing access to drinking water for weeks or even months was a plausible scenario -- a contingency to plan for, not just some dystopian fantasia. So last April he purchased the $4,000 Source water system, developed by Zero Mass Water (zeromasswater.com
), and had it installed on his home. (Mr. Robbins's fiancée is employed by the company.) "Basically, I've become my own utility," he said. "Water security and health sort of go together in my mind." But while the system's value in a crisis helped sell him on it, Mr. Robbins said he probably wouldn't have spent the money on that basis alone. "It wasn't a situation where I was a prepper," he assured me. "I don't have guns or anything."
Mr. Robbins exemplifies a species you might call "bonus preppers." These folks still anxiously consider the catastrophes, both natural and man-made, that threaten to disrupt our functioning society and turn us all into lizard-chomping "Mad Max" extras. But aesthetically minded bonus preppers fixate less on the end of the world as we know it, and more on feeling fine in the here and now. Beyond societal escape hatches, they're looking for ways to disaster-proof their lifestyles while simultaneously upgrading them, primarily by buying handsome stuff.
That upgrade might come, say, in the form of a Tesla Model X (from $79,500, tesla.com
). This fine, upscale vehicle happens to be the first family car to advertise its interior as a safe place to ride out germ warfare attacks, thanks to a climate-control setting called "Bioweapon Defense Mode." At the push of a button, the cabin pressurizes and a high efficiency particulate air filter (HEPA) helps protect riders from bacterial agents like anthrax and plague. (Jason Calacanis, an angel investor and Model X
owner, said he uses bioweapon mode daily to help with his asthma.)
Or it might involve a pair of hip, Armageddon-inspired "End of Worlds" jeans from the fashion atelier Outlier ($275, outlier.nyc
). Made with Dyneema, a synthetic material billed as "the world's strongest fiber," the pants are "slash-resistant" and feature a gusseted crotch for ease of fleeing. On Outlier's website, they're touted as likely to survive the owners; on Reddit, wearers variously praise them as amenable to concealed-carrying and minimalist travel.
For Chris Tolles, CEO of the digital publishing company Topix, being ready for anything in earthquake-prone San Francisco involves owning a pair of Land Rovers
, including a 2000 Discovery modded for off-roading, and a swoopy 1995 BMW R1100 GS motorcycle. The latter, in particular, was bought with some thought to escaping during a crisis. "The motorcycle is a worst-case-scenario thing if it is just incumbent to get the hell out of Dodge," said Mr. Tolles, 50, who also keeps an AR-15 rifle and a sizable supply of canned food. While he rides the motorcycle sparingly, he derives more enjoyment from it than from his sensible sealed rations. Whereas a true prepper might choose a bug-out bike like the Rokon Trail-Breaker ($7,575, rokon.com
), a two-wheeled ATV capable of towing 2,000 pounds, fording rivers or climbing 60 percent grades, Mr. Tolles wanted something stylish and fun--but still capable of threading highways jammed with cars during a mass evacuation.
Obtaining a two-wheeled bug-out vehicle has been on my mind since last October, when the most damaging wildfires in California's history rampaged through Sonoma and Napa counties near our Berkeley, Calif., home. Smoke from the fires blanketed the Bay Area, inspiring my wife and me to take our infant daughter on an impromptu road trip until the daily air-quality alerts had abated. I'd already been planning to buy a cargo bike for local errands. Now I was wondering if it would be worth it to spend $4,000 or more on an electric-assist model that could carry 300 pounds, travel 50 miles on a charge--and make it over the steep ridgeline east of our house should major roads out of town be impassable.
I ran this scenario past Travis Wittwer, co-founder of the Cargo Bike Disaster Trials, a series of events in which participants simulate the coordination of disaster relief efforts using only cargo bikes. He suggested I think less in terms of how my family could use the bike to escape town and focus instead on how it would help us wait out a disaster at home. With the right bike, he pointed out, I could fetch heavy supplies from miles away even if the roads were destroyed or gas stations ran out. An e-bike might be able to haul more, but its extra weight would make it less useful if power outages persisted. The most important thing, said Mr. Wittwer, was to have a bike that fit our daily needs. "The whole premise of resilience is living your life today so that when a situation occurs, it's not an abrupt change of lifestyle," he said. "People who do that are the ones who are going to do better in disasters."
Rationality is the essence of bonus prepping. It's about adding survival value to the things you already use and love versus loading up on stuff you'll only use if the world ends. "Most of our audience doesn't even identify with 'prepping' for anything more serious than natural disasters," said John Adama, who runs The Prepared (theprepared.com
), a how-to website for "sane preppers." He advocates being prepared in ways that align with a non-lunatic life: staying fit, keeping a several-weeks supply of groceries, owning sturdy hiking boots and a "everyday carry" pocketknife like the Kershaw Concierge ($60, kershaw.kaiusaltd.com
) or Leatherman Wave Plus Multitool ($100, leatherman.com
). Mr. Adama, a pseudonym he uses to run his site, started The Prepared in 2017 after spending a decade coaching would-be Silicon Valley survivalists on everything from navigating without GPS to obtaining gun permits. Many of his students were eager to learn self-sufficiency not just as a precaution but in the pursuit of new lifestyles, such as nomadic existence in a van.
That's a shift Kiki Bandilla, who recently purchased the Self-Reliance Expo trade show, is trying to capture. Ms. Bandilla, a corporate sales and marketing executive in Denver, is in the middle of rebranding the expo as the "Self-Reliance and Simple Life Experience" to distance it from its survivalist roots. She eschews firearms, a staple of most prepping expos, to ensure that people of all political stripes find her events welcoming, and strives to appeal to health-driven consumers who are keen, for instance, to keep their own charming bees and chickens. (One of her exhibitors, Rent the Chicken, supplies would-be urban farmers with laying hens, coops and feed; costs vary by market but range from around $400 to $1,100 for six months, rentthechicken.com
). "This is about everyday survival," Ms. Bandilla said. "It takes a lot of blood, sweat and tears, but it's a very meaningful and intentional life."
"Meaningful" and "intentional" are words you'd expect to hear at one of Gwyneth Paltrow's
$2,000-a-ticket holistic-wellness summits, not an expo where people comparison-shop gas masks. And that's the point. At a time when worrying about the apocalypse (or worse) feels worryingly unparanoid, bonus prepping helps you feel like you've gained a little control over the future without becoming one of "those people."
I'm still deliberating which cargo bike to buy, but in the meantime, we've picked up a Blueair air purifier ($99, blueair.com
) to help during the next round of wildfires and a Berkey countertop water filter (from $233, theberkey.com
). Gravity-powered, the sleek stainless steel system cleans even the murkiest pond water of viruses, bacteria, pathogens and other nastiness. If an earthquake were to knock out our drinking water for a few months, we could fill it with water from a swimming pool or fish tank and be just fine. Until the End of Days, it sits next to the sink and really ties the room together.
JUDGEMENT-DAY UPGRADE // 5 attractively designed items to enhance your daily life and equip you for worst-case scenarios
Tesla Powerwall
To have a truly "islanded" house that's independent of the electric grid, you need a way to store solar-generated energy. Tesla's Powerwall can detect major outages and continuously run a 1,000-square-foot home for at least seven days. $6,600 plus installation, tesla.com
Leatherman Wave Plus Multitool
An "everyday carry" knife is an inexpensive way to up your preparedness, said John Adama of The Prepared. He recommends the Leatherman Wave Plus, which comes packed with 18 tools including pliers and wire cutters. And it's stylish and rugged to boot. $100, leatherman.com
Outlier 'End of Worlds' Jeans
The synthetic fabric in these pants, called Dyneema, is so strong and light it's used in motorcycle-racing garments and artificial ligaments. But its low vaporization point makes the jeans vulnerable to open flames. Outrunning tsunamis, yes; escaping volcanoes, no. $275, outlier.nyc
Berkey Countertop Water Filter
Water is the No. 1 survival need. It's also heavy, takes up space and goes bad if stored too long. The Berkey looks handsome on a counter, is light enough to travel with and can render even pool or pond water safe to drink, and tap water downright delicious. From $233, theberkey.com
Yuba Spicy Curry Electric Cargo Bike
Amid a disaster, two wheels beat four. But your kid's Huffy isn't getting the job done. Equipped with a Bosch Performance Line CX Motor, the Spicy Curry cargo bike is powerful enough to haul 300 pounds of people or supplies. Its 60-mile max battery range can get you out of town. And, unlike a motorcycle, when the juice runs out, you can keep going on pedal power. $4,499, yubabikes.com
Credit: By Jeff Bercovici
Subject: Clothing; Automobiles; Earthquakes; Disasters; Drinking water; Roads & highways
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 10, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2036814435
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2036814435?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-15
Database: The Wall Street Journal
Tesla's Engineering Chief Takes Leave of Absence at Pivotal Moment; Doug Field is stepping away for several weeks, the electric-car maker said
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc.'s top engineer overseeing vehicle development is taking a leave of absence from the company at a crucial moment when the electric-car maker is struggling to boost production of the Model 3 sedan, according to people familiar with the matter.
Doug Field, Tesla's senior vice president of engineering, is stepping away from the company for several weeks, these people said. One person described the absence as a "six-week sabbatical," and Tesla declined to say when he would come back.
"Doug is just taking some time off to recharge and spend time with his family," a Tesla spokesman said in a statement. "He has not left Tesla."
Mr. Field couldn't be reached for comment. His absence was announced to some employees on Thursday, one of the people said.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Leaves of absence
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 11, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2037217474
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2037217474?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-11
Database: The Wall Street Journal
Tesla's Engineering Chief Takes Leave of Absence at Pivotal Moment; Doug Field is stepping away for several weeks, according to people familiar with the matter
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc.'s top engineer overseeing vehicle development is taking a leave of absence from the company at a crucial moment when the electric-car maker is struggling to boost production of the Model 3 sedan
, according to people familiar with the matter.
Doug Field, Tesla's senior vice president of engineering, is stepping away from the company for several weeks, these people said. One person described the absence as a "six-week sabbatical," and Tesla declined to say when he would come back.
"Doug is just taking some time off to recharge and spend time with his family," a Tesla spokesman said in a statement. "He has not left Tesla."
Mr. Field couldn't be reached for comment. His absence was announced to some employees on Thursday, one of the people said.
Mr. Field has been a key leader at the Silicon Valley auto maker since joining in 2013 from Apple Inc. He oversees the engineering of Tesla's vehicles
, and last year he was also given oversight of production to better align the two efforts. That changed this spring when Chief Executive Elon Musk said he retook control of production.
The Silicon Valley auto maker is at a critical juncture as it tries to produce enough Model 3 cars to generate cash to fund the business and instill confidence in investors that the company can create its first mass-market vehicle.
Tesla has struggled to crank up Model 3 production since it began in July at the company's Fremont, Calif., factory. It has twice delayed a critical goal of producing 5,000 Model 3s a week, expecting now to meet it by around the end of June. Any further delays could significantly impair Tesla's cash position, analysts said.
In April, Mr. Musk wrote on Twitter that he would handle direct oversight of production and was back to sleeping on the factory floor. At the time, he praised Mr. Field as "one of the world's most talented engineering execs."
In a little over a year, Tesla has seen many of its senior leaders leave, including its chief financial officer and sales president.
Tesla has a history of key executives departing on so-called sabbaticals. Jerome Guillen, Tesla's current vice president of truck and programs, for example, took a sabbatical in 2015 from his role as vice president of world-wide sales and service only to return in the new role. He had led development of the Model S sedan.
The hiring of Mr. Field from Apple, where he was vice president of Mac hardware engineering, was touted as a win for Mr. Musk, who had big ambitions for Tesla. Mr. Field had also worked at Ford Motor Co. and Segway, giving him unique experience in both the tech and autos industry.
"Tesla's future depends on engineers who can create the most innovative, technologically advanced vehicles in the world," Mr. Musk said in a statement at the time. "Doug's experience in both consumer electronics and traditional automotive makes him an important addition to our leadership team."
The challenge for Tesla has been to implement Mr. Musk's vision for the company's cars with the hard reality of building them.
The Model X sport-utility vehicle, which began production in 2015, faced months of challenges in ramping up assembly. Mr. Musk had said the company learned from those troubles and would design the Model 3 for easier assembly.
In 2016, Mr. Musk suggested Tesla would make as many as 200,000 Model 3s sedans, which are supposed to start at $35,000, in the second half of last year, a milestone the company came nowhere near meeting. Tesla instead made about 2,700 during that period. The company hasn't yet begun making the lower-priced version.
The CEO has since said Tesla relied too much on automation to make the Model 3. "A step change in manufacturing doesn't come without its challenges, particularly early in the process, and we made a mistake by adding too much automation too quickly," Mr. Musk told shareholders in Tesla's quarterly update earlier this month.
Tesla is facing a cash crunch. The company finished March with $2.7 billion in cash on hand. While Mr. Musk says the company won't need to raise more money this year, many analysts say they expect Tesla will raise additional capital.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Tesla's Factory in a Fishbowl
(May 7)
* Tesla's Numbers Are Even More Dramatic Than Its CEO
(May 5)
* Tesla's Elon Musk Turns Conference Call Into Sparring Session
(May 3)
* Tesla Continues to Burn Through Cash
(May 2)
* Tesla Halts Model 3 Production Again
(April 16)
* Tesla Misses Model 3 Production Goal but Shows Progress
(April 3)
Credit: By Tim Higgins
Subject: Automobile industry; Engineering; Automation; Leaves of absence; Engineers; Vehicles
Location: Silicon Valley-California
People: Musk, Elon
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Twitter Inc; NAICS: 519130; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 12, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2037230998
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2037230998?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-12
Database: The Wall Street Journal
Top Tesla Engineer Takes Leave of Absence
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 May 2018: B.4.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc.'s top engineer overseeing vehicle development is taking a leave of absence from the company at a crucial moment when the electric-car maker is struggling to boost production of the Model 3 sedan, according to people familiar with the matter.
Doug Field, Tesla's senior vice president of engineering, is stepping away from the company for several weeks, these people said. One person described the absence as a "six-week sabbatical," and Tesla declined to say when he would come back.
"Doug is just taking some time off to recharge and spend time with his family," a Tesla spokesman said in a statement. "He has not left Tesla."
Mr. Field couldn't be reached for comment. His absence was announced to some employees on Thursday, one of the people said.
Mr. Field has been a key leader at the Silicon Valley auto maker since joining in 2013 from Apple. He oversees the engineering of Tesla's vehicles, and last year he was also given oversight of production to better align the two efforts. That changed this spring when Chief Executive Elon Musk said he retook control of production.
The auto maker is at a critical juncture as it tries to produce enough Model 3 cars to generate cash to fund the business and instill confidence in investors that the company can create its first mass-market vehicle.
Tesla has struggled to crank up Model 3 production since it began in July at the company's Fremont, Calif., factory. It has twice delayed a critical goal of producing 5,000 Model 3s a week, expecting now to meet it by around the end of June. Any further delays could significantly impair Tesla's cash position, analysts said.
In April, Mr. Musk wrote on Twitter that he would handle direct oversight of production and was back to sleeping on the factory floor. At the time, he praised Mr. Field as "one of the world's most talented engineering execs."
In a little over a year, Tesla has seen many of its senior leaders leave, including its chief financial officer and sales president.
Tesla has a history of key executives departing on so-called sabbaticals. Jerome Guillen, Tesla's current vice president of truck and programs, for example, took a sabbatical in 2015 from his role as vice president of world-wide sales and service only to return in the new role. He had led development of the Model S sedan.
The hiring of Mr. Field from Apple, where he was vice president of Mac hardware engineering, was touted as a win for Mr. Musk, who had big ambitions for Tesla. Mr. Field had also worked at Ford Motor Co. and Segway, giving him unique experience in both the tech and auto industries.
Credit: By Tim Higgins
Subject: Automobile industry; Engineering; Leaves of absence
Location: Silicon Valley-California
People: Musk, Elon Field, Doug
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2018
Publication date: May 12, 2018
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2037347744
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2037347744?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-22
Database: The Wall Street Journal
Tesla Executive Leaves for Alphabet Self-Driving-Car Unit Waymo; Matthew Schwall had been Tesla's main technical contact with U.S. safety investigators
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: A senior Tesla Inc. executive, who was the company's main technical contact with U.S. safety investigators, has left for rival Waymo LLC, according to people familiar the decision.
Matthew Schwall, who had been the director of field performance engineering at Tesla, exited the company as the National Transportation Safety Board has been investigating multiple crashes involving the electric vehicles. Mr. Schwall's exit coincides with Tesla's announcement Friday that its engineering chief, Doug Field, was taking a leave of absence
.
Mr. Schwall began at Waymo last Monday, where he joined the company's safety team led by former National Highway Traffic Safety Administration Deputy Administrator Ron Medford, according to a person familiar with the move. The former Tesla executive will work on a variety of self-driving car safety issues in his new role, the person said.
Mr. Schwall couldn't be reached for comment, though a person familiar with his move said it was unrelated to issues Tesla is dealing with regarding Autopilot. Tesla didn't respond to a request to comment. Waymo confirmed Mr. Schwall has begun working for the Alphabet Inc. unit.
The former Tesla executive joined the auto maker nearly four years ago. According to his LinkedIn biography, Mr. Schwall served as the "primary technical contact" at Tesla with safety regulation agencies including the NTSB and the NHTSA, the regulatory body that oversees the auto industry.
In April, the NTSB said it kicked Tesla off the team
probing a fatal crash of a Model X sport-utility vehicle south of San Francisco in late March. The agency asserted the auto maker violated a formal agreement when it released detailed information about the crash before government investigators had vetted it.
Tesla said at the time that it withdrew from the probe and disclosed that Autopilot, the vehicle's driver assistance system, was engaged before the collision with a highway barrier, and the company blamed the driver for not taking control of the car in time.
This week, the NTSB opened its fourth investigation
into a crash involving a Tesla vehicle after a Model S sedan veered off the road in Fort Lauderdale, Fla. The agency has said it was initially reviewing the emergency response to the vehicle's battery fire that occurred after the crash. Tesla has said it hadn't retrieved the vehicle logs from the car but that it appeared Autopilot wasn't engaged.
It also emerged this week that the batteries in the Model X that crashed on March 23 near San Francisco reignited twice later that day at the storage yard and again six days later, according to a memo from the suburb's fire department. The memo was earlier reported on
by KTVU-TV in the San Francisco area.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Tesla's Engineering Chief Takes Leave of Absence at Pivotal Moment
* Tesla Blames Driver in Fatal Car Crash
(April 11)
* NTSB 'Unhappy' With Tesla Over Crash Disclosures
(April 1)
* U.S. Safety Agency Launches Investigation Into Tesla Fires
(Nov. 19, 2013)
Credit: By Tim Higgins
Subject: Automobile industry
Location: United States--US
Company / organization: Name: Waymo LLC; NAICS: 336111; Name: Alphabet Inc; NAICS: 551114; Name: National Transportation Safety Board; NAICS: 926120; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/ a
Publication year: 2018
Publication date: May 12, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2037725682
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2037725682?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-13
Database: The Wall Street Journal
In Self-Driving-Car Road Test, We Are the Guinea Pigs; Drivers of Tesla's semiautonomous cars are helping to train the artificial intelligence that could one day run fully autonomous driving systems
Author: Mims, Christopher
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Even if you don't own a Tesla, you are, or might soon become, part of the company's massive experiment in automotive safety.
There are already more than 200,000 Teslas on the road, and all of them built after early 2015 are capable of Autopilot, that is, semiautonomous driving. This makes drivers, and anyone encountering these cars on the road, guinea pigs who are helping to train the artificial intelligence Tesla ultimately hopes to use for a fully autonomous driving system.
During this experiment, at least two people have died in driver's seats of Teslas that crashed while Autopilot was engaged
, but Chief Executive Elon Musk argues the system continues to improve
and, overall, Teslas are safer than they would be without the technology
.
Alphabet Inc.'s Waymo and Uber Technologies Inc., among others, are also road testing on public streets. They're experimenting at much smaller scales, though an Uber autonomous vehicle struck and killed a pedestrian
in March. Subsequently, Uber suspended its self-driving-car program. CEO Dara Khosrowshahi has said it will resume within a few months.
These experiments are based on a number of assumptions about the abilities of AI, and the compatibility of humans and partially autonomous driving systems. If automobile companies are wrong about any of them--and there's reason to believe they are--we'll almost certainly see more self-driving car accidents, as semiautonomous technology becomes commonplace.
That isn't to say we shouldn't be on this path. Every year, some 40,000 people die
in the U.S. in traffic-related accidents--a situation made worse by distracted driving
.
We have established methods for responsibly rolling out life-saving new technologies before--think of clinical trials for new drugs, or seatbelts and airbags--and we can do it again. But it might mean pumping the brakes on the rollout of self-driving cars.
Tesla's dangerous game
When engaged, Autopilot keeps the car within in its lane, can automatically change lanes, and maintains a safe distance from cars ahead and behind. When it senses a dangerous situation it alerts the driver, whether or not Autopilot is engaged. Sometimes, however, it's up to the driver to realize the Autopilot system isn't doing what it should.
Tesla says that its cars with autonomous driving technology are 3.7 times safer than the average American vehicle
. It's true that Teslas are among the safest cars on the road, but it isn't clear how much of this safety is due to the driving habits of its enthusiast owners (for now, those who can afford Teslas) or other factors, such as build quality or the cars' crash avoidance technology, rather than Autopilot.
In the wake of a fatal 2016 crash, which happened when Autopilot was engaged, Tesla cited a report
by the National Highway Traffic Safety Administration as evidence that Autopilot mode makes Teslas 40% safer. NHTSA recently clarified
the report was based on Tesla's own unaudited data, and NHTSA didn't take into account whether Autopilot was engaged. Complicating things further, Tesla rolled out an auto-braking safety feature
--which almost certainly reduced crashes--shortly before it launched Autopilot.
There isn't enough data to independently verify that self-driving vehicles cause fewer accidents than human-driven ones. A Rand Corp. study
concluded that traffic fatalities already occur at such relatively low rates--on the order of 1 per 100 million miles traveled
--that determining whether self-driving cars are safer than humans could take decades.
What we do have is evidence--acknowledged in Tesla's own user manuals--that Tesla's semiautonomous driving system is easily fooled by bright sunlight, faded lane markings, seams in the road, etc. Researchers continue to document other ways to trick these systems, as well.
Tesla emphasizes its system is driver-assist technology, not full autonomy, and blamed the driver in the most recent crash that occurred when the system was engaged. Yet Tesla drivers
and news reports
suggest that in some cases, the only thing keeping drivers from getting into Autopilot-related accidents is their own reflexes.
The company promised a cross-country drive accomplished entirely by its self-driving tech sometime in 2017 but decided the system wasn't yet ready
.
AI's limitations
None of this surprises experts who understand the AI at the heart of autonomous driving systems. Deep learning--the "intelligent" component of these systems--is "brittle, opaque and shallow
," says Gary Marcus, a professor of psychology and neural science at New York University and the former head
of Uber's AI lab
.
AI is brittle because it can't carry over insights from one context to another, opaque because humans can't evaluate its neuron-like tangle of connections, and shallow because it's easy to fool. You can't just throw more deep learning at a problem and expect it to be as good as a human, says Dr. Marcus.
Decades of research on autopilot systems--whether in airplanes or automobiles--have shown that the most dangerous kind is that which requires the driver to take action when it fails. Less sophisticated semiautonomous driving systems, like adaptive cruise control and enhanced warnings
, have been shown to increase safety. Full automation, where ultimately there's no steering wheel or gas pedal, has only begun to be road tested
.
Alphabet's Waymo decided it was too dangerous to let drivers take control when needed, and skipped right to a fully self-driving ride-share service, Waymo CEO John Krafcik has said. According to the company, and many who research self-driving technology
, a system that never asks a driver to take over is safer
than making potentially tricky machine-human handoffs.
Tesla promised to release safety data on its self-driving tech regularly starting next quarter. It isn't clear what kind of data it will release, but experts say public sharing of data, from all makers of autonomous vehicles, is the only way to ensure proper evaluation of the safety of these new technologies. Given that we already evaluate the safety of every other part of a motor vehicle in this way, it just makes sense.
Write to Christopher Mims at christopher.mims@wsj.com
Related
* Big Test for Tesla as Officials Step Away
Credit: By Christopher Mims
Subject: Fatalities; Artificial intelligence; Traffic accidents & safety; Vehicles
Location: United States--US New York
People: Musk, Elon
Company / organization: Name: Uber Technologies Inc; NAICS: 511210, 518210; Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Rand Corp; NAICS: 541720; Name: Alphabet Inc; NAICS: 551114; Name: New York University; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 13, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2037943209
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2037943209?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-14
Database: The Wall Street Journal
Tesla's Fundraising Options Get Thornier; Model 3 setbacks and short sellers complicate the electric-vehicle giant's options for raising cash
Author: Goldfarb, Sam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: The time for Tesla Inc. to raise cash is fast approaching, say many analysts and investors, but the company's fundraising options are fraught with complications.
Led by Chief Executive Elon Musk, the Palo Alto, Calif., firm has built a $50 billion market capitalization out of its promise to lead the way to a world of driverless electric cars. But in recent quarters it has struggled to build its first mass-market sedan, the Model 3, while burning through billions of dollars
--a combination that is beginning to test investor patience
.
While Mr. Musk has said Tesla won't need to raise more money
this year, not many analysts agree. To generate cash, they say Tesla needs to be able to consistently build around 5,000 Model 3s a week. That's more than double the pace the company said it reached at the end of the first quarter, and a target the company has twice set back
. Tesla now says it expects to make that many cars by the end of the second quarter.
The longer it takes Tesla to meet its production targets
, the "greater the financial risk," said Efraim Levy, a senior equity analyst at CFRA Research. Tesla shares have fallen roughly 2.2% this year.
No fundraising option is without drawbacks. Issuing new shares would dilute shareholders and likely drive down the share price, potentially rattling creditors and pushing up borrowing costs--a chain that could result in further share declines. And the falling price of Tesla's unsecured bond means new debt could lead to significant added interest expense.
Tesla could also sell convertible bonds, a hybrid of debt and equity that has been the company's favored means of raising cash in recent years. But that could prove more challenging due to the unique dynamics of the market. Many investors, such as hedge funds, will buy convertible bonds only if they can also bet against, or short, the issuer's shares--a strategy known as convertible bond arbitrage.
Normally, that isn't a problem, as investors can easily short shares in many large firms by borrowing in the stock-loan market and then selling, with the expectation of repurchasing at lower prices later. But Tesla is now the most shorted stock in the U.S. by dollar volume, making it increasingly costly and difficult to borrow its shares.
As of Thursday, investors were short roughly 39 million Tesla shares, worth nearly $12 billion, or about 83% of what is likely available in the stock-loan market, according to financial-analytics firm S3 Partners. The increased demand for shares to bet against has pushed the fee required to borrow Tesla's stock to as high as 6% of the borrowed amount in the past month, from less than 1% at the start of the year. It was 3.6% this past week.
"If there isn't enough stock available, or the rate is so high, the hedge becomes untenable," said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, who previously worked on the stock-loan desk at Morgan Stanley.
Since the start of 2013, Tesla has issued $3.9 billion of convertible bonds, $3.8 billion of shares and $2.8 billion of unsecured bonds and asset-backed securities, according to Dealogic.
Convertible bonds have been appealing for Tesla because they pay lower interest rates than traditional debt and don't immediately dilute shares, unlike a stock offering. The securities typically pay out regular coupons and are either repaid at maturity or converted into shares, depending on the stock performance over the specified period
Tesla finished the first quarter with $2.7 billion in cash on hand, compared with $3.4 billion at the end of last year. Analysts surveyed by FactSet predict the company will burn through $1.2 billion in the remainder of the year. It will need to pay down a $230 million convertible bond this November if its stock doesn't reach a conversion price of $560.64, and a $920 million convertible note next March if the stock doesn't reach $359.87. Shares closed Friday at $301.06.
Tesla's stock, while up in recent sessions, has fallen more than 20% since its peak of $385 in September. Its $1.8 billion unsecured notes due in 2025
, issued at par in August with a 5.3% coupon, recently traded at 88 cents on the dollar for a yield of roughly 7.5%.
The terms of Tesla's bonds allow it to issue at least $3.15 billion of more senior debt secured by collateral, according to Covenant Review, an independent credit-research firm. Such debt would likely save the company in interest expense but could make a future debt sale more difficult by pushing yields higher on its unsecured bonds.
Issuing another $1.8 billion unsecured bond today could require Tesla to pay an interest rate of 8% or higher, based on where its 5.3% notes trade. That would cost the company at least $144 million each year in interest expense, compared with the $95 million expense of its existing bonds.
Related
* Full Disclosure: Tesla's Factory in a Fishbowl
(May 7)
* Heard on the Street: Tesla's Numbers Are Even More Dramatic Than Its CEO
(May 5)
* Elon Musk Taps Brakes on Tesla's Model Y After 3's 'Production Hell'
(May 3)
* Elon Musk Supports His Business Empire With Unusual Financial Moves
(April 27, 2016)
Credit: By Sam Goldfarb
Subject: Investments; Bond issues
Location: United States--US Palo Alto California
People: Musk, Elon
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 13, 2018
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2037954489
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2037954489?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-13
Database: The Wall Street Journal
Tesla Executives Step Away, Adding to Auto Maker's Challenges; Departure of safety liaison comes as engineering chief takes a leave of absence
Author: Higgins, Tim; Goldfarb, Sam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. will be without two important executives just as the electric-car maker struggles to boost production
of its first mass-market vehicle and faces doubts about its ability to raise cash.
Matthew Schwall, who was the company's main technical contact with U.S. safety investigators as the Silicon Valley auto maker races to develop driverless-car technology, left the company
for rival self-driving car company Waymo LLC. His departure comes as the National Transportation Safety Board has been investigating multiple crashes involving Tesla vehicles.
Mr. Schwall's exit comes after Tesla said Friday that its engineering chief, Doug Field, was taking a leave of absence
to recharge and spend time with his family.
Mr. Field is stepping away from the company for several weeks, according to people familiar with the matter. One person described the absence as a "six-week sabbatical" while Tesla declined to say when he would come back.
"He has not left Tesla," a company spokesman said.
Mr. Field, a key leader at the auto maker since joining in 2013 from Apple Inc., oversees the engineering of Tesla's vehicles
, and last year he was also given oversight of production to better align those efforts. That changed this spring, when Chief Executive Elon Musk said he retook control of production.
Tesla is at a critical juncture as it tries to produce enough of its mass-market Model 3 cars to generate cash to fund the business and instill confidence in investors that the company can move beyond being a niche-product maker.
Excitement about Tesla's ability to bring electric vehicles to the masses and then to develop autonomous vehicle technology helped push the company's stock to record levels last year and give it a market value that rivals that of General Motors Co.
But Tesla has struggled to crank up Model 3 output since it began last July in Fremont, Calif. It has twice delayed
a critical goal of producing 5,000 Model 3s a week, more than double the pace the company said it reached at the end of the first quarter. Tesla now says it expects to make that many cars by around the end of the second quarter.
Mr. Musk has said Tesla won't need to raise more money
this year, but the longer it takes Tesla to meet its production targets
the "greater the financial risk," said Efraim Levy, a senior equity analyst at CFRA Research. Tesla shares have fallen roughly 2.2% this year to $301.06.
Tesla finished the first quarter with $2.7 billion in cash on hand, versus $3.4 billion at the end of last year. Analysts surveyed by FactSet predict the company will burn through $1.2 billion in the rest of the year. It will need to pay down a $230 million convertible bond this November if its stock doesn't reach a conversion price of $560.64, and a $920 million convertible note next March if the stock doesn't reach $359.87.
No fundraising option is without drawbacks. Issuing new shares would dilute shareholders and likely drive down the share price, potentially rattling creditors and pushing up borrowing costs--a chain that could result in further share declines. And the falling price of Tesla's unsecured bond means new debt could lead to significant added interest expense.
Tesla also could sell convertible bonds, a hybrid of debt and equity that has been the company's favored means of raising cash in recent years. But that could prove more challenging because of the unique dynamics of the market. Many investors, such as hedge funds, will buy convertible bonds only if they can also bet against, or short, the issuer's shares--a strategy known as convertible bond arbitrage.
Normally, that isn't a problem, as investors can easily short shares in many large companies by borrowing in the stock-loan market and then selling, with the expectation of repurchasing at lower prices later. But Tesla is now the most shorted stock in the U.S. by dollar volume, making it increasingly costly and difficult to borrow its shares, a necessary move for shorting.
"If there isn't enough stock available, or the rate is so high, the hedge becomes untenable," said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, who previously worked on the stock-loan desk at Morgan Stanley.
Neither Mr. Schwall nor Mr. Field could be reached for comment. Waymo confirmed Mr. Schwall has begun working for the Alphabet Inc. unit.
Tesla has long been known as a difficult place to work, given its demanding CEO, Mr. Musk
, and key leaders have departed in the past year or so as Tesla prepared to bring out the Model 3.
In early 2017, Jason Wheeler left as chief financial officer after less than two years. He had previously been vice president of finance at Alphabet unit Google, and some Wall Street analysts thought he might be able to instill more conservative targets for the auto maker, which under Mr. Musk's leadership have been wildly off. For example, Mr. Musk once suggested Tesla would make as many as 200,000 Model 3 sedans in the second half of 2017, when, in fact, it built about 2,700.
Mr. Wheeler was succeeded by Deepak Ahuja
, a longtime Musk confidant who spent more than seven years as Tesla financial chief before departing in late 2015.
Then, this past February, Jon McNeill, Tesla's president of global sales, marketing and delivery and service, left to become chief operating officer at ride-hailing service Lyft Inc. Mr. McNeill had joined Tesla in the fall of 2015 when then-head of sales Jerome Guillen took a leave from the auto maker.
In April, Tesla lost Jim Keller, the head of the company's driver-assistance system called Autopilot, which can handle speed and steering in certain situations. That business has been hit with several departures
, as Mr. Musk has pushed the team to put a self-driving car on the road. The CEO had promised to demonstrate a car capable of driving itself from Los Angeles to New York by the end of last year--a milestone the company failed to meet.
Tesla has also recently lost its corporate treasurer and chief accounting officer.
Mr. Schwall, who was director of field-performance engineering, served as "primary technical contact" at Tesla with safety-regulation agencies including the NTSB and the National Highway Traffic Safety Administration, the regulatory body that oversees the auto industry, according to his LinkedIn biography.
The NTSB last week opened its fourth investigation
into a crash involving a Tesla vehicle after a Model S sedan veered off the road in Florida. The agency has said it was initially reviewing the emergency response to the vehicle's battery fire that occurred after the crash. Tesla has said it hadn't retrieved the vehicle logs but that it appeared it crashed at a very high speed and that Autopilot wasn't engaged.
Write to Tim Higgins at Tim.Higgins@WSJ.com and Sam Goldfarb at sam.goldfarb@wsj.com
Related
* Tesla Considered Adding More Tech Warnings to Autopilot System
* Keywords: Drivers Become Guinea Pigs
* Tesla's Fundraising Options Get Thornier
* Tesla's Engineering Chief Takes Leave of Absence at Pivotal Moment
Credit: By Tim Higgins and Sam Goldfarb
Subject: Fatalities; Investments; Investigations; Leaves of absence; Traffic accidents & safety; Engineering; Vehicles
Location: Silicon Valley-California New York United States--US Florida Los Angeles California
People: Musk, Elon
Company / organization: Name: Waymo LLC; NAICS: 336111; Name: LinkedIn Corp; NAICS: 518210; Name: Alphabet Inc; NAICS: 551114; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: National Transportation Safety Board; NAICS: 926120; Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Lyft Inc; NAICS: 518210; Name: Google Inc; NAICS: 334310, 519130; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999; Name: Apple Inc; NAICS: 334111, 334220, 511210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 13, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2038114342
Document URL: https://login.ezproxy.uta.edu/login?url=https: //search.proquest.com/docview/2038114342?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-14
Database: The Wall Street Journal
Big Test for Tesla as Officials Step Away
Author: Higgins, Tim; Goldfarb, Sam
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 May 2018: A.1.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. will be without two important executives just as the electric-car maker struggles to boost production of its first mass-market vehicle and faces doubts about its ability to raise cash.
Matthew Schwall, who was the company's main technical contact with U.S. safety investigators as the Silicon Valley auto maker races to develop driverless-car technology, left the company for rival self-driving car company Waymo LLC. His departure comes as the National Transportation Safety Board has been investigating multiple crashes involving Tesla vehicles.
Mr. Schwall's exit comes after Tesla said Friday that its engineering chief, Doug Field, was taking a leave of absence to recharge and spend time with his family.
Mr. Field is stepping away from the company for several weeks, according to people familiar with the matter. One person described the absence as a "six-week sabbatical" while Tesla declined to say when he would come back.
"He has not left Tesla," a company spokesman said.
Mr. Field, a key leader at the auto maker since joining in 2013 from Apple Inc., oversees the engineering of Tesla's vehicles, and last year he was also given oversight of production to better align those efforts. That changed this spring, when Chief Executive Elon Musk said he retook control of production.
Tesla is at a critical juncture as it tries to produce enough of its mass-market Model 3 cars to generate cash to fund the business and instill confidence in investors that the company can move beyond being a niche-product maker.
Excitement about Tesla's ability to bring electric vehicles to the masses and then to develop autonomous vehicle technology helped push the company's stock to record levels last year and give it a market value that rivals that of General Motors Co.
But Tesla has struggled to crank up Model 3 output since it began last July in Fremont, Calif. It has twice delayed a critical goal of producing 5,000 Model 3s a week, more than double the pace the company said it reached at the end of the first quarter. Tesla now says it expects to make that many cars by around the end of the second quarter.
Mr. Musk has said Tesla won't need to raise more money this year, but the longer it takes Tesla to meet its production targets the "greater the financial risk," said Efraim Levy, a senior equity analyst at CFRA Research. Tesla shares have fallen roughly 2.2% this year to $301.06.
Tesla finished the first quarter with $2.7 billion in cash on hand, versus $3.4 billion at the end of last year. Analysts surveyed by FactSet predict the company will burn through $1.2 billion in the rest of the year. It will need to pay down a $230 million convertible bond this November if its stock doesn't reach a conversion price of $560.64, and a $920 million convertible note next March if the stock doesn't reach $359.87.
Issuing new shares would dilute shareholders and likely drive down the share price, potentially rattling creditors and pushing up borrowing costs. And the falling price of Tesla's unsecured bond means new debt could lead to significant added interest expense.
Tesla also could sell convertible bonds, a hybrid of debt and equity that has been the company's favored means of raising cash in recent years. But that could prove more challenging. Many investors, such as hedge funds, will buy convertible bonds only if they can also bet against, or short, the issuer's shares. But Tesla is now the most shorted stock in the U.S. by dollar volume, making it increasingly costly and difficult to borrow its shares, a necessary move for shorting.
"If there isn't enough stock available, or the rate is so high, the hedge becomes untenable," said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, who previously worked on the stock-loan desk at Morgan Stanley.
Neither Mr. Schwall nor Mr. Field could be reached for comment. Waymo confirmed Mr. Schwall has begun working for the Alphabet Inc. unit.
Tesla has long been known as a difficult place to work, given its demanding CEO, and key leaders have departed in the past year or so.
In early 2017, Jason Wheeler left as chief financial officer after less than two years. He had previously been vice president of finance at Alphabet unit Google, and some Wall Street analysts thought he might be able to instill more conservative targets for the auto maker, which under Mr. Musk's leadership have been wildly off.
Mr. Wheeler was succeeded by Deepak Ahuja, a longtime Musk confidant who spent more than seven years as Tesla financial chief.
Then, this past February, Jon McNeill, Tesla's president of global sales, marketing and delivery and service, left to become chief operating officer at ride-hailing service Lyft Inc.
In April, Tesla lost Jim Keller, the head of the company's driver-assistance system called Autopilot, which can handle speed and steering in certain situations. That business has been hit with several departures, as Mr. Musk has pushed the team to put a self-driving car on the road.
Tesla has also recently lost its corporate treasurer and chief accounting officer.
Mr. Schwall, who was director of field-performance engineering, served as "primary technical contact" at Tesla with safety-regulation agencies including the NTSB and the National Highway Traffic Safety Administration, according to his LinkedIn biography.
The NTSB last week opened its fourth investigation into a crash involving a Tesla vehicle after a Model S sedan veered off the road in Florida. The agency has said it was initially reviewing the emergency response to the vehicle's battery fire that occurred after the crash. Tesla has said it hadn't retrieved the vehicle logs but that it appeared it crashed at a very high speed and that Autopilot wasn't engaged.
Credit: By Tim Higgins and Sam Goldfarb
Subject: Automobile industry; Investigations; Investments; Electric vehicles
Location: United States--US
People: Musk, Elon
Company / organization: Name: Waymo LLC; NAICS: 336111; Name: LinkedIn Corp; NAICS: 518210; Name: Alphabet Inc; NAICS: 551114; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: National Transportation Safety Board; NAICS: 926120; Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Lyft Inc; NAICS: 518210; Name: Google Inc; NAICS: 334310, 519130; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2018
Publication date: May 14, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2038176037
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2038176037?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-22
Database: The Wall Street Journal
Tesla Takes Step Toward Opening Factory in Shanghai; Documents describe Tesla as sole owner of new company--a distinction that suggests that it plans to operate independently in China
Author: Moss, Trefor
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. has moved closer to setting up its first overseas car plant
by registering a company in Shanghai.
In a filing disclosed by China's official business database Monday, Tesla's Hong Kong division is identified as the sole owner of the new company--a crucial distinction that suggests that the electric-car maker plans to operate independently in China, without a joint-venture partner.
The filing said a new company called Tesla Shanghai Co. Ltd. was established in the Pudong New District of Shanghai on May 10. The filing said the company would be capitalized at 100 million yuan ($15.8 million).
Palo Alto-based Tesla and the Shanghai municipal government didn't immediately respond to requests for comment. In an earnings call with analysts May 2, Tesla chief executive Elon Musk said the company was close to announcing Shanghai factory plans.
Foreign auto makers build cars in China with domestic joint venture partners to avoid 25% tariffs on imported cars. But Tesla had been reluctant to take on a Chinese partner and jeopardize its proprietary technology.
The Wall Street Journal reported last year that Tesla had reached an agreement to establish a plant in Shanghai
, with the company saying it would formally announce a deal by the end of last year.
But regulatory uncertainty appeared to hold up the agreement, with the Chinese authorities slow to confirm draft proposals allowing foreign car makers to operate wholly owned factories in Shanghai and other free trade zones.
Since then, China has come under increasing pressure from the U.S. to ease joint-venture requirements. An investigation by U.S. Trade Representative Robert Lighthizer concluded in March that China's auto sector disadvantages foreign participants.
In response to U.S. pressure, Chinese President Xi Jinping pledged last month to lift joint-venture restrictions and slash import tariffs
.
The lifting of the joint-venture rules opens the door to Tesla to open its own plant, though setting up a local supply chain without a Chinese partner could present challenges. Auto analysts say the factory will take roughly three years to build and commence production.
China is already a lucrative niche market for Tesla, which sells imported cars in affluent cities such as Beijing and Shanghai. But with the Chinese government heavily promoting electric vehicles, and targeting around seven million EV sales by 2025, local production could unlock much higher-volume sales for the Californian firm.
Yang Jie contributed to this article.
Write to Trefor Moss at Trefor.Moss@wsj.com
Credit: By Trefor Moss
Subject: Automobile industry; Factories; Tariffs; Automobile production
Location: China
People: Lighthizer, Robert Musk, Elon Xi Jinping
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New Yor k, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 14, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2038233378
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2038233378?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of c opyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-24
Database: The Wall Street Journal
Tesla Considered Adding Eye Tracking and Steering-Wheel Sensors to Autopilot System; Executives rejected adding more tech warnings to inattentive drivers, due to concerns over effectiveness and costs
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Long before the fatal crash of a Tesla car in March
, some developers of the vehicle's Autopilot system expressed concern there weren't enough safeguards to ensure drivers remained attentive, people familiar with the discussions said.
Tesla Inc.'s engineers repeatedly discussed adding sensors that would ensure drivers look at the road or keep their hands on the wheel both before and after the driver-assistance system was introduced in 2015, these people said.
Tesla executives including Chief Executive Elon Musk rejected the ideas because of costs and concerns that the technology was ineffective or would annoy drivers with overly sensitive sensors that would beep too often, the people said.
"Everyone at Tesla is not only encouraged, but expected, to provide criticism and feedback to ensure that we're creating the best, safest cars on the road," a Tesla spokesman said in a statement. "This is especially true on the Autopilot team, where we make decisions based on what will improve safety and provide the best customer experience, not for any other reason."
After this article was published Monday, Mr. Musk wrote on Twitter that the company rejected technology that would track drivers' eyes because it was ineffective, not because of the cost.
Generations of auto makers have balanced adding new safety features, such as antilock brakes and backup cameras, with associated costs. Automated driving technology is developing rapidly, and auto makers are rolling it out at varying paces.
Automotive specialists and federal safety investigators have previously questioned whether Tesla has done enough to ensure safety with Autopilot
, a hallmark of Tesla's electric vehicles. Autopilot uses cameras, sensors and radar to control vehicle speed and steering under certain conditions, but doesn't take over full control of driving. Tesla's position
is that cars with the Autopilot system are safer than cars without it.
The March 23 crash of a Tesla Model X sport-utility vehicle occurred south of San Francisco while Autopilot was activated, killing the driver. The crash is under investigation by U.S. transportation-safety agencies. Tesla said the driver received several system warnings
to put his hands on the wheel and had at least five seconds to do so before the car slammed into a highway divider.
The company's owners manuals emphasize that Autopilot has limitations, such as an inability to spot standing objects. Drivers must acknowledge on the car's touch screen that it is their responsibility to stay alert and maintain control. Visual and audio warnings remind them to stay engaged.
Some self-driving car experts say partly autonomous driving systems like Autopilot give drivers a false sense of confidence that they can turn their attention elsewhere.
Mr. Musk alluded to the complacency issue in a May 2 call with analysts, while repeating Tesla's view that Autopilot makes its cars safer than conventional automobiles. "When there is a serious accident, it is almost always, in fact, maybe always the case, that it is an experienced user," Mr. Musk said. "And the issue is...more one of complacency, like we get too used to it."
Such concerns have persisted within Tesla, people familiar with the Autopilot effort said, and intensified in 2016, after 40-year-old Joshua Brown died in Florida when his Model S sedan, with Autopilot activated
, struck a semitrailer truck that was crossing a divided highway.
Tesla, worried that Autopilot gave drivers a false sense of security, brought in suppliers to discuss ways to ensure drivers pay attention, some of the people said.
One idea was sensors to track drivers' eyes to ensure they watch the road. Tesla executives questioned the costs of such a system, which typically includes a camera and infrared sensor, and whether it would be ready for deployment, these people said. Another concern was whether the sensors could reliably detect drivers of varying heights.
Another measure the Autopilot team considered was incorporating sensors into the steering wheel to monitor whether drivers' hands were touching it at all times, these people said.
Autopilot already has a sensor to capture small movements of the steering wheel to gauge whether drivers are holding it. But drivers can quickly touch the wheel to stop the dashboard warnings for a few minutes.
"It came down to cost, and Elon was confident we wouldn't need it," one of those people said. Executives conveyed there was pressure for each vehicle to reach a certain profit margin, according to the people familiar with the matter.
Tesla in 2016 was gearing up to launch the Model 3 with a starting price of $35,000, much lower than previous Tesla vehicles. Tesla has targeted a 25% gross margin for when it began production and aims to improve it over time.
"We've explored many technologies and opted for the combination of a hands-on-wheel torsion sensor with visual and audio alerts, and we will of course continue to evaluate new technologies as we evolve the Tesla fleet over time," the Tesla spokesman said Thursday.
Mr. Musk has argued Tesla shouldn't delay deployment of Autopilot given its potential to save lives. In July 2016, about two months after Mr. Brown's crash, Mr. Musk wrote it would be "morally reprehensible" to move slowly because of media scrutiny or legal liability.
In September 2016, Tesla wirelessly updated the Autopilot software in its cars. Among other improvements, it implemented a protocol that disables the system after warning a driver three times over several minutes without result.
Federal safety investigators in 2017 found that Mr. Brown put his hands on the wheel for a total of 25 seconds during the 37 minutes Autopilot was on, and received 13 warnings to keep his hands on the wheel. Autopilot never deactivated.
The National Transportation Safety Board said Autopilot lacked "an effective method of ensuring driver engagement" by allowing drivers to ignore warnings and keep their hands off the wheel for up to five minutes at a time. It also said Tesla's steering-sensor system doesn't ensure a driver is watching the road.
"Autopilot as implemented now allows too much leeway," enabling drivers to keep their hands off the wheel for as long as two minutes before being warned, said Phil Magney, founder of automotive consultancy VSI Labs.
General Motors Co., concerned that drivers would misuse its Super Cruise semiautonomous system, had delayed rolling it out for about a year, until it made its debut in the 2018 Cadillac CT6 sedan, people familiar with the effort said. That system includes eye-tracking technology.
Volkswagen AG's Audi has said it delayed bringing out a hands-free system that relies on eye-tracking technology
as it awaits regulations in the U.S. and Germany to remove risk associated with its use.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Musk Says Tesla Is 'Flattening Management Structure'
* Tesla Without Two Key Executives
* Papers Filed for Tesla Factory in Shanghai
* U.S. Safety Investigators Examine Another Fatal Tesla Crash
(May 9, 2018)
* Tesla, Uber Deaths Raise Questions About the Perils of Partly Autonomous Driving
(April 2, 2018)
* NTSB 'Unhappy' With Tesla Over Crash Disclosures
(April 1, 2018)
* Self-Driving Dilemma: How to Pass the Wheel Between Human and Robot
(Oct. 1, 2017)
Credit: By Tim Higgins
Subject: Automobile industry; Investigations; Sensors; Roads & highways; Costs; Vehicles; Autonomous vehicles; Automobile driving
Location: United States--US Germany Florida San Francisco California
People: Musk, Elon
Company / organization: Name: National Transportation Safety Board; NAICS: 926120; Name: Volkswagen AG; NAICS: 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 14, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2038286582
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2038286582?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-23
Database: The Wall Street Journal
Tesla CEO Musk Says Company Is 'Flattening Management Structure' in Reorganization; Move follows engineering chief taking a leave of absence and the departure of another senior executive
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. will restructure and flatten its management, Chief Executive Elon Musk told employees Monday, as the Silicon Valley auto maker struggles to boost production of its Model 3 sedan amid an exodus of top leaders
Mr. Musk made the announcement following news that his engineering chief, Doug Field, was taking a leave of absence
, and that senior executive Matthew Schwall was leaving the company
for Alphabet Inc.'s driverless car division Waymo.
"To ensure that Tesla is well prepared for the future, we have been undertaking a thorough reorganization of our company," Mr. Musk said in the memo reviewed by The Wall Street Journal. "As part of the reorg, we are flattening the management structure to improve communication, combining functions where sensible and trimming activities that are not vital to the success of our mission."
He added that the company will continue to hire workers. In early May, Mr. Musk alluded to a reorganization when he discussed cutting down on the number of contract workers.
Under a flat management structure, employees work for top leaders with few layers of managers in between. But at Tesla, Mr. Musk is already in the trenches, sleeping on the factory floor as he tries to increase production of the Model 3, which began assembly last July and is months behind in reaching milestones.
Mr. Musk already has taken command of several significant roles. In February, the CEO announced the company's sales and service divisions would report directly to him following the departure of Jon McNeill, Tesla's president of global sales, marketing and delivery and service. He left to become chief operating officer at ride-hailing service Lyft Inc.
In April, Mr. Musk said he would take control of vehicle production from Mr. Fields, who was given those duties a year earlier on top of his engineering oversight.
Mr. Musk didn't mention any names in the memo Monday or provide more details about any changing positions.
The management moves come at a critical juncture for Tesla as it tries to produce enough of its mass-market Model 3 sedans to generate cash to fund the business and instill confidence in investors that the company can move beyond being a niche-product maker.
The company is under pressure to meet a twice-delayed goal of building 5,000 Model 3s a week by around the end of June. Analysts say Tesla can start generating cash once it meets that milestone. Mr. Musk has said he expects the company to be profitable in the third quarter.
Excitement about Tesla's ability to bring electric vehicles to the masses and then to develop autonomous vehicle technology helped push the company's stock to record levels last year and give it a market value that rivals that of General Motors Co.
Tesla's stock is down more than 5% so far this year. The shares were recently trading up about 0.6% at $302.83 in morning trading.
Mr. Field, a leader at the auto maker since joining in 2013 from Apple Inc., oversees the engineering of Tesla's vehicles.
Mr. Schwall was the company's main technical contact with U.S. safety investigators as the Silicon Valley auto maker races to develop driverless-car technology
. His departure comes as the National Transportation Safety Board has been investigating multiple crashes.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Chief executive officers; Leaves of absence; Corporate reorganization
Location: Silicon Valley-California United States--US
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 14, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2038292213
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2038292213?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is proh ibited without permission.
Last updated: 2018-05-23
Database: The Wall Street Journal
Tesla Team Weighed Autopilot Safeguards
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 May 2018: B.1.
ProQuest document link
Abstract: None available.
Full text: Long before the fatal crash of a Tesla car in March, some developers of the vehicle's Autopilot system expressed concern there weren't enough safeguards to ensure drivers remained attentive, people familiar with the discussions said.
Tesla Inc.'s engineers repeatedly discussed adding sensors that would ensure drivers look at the road or keep their hands on the wheel both before and after the driver-assistance system was introduced in 2015, these people said.
Tesla executives including Chief Executive Elon Musk rejected the ideas because of costs and concerns that the technology was ineffective or would annoy drivers with overly sensitive sensors that would beep too often, the people said.
"Everyone at Tesla is not only encouraged, but expected, to provide criticism and feedback to ensure that we're creating the best, safest cars on the road," a Tesla spokesman said in a statement. "This is especially true on the Autopilot team, where we make decisions based on what will improve safety and provide the best customer experience, not for any other reason."
After this article was published online Monday, Mr. Musk wrote on Twitter that the company rejected technology that would track drivers' eyes because it was ineffective, not because of the cost.
Generations of auto makers have balanced adding new safety features, such as anti-lock brakes and backup cameras, with associated costs. Automated-driving technology is developing rapidly, and auto makers are rolling it out at varying paces.
Automotive specialists and federal safety investigators have previously questioned whether Tesla has done enough to ensure safety with Autopilot, a hallmark of Tesla's electric vehicles. Autopilot uses cameras, sensors and radar to control vehicle speed and steering under certain conditions, but doesn't take over full control of driving. Tesla's position is that cars with the Autopilot system are safer than cars without it.
The March 23 crash of a Tesla Model X sport-utility vehicle occurred south of San Francisco while Autopilot was activated, killing the driver. The crash is under investigation by U.S. transportation-safety agencies. Tesla said the driver received several system warnings to put his hands on the wheel and had at least five seconds to do so before the car slammed into a highway divider.
The company's owners manuals emphasize that Autopilot has limitations, such as an inability to spot standing objects. Drivers must acknowledge on the car's touch screen that it is their responsibility to stay alert and maintain control. Visual and audio warnings remind them to stay engaged.
Some self-driving car experts say partly autonomous driving systems like Autopilot give drivers a false sense of confidence that they can turn their attention elsewhere.
Mr. Musk alluded to the complacency issue in a May 2 call with analysts, while repeating Tesla's view that Autopilot makes its cars safer than conventional automobiles. "When there is a serious accident, it is almost always, in fact, maybe always the case, that it is an experienced user," Mr. Musk said. "And the issue is . . . more one of complacency, like we get too used to it."
Such concerns have persisted within Tesla, people familiar with the Autopilot effort said, and intensified in 2016, after 40-year-old Joshua Brown died in Florida when his Model S sedan, with Autopilot activated, struck a semitrailer truck that was crossing a divided highway.
Tesla, worried that Autopilot gave drivers a false sense of security, brought in suppliers to discuss ways to ensure drivers pay attention, some of the people said.
One idea was sensors to track drivers' eyes to ensure they watch the road. Tesla executives questioned the costs of such a system, which typically includes a camera and infrared sensor, and whether it would be ready for deployment, these people said. Another concern was whether the sensors could reliably detect drivers of varying heights.
Another measure the Autopilot team considered was incorporating sensors into the steering wheel to monitor whether drivers' hands were touching it at all times, these people said.
Autopilot already has a sensor to capture small movements of the steering wheel to gauge whether drivers are holding it. But drivers can quickly touch the wheel to stop the dashboard warnings for a few minutes.
"It came down to cost, and Elon was confident we wouldn't need it," one of those people said. Executives conveyed there was pressure for each vehicle to reach a certain profit margin, according to the people familiar with the matter.
Tesla in 2016 was gearing up to launch the Model 3 with a starting price of $35,000, much lower than previous Tesla vehicles. Tesla has targeted a 25% gross margin for when it began production, and aims to improve it over time.
"We've explored many technologies and opted for the combination of a hands-on-wheel torsion sensor with visual and audio alerts, and we will of course continue to evaluate new technologies as we evolve the Tesla fleet over time," the Tesla spokesman said Thursday.
Mr. Musk has argued Tesla shouldn't delay deployment of Autopilot given its potential to save lives. In July 2016, about two months after Mr. Brown's crash, Mr. Musk wrote it would be "morally reprehensible" to move slowly because of media scrutiny or legal liability.
In September 2016, Tesla wirelessly updated the Autopilot software in its cars. Among other improvements, it implemented a protocol that disables the system after warning a driver three times over several minutes without result.
Federal safety investigators in 2017 found that Mr. Brown put his hands on the wheel for a total of 25 seconds during the 37 minutes Autopilot was on, and received 13 warnings to keep his hands on the wheel. Autopilot never deactivated.
The National Transportation Safety Board said Autopilot lacked "an effective method of ensuring driver engagement" by allowing drivers to ignore warnings and keep their hands off the wheel for up to five minutes at a time. It also said Tesla's steering-sensor system doesn't ensure a driver is watching the road.
---
Tesla to 'Flatten'
Manager Structure
Tesla Inc. will restructure and flatten its management, Chief Executive Elon Musk told employees Monday, as the Silicon Valley auto maker struggles to boost production of its Model 3 sedan amid an exodus of top leaders
Mr. Musk made the announcement following news that his engineering chief, Doug Field, was taking a leave of absence, and that senior executive Matthew Schwall was leaving the company for Alphabet Inc.'s driverless-car division Waymo.
"To ensure that Tesla is well prepared for the future, we have been undertaking a thorough reorganization of our company," Mr. Musk said in the memo reviewed by The Wall Street Journal. "As part of the reorg, we are flattening the management structure to improve communication, combining functions where sensible and trimming activities that are not vital to the success of our mission."
He added that the company will continue to hire workers. In early May, Mr. Musk alluded to a reorganization when he discussed cutting down on the number of contract workers.
Under a flat management structure, employees work for top leaders with few layers of managers in between. But at Tesla, Mr. Musk is already in the trenches, sleeping on the factory floor as he tries to increase production of the Model 3, which began assembly last July and is months behind in reaching milestones.
Mr. Musk already has taken command of several significant roles.
In February, the CEO announced the company's sales and service divisions would report directly to him following the departure of Jon McNeill, Tesla's president of global sales, marketing and delivery and service. He left to become chief operating officer at ride-hailing service Lyft Inc.
Credit: By Tim Higgins
Subject: Automobile industry; Investigations; Sensors; Roads & highways; Costs; Executives; Vehicles
Location: Silicon Valley-California United States--US Florida San Francisco California
People: Musk, Elon
Company / organization: Name: Alphabet Inc; NAICS: 551114; Name: Twitter Inc; NAICS: 519130; Name: National Transportation Safety Board; NAICS: 926120; Name: Lyft Inc; NAICS: 518210; Name : Wall Street Journal; NAICS: 511110; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2018
Publication date: May 15, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2038579104
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2038579104?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-15
Database: The Wall Street Journal
U.S. Auto Regulator Opens Tesla Crash Probe in Utah With Driver Claiming Autopilot Use; Marks the third, active U.S. safety investigation involving a crash where car maker's driver-assistance system was said to be in use
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: U.S. safety investigators on Wednesday opened the third active investigation of a Tesla Inc. vehicle that crashed while the driver-assistance system Autopilot was said to be in use.
The National Highway Traffic Safety Administration said it will investigate a crash that occurred last Friday in South Jordan, Utah, where a Model S sedan driving about 60 miles an hour rammed into the back of a fire department truck stopped at a red light. The 28-year-old driver, who sustained a broken ankle, said Autopilot was engaged and that she was looking at her phone before the collision, according to local police.
NHTSA said its special crash investigations team will gather information on the collision and take appropriate action depending on its review. This team generally tries to improve advanced safety systems within the auto industry, according to the agency's website. NHTSA oversees vehicle makers and routinely investigates auto crashes, helping to enforce auto safety standards and regulations.
"When using Autopilot, drivers are continuously reminded of their responsibility to keep their hands on the wheel and maintain control of the vehicle at all times," a Tesla spokeswoman said in a statement. "Tesla has always been clear that Autopilot doesn't make the car impervious to all accidents."
On Monday, Tesla Chief Executive Elon Musk criticized the media in a Twitter post
for its coverage of the Utah accident. "It's super messed up that a Tesla crash resulting in a broken ankle is front page news and the ~40,000 people who died in US auto accidents alone in past year get almost no coverage," Mr. Musk wrote.
A fatal crash in March involving a Model X sport-utility vehicle renewed scrutiny of Autopilot, which uses cameras, sensors and radar to control vehicle speed and steering under certain conditions, but doesn't take over full driving control.
In that March 23 crash
, under federal investigation, the car slammed into a highway barrier south of San Francisco, killing the driver. Tesla said Autopilot was activated but that the driver received several system warnings
to put his hands on the wheel and had at least five seconds to do so before the collision.
U.S. investigators also are looking into an incident in January in Los Angeles where a Model S rammed into the back of a stopped firetruck on the freeway. The driver told the fire department the car was using Autopilot at the time.
Tesla contends Autopilot makes its cars safer than conventional automobiles and emphasizes that it is the driver's responsibility to stay alert and maintain control of the vehicle while Autopilot is on. Automotive specialists say drivers can have a hard time paying attention while using partly autonomous driving systems like Autopilot.
The Wall Street Journal reported on Monday that Tesla has long considered adding sensors
that would ensure drivers look at the road or keep their hands on the wheel, but executives rejected the ideas because of costs and concerns the technology was ineffective. Mr. Musk said this week that Tesla rejected adding sensors to track a driver's eyes because it was ineffective, not because of the cost.
U.S. safety regulators have said they also are reviewing battery fires stemming from Tesla crashes, including one earlier this month
involving a Model S that killed two teenagers in Fort Lauderdale, Fla.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Location: Los Angeles California United States--US San Francisco California Utah
People: Musk, Elon
Company / organization: Name: National Highway Traffic Safety Administration--NHTSA; NAICS: 926120; Name: Twitter Inc; NAICS: 519130; Name: Wall Street Journal; NAICS: 511110; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 16, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2039554254
Document URL: https://login.ezproxy.uta.e du/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2039554254?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-17
Database: The Wall Street Journal
What Do Tesla, Apple and SoftBank Have in Common? They're All Hot for Lithium; Tech companies, car makers rush to secure future supplies of key battery components
Author: Ramkumar, Amrith
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. and a large Chinese firm each struck deals with lithium producers, the latest sign that big users are rushing to secure supplies of the material used in electric-car and cellphone batteries.
Both lithium and cobalt, which is also used in these batteries
, face potential shortages in the years ahead as electric-vehicle use increases.
That concern is driving a number of companies like technology firms and car makers reliant on lithium and cobalt to strike deals now, even if it means joining with suppliers that haven't started producing yet.
Tesla reached a three-year supply agreement with lithium firm Kidman Resources Ltd., which begins when the Australian company begins producing battery-grade material, Kidman said Thursday. The firm isn't expected to begin producing lithium compounds before 2021.
Chinese firm Tianqi Lithium Corp. also said Thursday that it has agreed to buy a 24% stake
in Chilean lithium company Sociedad Quimica y Minera de Chile SA from Canadian fertilizer firm Nutrien Ltd. for about $4.1 billion.
In addition to the sector's dominant players such as Glencore PLC and Albemarle Corp., analysts estimate there are more than 100 smaller lithium miners and about 25 cobalt firms. Many are publicly traded in Canada and Australia, and some have already clinched deals with big users. "It just looks like we're on the precipice of this wave," said Chris Berry, founder of House Mountain Partners LLC, a New York-based adviser to battery-metals companies and investors. "You're going to need a lot of investment in a hurry to meet demand."
Japan's SoftBank Group Corp. last month paid nearly $80 million for a roughly 10% stake in Nemaska Lithium Inc., a Quebec-based producer. It marked SoftBank's first investment in a lithium company
. Nemaska has produced just small samples of lithium compounds at this point, and its mine and plant are expected to be fully operational in the second half of 2019.
The trading arm of Toyota Group, the parent company of Toyota Motor Corp., also said in January that it was taking a 15% stake in Australian lithium firm Orocobre Ltd. for roughly $225 million.
Chemical company FMC Corp. is expected to spin off its lithium business this year, and multiple Chinese lithium companies are also expected to go public, analysts said. Apple Inc., BMW AG and Volkswagen AG have been working to secure future cobalt supplies.
But the rush to lock in deals
could turn out to be a speculative bust. Prices of lithium and cobalt more than doubled from 2016 through last year, but the rally has cooled off recently amid worries about oversupply. Some investors also think manufacturers will replace pricey materials like lithium and cobalt using different types of batteries with a higher concentration of cheaper metals such as nickel.
Shares of lithium and cobalt producers have slipped, too, following recent declines in the commodities. Nemaska's stock price has fallen 3.1% on the Toronto Stock Exchange over the past month.
The number of companies producing lithium and cobalt has also soared from early 2014, when Tesla CEO Elon Musk announced plans for a big electric-car battery plant.
Back then, there were about 16 lithium exploration firms and a handful of cobalt ones, Mr. Berry said.
Because most investors looking for exposure to cobalt and lithium take positions in mining companies, analysts said the recent share-price declines reflect uncertainty about which ones will end up on top and the risk still involved in the fledgling market.
Analysts expect demand for the materials used to power electric vehicles and smartphones to more than double by 2025, pushing transportation and technology companies into exploring unconventional deals to meet that pressing need.
Many lithium and cobalt mines are located in regions that have historically been unstable: Congo in the case of cobalt, and South America for lithium, adding to worries about a supply shortage.
In a sign of how isolated some of these companies are, when SoftBank reached out to Nemaska last October, Chief Executive Guy Bourassa hadn't even heard of the Tokyo-based company, one of the world's largest technology investors.
"I had absolutely no clue what SoftBank was," Mr. Bourassa said in an interview.
SoftBank had specifically sought out Nemaska, because the producer uses a patented extraction technology that reduces costs, said Mr. Bourassa. And a deal was done in six months.
SoftBank didn't respond to a request for comment.
Mr. Bourassa said the government of Quebec and the firm's shareholders will provide the rest of the funding that will let Nemaska develop its mine and a commercial plant to process lithium and turn it into lithium hydroxide and carbonate, two of the chemicals used in batteries.
Companies like SoftBank investing directly into mining and chemicals companies marks a shift from the past. Firms have typically only worked with Chinese battery makers that obtained raw materials themselves
, analysts said.
"It's certainly an indication the metals are becoming more mainstream," said Jon Hykawy, president of Stormcrow Capital Ltd., a consulting firm that helped negotiate a deal between Nemaska and the $4.5 billion private-equity firm Orion Resource Partners, which focuses on mining.
"They're being incorporated as part of this broader technology story," he said.
Write to Amrith Ramkumar at amrith.ramkumar@wsj.com
Related
* Tianqi Lithium to Buy Stake in Miner SQM for $4 Billion
* Analysis: China Won't Dominate Lithium Forever
Credit: By Amrith Ramkumar
Subject: Automobile industry; Investments; Supplies; Mining; Lithium
Location: New York Canada Quebec Canada South America Australia Japan
People: Musk, Elon
Company / organization: Name: Orocobre Ltd; NAICS: 212391; Name: Nemaska Lithium Inc; NAICS: 212393; Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110; Name: Albemarle Corp; NAICS: 325180, 325199, 325412; Name: FMC Corp; NAICS: 325211, 333120, 333922; Name: Volkswagen AG; NAICS: 336111, 336390; Name: Toronto Stock Exchange; NAICS: 523210; Name: Tesla Inc; NAICS: 336999; Name: Glencore PLC; NAICS: 211111, 212210, 212234, 311314; Name: Apple Inc; NAICS: 334111, 334220, 511210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 17, 2018
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2039811653
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2039811653?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-18
Database: The Wall Street Journal
There's a War on Middle Management and Tesla Just Joined It; Elon Musk embraces flatness, but it may be time to cut 'sandwich' bosses some slack
Author: Walker, Sam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: One of the decade's most influential management cults picked up a prominent new disciple this week--Tesla's Elon Musk. In a memo announcing a major reorganization
, the 46-year-old chief executive revealed that the electric-car maker's plans include "flattening the management structure."
The rationale, he wrote, is "to improve communication."
Many Silicon Valley CEOs, especially "founder" types, love the notion of liberating workers from the overfed company org charts. "Flatness" is an easy sell to millennial employees
, who sometimes bristle inside conventional hierarchies. Tech companies such as Tesla, which are constantly fighting to retain prized engineers, believe it's important to reward them with a direct line to the top.
In theory, it's basically a scaled-up version of how startups work. By thinning out management layers, the thinking goes, you accelerate the feedback loop between your generals and field commanders, allowing brilliant ideas to germinate quickly. That's how you stay nimble, right?
The cult of flatness has spread far beyond tech. Hundreds of businesses in legacy industries have ripped down office walls in favor of open plans and unassigned seating
--enjoy your new communal worktable! The proliferation of internal social platforms, shared office calendars and companywide Slack channels only flatten organizations further by forcing everyone--no matter how senior--to participate in an endless transparency exercise.
The chief consequence for top executives is, not surprisingly, more communication. Most studies conclude senior managers devote at least 80% of their workdays to communication in all its forms and are hurtling toward 90%. The time managers and employees spend in "collaborative activities
" has grown by at least 50% in the last two decades, according to data collected by the researchers Rob Cross, Reb Rebele and Adam Grant.
One common side effect of flatness is "interaction fatigue." I recently spoke to the CEO of a 3,000-employee technology company who described how an entry-level hire pinged him on Slack to ask him what school he sends his children to.
For Tesla, a competitor in the fast-paced, shape-shifting field of autonomous vehicles, extra layers of management might truly hurt more than they help. Also possible: The company's organizational epiphany has less to do with careful introspection than an avalanche of safety challenges that has already eroded its executive ranks and an intensifying battle to keep star managers
from leaving.
Flattening maneuvers often end up pushing middle managers out the door, of course--but they sometimes present a rare opportunity for advancement. A pancaked structure, even at Tesla, will surely nudge some midlevel bosses into better jobs.
Some established businesses simply have too many bosses. After outside consultants discovered that Tata Motors had more than a dozen different levels of management, the India-based car maker, whose stock price has fallen 29% so far this year despite strong domestic sales growth, decided last year to thin the herd to just five or six management levels.
The nagging question is whether these "sandwich" managers offer any long-term benefits we've failed to recognize.
In a 2012 study of videogame makers, Ethan Mollick of the Wharton School collected the names and job titles of everyone listed on the credits for 854 games to see which employees were most crucial to their success, as measured by revenue.
In an industry that prizes dazzling content, one would assume the "creatives" who design games have more impact than project managers who oversee mundane details such as troubleshooting, budgets and deadlines.
In fact, the opposite was true. Designers accounted for 7% of the variation in revenue between games, while project managers accounted for 22%. "The often overlooked and sometimes-maligned middle managers matter," Mr. Mollick said. "They are not interchangeable parts."
The best defense I've found for the value of middle managers dates to 2003, when Thomas DeLong and Vineeta Vijayaraghavan argued in a Harvard Business Review article
that companies were too focused on attracting top talent. While "A" players could have huge impacts, they wrote, the long-term performance of companies "depends far more on the unsung commitment and contributions of their 'B' players."
B players don't call attention to themselves. They're usually not stars or "executive" material so they rarely change jobs. Unlike A players, who tend to upend the status quo as they pursue personal advancement, many B players are competent and steady performers--"functional experts" with deep knowledge of how the organization works. They're more likely to push back against new initiatives they find problematic.
Here's the problem with borrowing a management model from highflying tech companies: Many of them have known nothing but wild growth. In that mode, limited middle management has benefits. But what happens when these businesses face their first serious headwinds?
We've seen how many founder-CEOs react to their first taste of crisis. They often begin to overfunction, blasting out hasty remedies that may or may not work. The A players, meanwhile, often respond to hardship by updating their résumés. Without alphas to lean on, holding things together falls to the betas, those middle managers we're so eager to exterminate.
As longtime intermediaries between management and star talent, strong middle managers know how to selectively adopt the wishes of one side or the other and squeeze the brakes on bad ideas. In an emergency, sometimes a little informed dissent is exactly what you need.
Instead of stigmatizing middle managers as dinosaurs that propagate mediocrity and hinder innovation, we ought to be trying to hire better ones or at least considering the pitfalls of life without them. What if the leaders who elevate us during the ups aren't the right people to pull us through the downs?
It's worth discussing. Shall we open a Slack channel?
Write to Sam Walker at sam.walker@wsj.com
Credit: By Sam Walker
Subject: Communication; Employees; Employment; Executives
Location: Silicon Valley-California India
People: Musk, Elon
Company / organization: Name: Harvard Business Review; NAICS: 511120; Name: Tata Motors Ltd; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 18, 2018
Section: Management
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2040742750
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2040742750?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-18
Database: The Wall Street Journal
Is Tesla Abandoning the Mass Market? Elon Musk's about-face on Model 3 pricing is a warning sign for the stock
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla has given the first signals that it is giving up on its ambition to become a mass-market car maker. Prospective customers should be angry, and investors ought to be wary.
Over the weekend, Chief Executive Elon Musk announced a new, $78,000 version of Tesla's car for the people, the Model 3. More important was his admission that his promised $35,000 version would cause the company to "lose money and die" if built right away.
Tesla has struggled to produce a $50,000 version of the Model 3
, and as the company burns through cash, the question is how many of those will be available once the faster $78,000 offering is ready. If Model 3 is suddenly a high-end car, then Tesla, whose other offerings start around that price, would be more comparable to Maserati than to Chevy, which is producing a $36,620 electric car.
The problem is investors have given Tesla a near $50 billion market cap in the belief the company will upend the global auto industry, not become a niche, high-end electric car maker. What that latter company is worth is hard to say, but it is not the current market valuation.
Then there are the nearly 500,000 Tesla die-hards who put down $1,000 deposits for what they thought was a car that started at $35,000. How many can afford, or would be willing to pay for the higher-end models? These refundable deposits account for a third of the cash on Tesla's rickety balance sheet
.
Mr. Musk said Tesla would produce a low-end Model 3 toward the end of the year, though Tesla's forecasts are typically optimistic
.
Granted, Tesla would hardly be the first auto company to promise a cheap base model with limited availability. And there are sound business reasons to hold off on production. Tesla burned more than $1 billion in cash last quarter, and the $35,000 Model 3 would be unsustainable to produce, Mr. Musk said.
If Tesla gives up on the mass-market, the company will produce a lot fewer cars than investors expect and its valuation should be questioned. Tesla's market value is about $450,000 per car sold last year; that is more than 16 times the value assigned to peers like BMW AG.
Would a shift by Tesla make potential customers ask for their money back? The company hasn't said how many depositors were only interested in buying the cheapest version of the car. Watching those numbers will be hard, too. It can take several months for customers to get refunds processed, so a refund request issued today might not show up in financial statements until November, when Tesla reports third-quarter results.
Giving up on the mass market may be the right decision for Tesla, but not for shareholders.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Automobile industry; Investments
People: Musk, Elon
Company / organization: Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Maserati; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 21, 2018
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2041729866
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2041729866?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-22
Database: The Wall Street Journal
Tesla's Shift Away From Mass Market Puts Value at Risk
Author: Grant, Charley
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]22 May 2018: B.12.
ProQuest document link
Abstract: None available.
Full text: [Financial Analysis and Commentary]
Tesla has given the first signals that it is giving up on its ambition to become a mass-market car maker. Prospective customers should be angry, and investors ought to be wary.
Over the weekend, Chief Executive Elon Musk announced a new $78,000 version of Tesla's car for the people, the Model 3. More important was his admission that his promised $35,000 version would cause the company to "lose money and die" if built right away.
Tesla has struggled to produce a $50,000 version of the Model 3, and as the company burns through cash, the question is how many of those will be available once the faster $78,000 offering is ready. If the Model 3 is suddenly a high-end car, then Tesla, whose other offerings start around that price, would be more comparable to Maserati than to Chevrolet, which is producing a $36,620 electric car.
The problem is investors have given Tesla a nearly $50 billion market cap in the belief the company will upend the global auto industry, not become a niche, high-end electric-car maker. What that latter company is worth is hard to say, but it isn't the current market valuation.
Then there are the nearly 500,000 Tesla die-hards who put down $1,000 deposits for what they thought was a car that started at $35,000. How many can afford, or would be willing to pay for the higher-end models? These refundable deposits account for one-third of the cash on Tesla's rickety balance sheet.
Granted, Tesla would hardly be the first auto company to promise a cheap base model with limited availability. And there are sound business reasons to hold off on production. Tesla burned more than $1 billion in cash in the latest quarter, and the $35,000 Model 3 would be unsustainable to produce, Mr. Musk said.
If Tesla gives up on the mass market, the company will produce a lot fewer cars than investors expect and its valuation should be questioned. Tesla's market value is about $450,000 per car sold last year; that is more than 16 times the value assigned to peers like BMW AG.
Would a shift by Tesla make potential customers ask for their money back? The company hasn't said how many depositors were only interested in buying the cheapest version of the car. It can take several months for customers to get refunds processed, so a refund request issued today might not show up in financial statements until November, when Tesla reports third-quarter results.
Giving up on the mass market may be the right decision for Tesla, but not for shareholders.
Credit: By Charley Grant
Subject: Automobile industry
People: Musk, Elon
Company / organization: Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Maserati; NAICS: 336111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.12
Publication year: 2018
Publication date: May 22, 2018
column: Heard on the Street
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2042025250
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2042025250?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-23
Database: The Wall Street Journal
Elon Musk's Latest Proposal: A Website Named 'Pravda' to Rate Media Credibility; Tesla CEO in tweetstorm lashes out against media coverage, calling it biased
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Billionaire entrepreneur Elon Musk, unhappy with media coverage of Tesla Inc., said he plans to create a Yelp.com-like site to let people rate the credibility of journalists and news organizations, and suggested he would name it after the former Soviet Union's main propaganda outlet.
The Tesla chief executive, who frequently issues provocative comments on Twitter, made the proposal in a tweetstorm against the media Wednesday, after reports in recent weeks about Tesla's struggles to increase production of its Model 3 sedan, questions about working conditions at its factories, and government investigations into the safety of its Autopilot driver-assistance system.
Mr. Musk said coverage is driven by reporters under pressure to "get max clicks" and is biased because of advertising by other auto makers and oil companies.
"The holier-than-thou hypocrisy of big media companies who lay claim to the truth, but publish only enough to sugarcoat the lie, is why the public no longer respects them," he said in a message on Twitter a little before noon in San Francisco.
"Going to create a site where the public can rate the core truth of any article & track the credibility score over time of each journalist, editor & publication," he added. "Thinking of calling it Pravda ..."
Pravda is the name of the Communist Party's official newspaper in the former Soviet Union.
Mr. Musk has a long history of posting proclamations on Twitter whose seriousness isn't necessarily self-evident. On April Fools' Day this year, he joked about Tesla going bankrupt, then clarified that he really didn't mean it. He recently vowed to start a candy company
in response to a comment about him by Warren Buffett, whose Berkshire Hathway Inc. owns See's Candies.
Previously, Mr. Musk talked about founding a company to drill tunnels to alleviate traffic congestion, which some observers at the time interpreted as a joke. He now heads a tunneling business called the Boring Co.
A Tesla spokesman didn't respond to a request for comment.
Either way, his latest idea reflects Musk's penchant for publicly battling
media outlets, analysts, and investors who raise questions about his business.
His latest comments were prompted by an analyst note on Wednesday that suggested coverage of Tesla had reached a "peak in negative coverage/sentiment" and that the company's shares should rise as Model 3 production improved. Tesla shares rose 1.5% on Wednesday, leaving them down about 10% so far this year.
Mr. Musk's proposal triggered criticism and praise, with some comparing his dislike of the media to that of President Donald Trump. Among those endorsing his tweets was President Trump's son, Donald Trump Jr., who retweeted the message: "This ... So True!!!"
One journalist retweeted Mr. Musk's comments with a link to a California filing for a business incorporated last October called Pravda Corp., involving a person connected with other Musk ventures. "Er, he's not kidding," wrote the journalist, Mark Harris
.
Mr. Musk replied with a "hugging face" emoji.
Credit: By Tim Higgins
Subject: Credibility; Social networks; Media coverage
Location: Union of Soviet Socialist Republics--USSR California San Francisco California
People: Trump, Donald J Musk, Elon Buffett, Warren
Company / organization: Name: Twitter Inc; NAICS: 519130; Name: Sees Candy Shops Inc; NAICS: 311351; Name: Yelp Inc; NAICS: 519130; Name: Boring Co; NAICS: 237990; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 23, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2042910402
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2042910402?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-24
Database: The Wall Street Journal
Musk Hits At Media For Tesla Coverage
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 May 2018: B.4.
ProQuest document link
Abstract: None available.
Full text: Billionaire entrepreneur Elon Musk, unhappy with media coverage of Tesla Inc., said he plans to create a Yelp.com-like site to let people rate the credibility of journalists and news organizations. He also suggested he would name it after the Soviet Union's main propaganda outlet.
The Tesla chief executive, who frequently issues provocative comments on Twitter, made the proposal in a tweetstorm against the media Wednesday, after reports in recent weeks about Tesla's struggles to increase production of its Model 3 sedan, questions about working conditions at its factories, and government investigations into the safety of its Autopilot driver-assistance system.
Mr. Musk said coverage is driven by reporters under pressure to "get max clicks" and is biased because of advertising by other auto makers and oil companies.
"The holier-than-thou hypocrisy of big media companies who lay claim to the truth, but publish only enough to sugarcoat the lie, is why the public no longer respects them," he said in a message on Twitter a little before noon in San Francisco.
"Going to create a site where the public can rate the core truth of any article & track the credibility score over time of each journalist, editor & publication," he added. "Thinking of calling it Pravda . . ."
Pravda is the name of the Communist Party's official newspaper in the former Soviet Union.
Mr. Musk has a long history of posting proclamations on Twitter whose seriousness isn't necessarily self-evident. On April Fools' Day this year, he joked about Tesla going bankrupt, then clarified that he really didn't mean it. He recently vowed to start a candy company in response to a comment about him by Warren Buffett, whose Berkshire Hathway Inc. owns See's Candies.
Previously, Mr. Musk talked about founding a company to drill tunnels to alleviate traffic congestion, which some observers at the time interpreted as a joke. He now heads a tunneling business called the Boring Co.
A Tesla spokesman didn't respond to a request for comment.
Either way, his latest idea reflects Musk's penchant for publicly battling media outlets, analysts, and investors who raise questions about his business.
Credit: By Tim Higgins
Subject: Social networks; Media coverage
Location: Union of Soviet Socialist Republics--USSR San Francisco California
People: Musk, Elon Buffett, Warren
Company / organization: Name: Boring Co; NAICS: 237990; Name: Twitter Inc; NAICS: 519130; Name: Sees Candy Shops Inc; NAICS: 311351; Name: Yelp Inc; NAICS: 519130; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2018
Publication date: May 24, 2018
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2043018670
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2043018670?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-25
Database: The Wall Street Journal
Consumer Reports Thought a Tesla Took Too Long to Stop. The Company Fixed It Via a Software Update. An over-the-air update cut the car's stopping distance by as much as 20 feet, a notable achievement in the auto industry
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. was able to improve the braking distance of Model 3 cars by as much as 20 feet simply by wirelessly transmitting a software update to the vehicles--a significant achievement in the auto industry that shows how the company can boost performance without costly dealership repairs.
The improvement convinced Consumer Reports
on Wednesday to recommend the Model 3 vehicle, reversing last week's decision to withhold its influential endorsement partly because it deemed the car took too long to stop. The Consumer Reports seal of approval is sought after by the auto industry.
The Silicon Valley electric-car maker's ability to change basic functions of the car through software updates via Wi-Fi or cellular signals puts it at the cutting edge of car development. Tesla has previously sent wireless updates to improve the driver's assistance system called Autopilot, or to give a car greater acceleration. This latest change comes at a crucial time when Tesla is battling criticism of its newest vehicle.
"I've been at [Consumer Reports] for 19 years and tested more than 1,000 cars and I've never seen a car that could improve its track performance with an over-the-air update," Jake Fisher, director of auto testing, said in Wednesday's review.
The automotive industry has spent generations and fortunes requiring owners to bring vehicles to their service centers to make fixes. Last week, for example, Fiat Chrysler Automobiles NV recalled more than 5 million vehicles
in the U.S. and Canada to fix a software glitch that could prevent drivers from canceling cruise control.
"Tesla has broken through a massive barrier that has haunted the auto industry since 1978," when the first microprocessor was introduced in cars, said Dave Sullivan, an analyst for AutoPacific. "The ability to program modules over the air, such as the [anti-lock braking] module, represents a huge leap in keeping customers safe and reducing the number of unrepaired vehicles on the road."
Other auto makers, including General Motors Co., are rushing to develop similar over-the-air technology.
The lack of a recommendation from Consumer Reports would have threatened Tesla Chief Executive Elon Musk's effort to bring electric cars to more mainstream customers. Tesla is struggling to ramp up production of the Model 3 while also facing questions about the safety of Autopilot after a few recent crashes involved the driver-assistance system
. Tesla says Autopilot makes its vehicles safer than those without it.
Consumer Reports' original review on May 21 raised new safety questions. The nonprofit organization said at the time that the Model 3 it purchased had a stopping distance of 152 feet from 60 miles an hour, "far worse than any contemporary car" and further than a full-size pickup.
In response, Mr. Musk promised last week on Twitter to make improvements to the brakes. On Saturday, he said, the software updates had begun rolling out, saying it should improve braking distance by about 20 feet during repeated heavy braking events. The software update changed the calibration of the anti-lock braking algorithm across variations in usage and environmental conditions, according to Tesla.
After the update, Consumer Reports said the sedan's braking improved by 19 feet, boosting its score for the Model 3 to 77 points from 72. That pushed it two points over the minimum score for vehicles in that vehicle class to be recommended, according to Consumer Reports.
It had also in its original review dinged the car for difficult-to-use controls inside the vehicle, which has been designed without most of the traditional nobs, buttons and displays found in most cars and instead those are replaced with a flat screen in the center of the cockpit dash.
On Twitter Wednesday, Mr. Musk promised another software update was coming that aimed to improve the Model 3's user interface.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Social networks; Automobile industry; Software upgrading; Vehicles
Location: Silicon Valley-California United States--US Canada
People: Musk, Elon
Company / organization: Name: Consumer Reports; NAICS: 511120; Name: Twitter Inc; NAICS: 519130; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Fiat Chrysler Automobiles NV; NAICS: 336111; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 30, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2046761137
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2046761137?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-31
Database: The Wall Street Journal
Tesla Brakes Better With Wireless Fix
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]31 May 2018: B.4.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. was able to improve the braking distance of Model 3 cars by as much as 20 feet by wirelessly transmitting a software update to the vehicles -- a significant achievement in the auto industry that shows how the company can boost performance without costly dealership repairs.
The improvement persuaded Consumer Reports on Wednesday to recommend the Model 3 vehicle, reversing last week's decision to withhold its influential endorsement partly because it deemed the car took too long to stop. The Consumer Reports seal of approval is sought after by the auto industry.
The Silicon Valley electric-car maker's ability to change basic functions of the car through software updates via Wi-Fi or cellular signals puts it at the cutting edge of car development. Tesla has previously sent wireless updates to improve the driver-assistance system called Autopilot or to give a car greater acceleration. This latest change comes at the same time Tesla is battling criticism of its newest vehicle.
"I've been at [Consumer Reports] for 19 years and tested more than 1,000 cars and I've never seen a car that could improve its track performance with an over-the-air update," Jake Fisher, director of auto testing, said in Wednesday's review.
The automotive industry has spent generations and fortunes requiring owners to bring vehicles to their service centers to make fixes. Last week, Fiat Chrysler Automobiles NV recalled over five million vehicles in the U.S. and Canada to fix a software glitch that could prevent drivers from canceling cruise control.
"Tesla has broken through a massive barrier that has haunted the auto industry since 1978" when the first microprocessor was introduced in cars, said Dave Sullivan, an analyst for AutoPacific. "The ability to program modules over the air, such as the [antilock-braking] module, represents a huge leap in keeping customers safe and reducing the number of unrepaired vehicles on the road."
Other auto makers, including General Motors Co., are rushing to develop similar over-the-air technology.
The lack of a recommendation from Consumer Reports would have threatened Tesla Chief Executive Elon Musk's effort to bring electric cars to more mainstream customers. Tesla is struggling to ramp up production of the Model 3 while also facing questions about the safety of Autopilot after a few recent crashes involved the driver-assistance system.Tesla says Autopilot makes its vehicles safer than those without it.
Consumer Reports' original review on May 21 raised new safety questions. The nonprofit organization said at the time that the Model 3 it purchased had a stopping distance of 152 feet from 60 miles an hour, "far worse than any contemporary car" and further than a full-size pickup.
In response, Mr. Musk promised last week on Twitter to make improvements to the brakes. On Saturday, he said, the software update had begun rolling out, saying it should improve braking distance by about 20 feet during repeated heavy braking events. The software update changed the calibration of the antilock-braking algorithm across variations in usage and environmental conditions, Tesla said.
Credit: By Tim Higgins
Subject: Automobile industry; Software upgrading; Vehicles
Location: Silicon Valley-California United States--US Canada
People: Musk, Elon
Company / organization: Name: Consumer Reports; NAICS: 511120; Name: Twitter Inc; NAICS: 519130; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999; Name: Fiat Chrysler Automobiles NV; NAICS: 336111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2018
Publication date: May 31, 2018
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2047013876
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2047013876?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-05-31
Database: The Wall Street Journal
Why SoftBank and GM Make an Odd but Happy Couple; Investment in GM's driverless-car unit should have investors reconsidering assumptions about Tesla and Uber
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 May 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: What if the stodgy, once-bankrupt auto maker was the disrupter all along?
SoftBank Group's tech-focused Vision Fund is betting $2.25 billion
that GM Cruise Holdings, General Motors' driverless car developer, will be that disrupter. GM will retain an 80% stake in Cruise after the capital infusion.
Coming from the world's biggest tech-investment fund, SoftBank's investment is a huge boost to GM, giving it cash and strong ammunition to fend off shareholder pressure for its risky bet on self-driving vehicles, and more immediately, electric cars. The auto maker's shares jumped 10% on Thursday morning.
The investment goes beyond money and prestige. SoftBank itself owns major stakes in Uber Technologies, China's Didi Chuxing Technology and other big ride-hailing companies. That would potentially give GM a market for its future cars.
It also is a contrarian bet--GM is trading at a single digit price-to-earnings ratio and not long ago trailed Tesla in market value.
While the Vision Fund hasn't been particularly sensitive to the prices it pays, the investment boosts the value of Cruise to $11.5 billion, less than three years after GM bought it for $1 billion.
For its part, SoftBank has invested alongside a profitable, highly efficient company. GM generated $5.2 billion in free cash
flow last year, so the newly invested capital can be credibly aimed at research and development. GM also has successfully brought to market the Bolt, an affordable long-range electric car, something that more celebrated rivals have yet to accomplish.
If, for instance, SoftBank had chosen to invest $2.25 billion in Tesla, which burned about $3.5 billion in cash last year and regularly taps the capital markets to fund basic operations, the SoftBank money would barely cover
the portion of Tesla's long-term debt due in 2018.
The future of mobility is hardly a settled matter. Investors shouldn't be too quick to count out the old guard.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Automobile industry; Electric vehicles
Location: China
Company / organization: Name: Didi Chuxing; NAICS: 518210; Name: General Motors Corp; NAICS: 333415, 336111, 336390
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: May 31, 2018
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2047355985
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2047355985?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-06-01
Database: The Wall Street Journal
Tesla Says 'Quite Likely' to Meet 5,000-a-Week Model 3 Production Goal; Elon Musk reiterates that the company won't need to raise cash
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 June 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. will "quite likely" meet its goal of making 5,000 Model 3 cars in a single week by the end of the month, Chief Executive Elon Musk told investors on Tuesday.
The Silicon Valley electric-car maker has demonstrated the ability to make 500 Model 3s a day, or 3,500 a week, already, he said. The company is pushing to meet the critical 5,000-a-week rate after twice delaying the deadline.
"This was, I have to tell you, the most excruciating, hellish several months I've maybe ever had," Mr. Musk said at Tesla's annual shareholder meeting near the company's Palo Alto, Calif., headquarters. "But I think we're getting there."
Meeting the goal
of 5,000 Model 3s a week by the end of June is crucial to generating enough cash to sustain operations without having to raise more capital. Tesla has faced increasing financial pressure after struggling to ramp production of the Model 3 that began assembly last July.
Mr. Musk repeated past statements that the company won't need to raise cash. He had been targeting 5,000 a week by around the end of June, a rate he said will allow Tesla to become profitable in the third quarter and cash-flow positive in each of the third and fourth periods.
He indicated Tesla aims to build 10,000 Model 3 cars a week next year.
The CEO said Tesla plans to reveal next March the upcoming compact sport-utility vehicle called the Model Y, while production is expected to begin in the first half of 2020. He also expects production to begin then of the company's tractor-trailer truck and new sports car, the Roadster.
Mr. Musk also signaled Tesla is close to announcing details
of a China factory for building cars and batteries, perhaps as soon as next month. Robin Ren, head of world-wide sales, said it would be located in Shanghai.
Tesla, which has talked about building a factory in Europe for years, plans to announce a location later this year, Mr. Musk said.
On Tuesday, shareholders approved re-electing Antonio Gracias, James Murdoch and Kimbal Musk, the CEO's brother.
Mr. Murdoch, CEO of 21st Century Fox Inc., is the son of Rupert Murdoch, executive chairman of Fox and News Corp, publisher of The Wall Street Journal. He also serves on the board of News Corp.
Large proxy adviser Glass-Lewis and CtW Investment Group, which represents union-sponsored pension funds, had recommended against re-approving the three directors while Institutional Shareholder Services had recommended against Mr. Gracias and Mr. Murdoch.
"Over the past year, Tesla has failed to hit critical production milestones and has consequently seen its past progress toward profitability sharply reverse," CtW said in a letter to shareholders. "But instead of recognizing the need for independent and effective board leadership, Tesla has renominated three directors who exemplify the company's failure to evolve."
Shareholders also rejected a proposal made by shareholder Jing Zhao, who held 12 shares, that would've required the role of board chair to be held by an independent director. It is currently held by Mr. Musk.
ISS and Glass-Lewis also recommended making the chairman an independent board role.
"The complexity of large-scale manufacturing and the challenges of successfully commercializing new technologies and new manufacturing and marketing techniques suggest that shareholders would be better served by having Musk focus on running the company, and allowing an independent director to run the board," ISS wrote.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Stockholders; Shareholder meetings
Location: China Silicon Valley-California Palo Alto California Europe
People: Murdoch, Rupert Musk, Elon
Company / organization: Name: CtW Investment Group; NAICS: 525110; Name: 21st Century Fox; NAICS : 515120; Name: News Corp; NAICS: 511110, 515120, 551112; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jun 6, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2050068037
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2050068037?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-06-15
Database: The Wall Street Journal
Tesla Autopilot System Warned Driver to Put Hands on Wheel, U.S. Investigators Say; The Tesla car involved in fatal March crash was speeding on a highway
Author: Higgins, Tim; Spector, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 June 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: A U.S. safety investigation into a fatal crash in March involving Tesla Inc.'s driver-assistance feature confirmed that the driver's hands weren't on the wheel in the seconds before the collision while also showing the vehicle sped up just before impact.
The preliminary report on Thursday from the National Transportation Safety Board didn't address the likely cause of the crash but shed new light on both the driver and car. A final conclusion is due out in the months ahead.
The Model X electric, sport-utility vehicle accelerated in the final seconds to about 71 miles an hour before the March 23 crash in Mountain View, Calif., according to the report. The Tesla system, called Autopilot, had alerted the driver to put his hands on the steering wheel more than 15 minutes before the collision, but apparently not in the moments before impact.
The findings come as auto makers and Silicon Valley are testing technologies that allow for varying levels of automation behind the wheel. Those include systems with driver-assist features--such as Autopilot--as well as those that enable fully self-driving vehicles. Fatal crashes have fueled concerns
about whether driverless technology is ready for the real world.
A Tesla spokeswoman pointed to a previous company blog post
about the incident that touted the safety of its vehicles. "Tesla Autopilot does not prevent all accidents--such a standard would be impossible--but it makes them much less likely to occur," the March blog said. "It unequivocally makes the world safer for the vehicle occupants, pedestrians and cyclists."
When Autopilot is activated by a driver, the system's sensors and cameras keep the vehicle in its lane and at a set speed and will adjust that speed if following a vehicle. It also can detect when a driver isn't engaged with the steering wheel.
Phil Magney, founder of consultancy VSI Labs, estimates that hands-free time without an alert can be about two minutes, which he has said is too much. "The driver misused the system because of the liberal grace period," he said.
Preliminary recorded data indicated the vehicle's traffic-aware cruise control, one of Autpilot's features, was set to 75 mph at the time of the March crash. The speed limit on the relevant area of the roadway is 65 mph, the NTSB said.
The agency's findings confirmed what Tesla had already said after the crash: The driver's hands weren't detected on the wheel six seconds before the crash.
The NTSB added new details, saying the driver's hands were detected on the wheel three times within a minute before the collision, for a total of 34 seconds.
The vehicle's Autopilot system was activated for about 19 minutes before the crash, the NTSB said. During that time, the system provided two visual and one auditory alert for the driver to put his hands back on the steering wheel, the agency said. Those occurred more than 15 minutes before the crash.
In the seconds leading up to the crash, the Model X was traveling 65 mph while following another vehicle, the agency said. The Tesla began steering left seven seconds before the crash, and after it no longer was behind the other vehicle it began accelerating three seconds before the collision to almost 71 mph, before running into a highway barrier.
"What strikes me from the NTSB preliminary report is that the car was silent--no visual or auditory alert at all--as it drove straight into the concrete median barrier," Todd Humphreys, an associate professor at the University of Texas at Austin whose research area is robot-perception systems, said in an email. "Yet the car's forward radar must surely have sensed the highly reflective crash attenuator mounted on the barrier."
The Tesla made no attempt at braking or steering away from the collision, the NTSB said.
The lack of evasive efforts suggests inattentive behavior on the part of the driver, or that perhaps he was incapacitated, said Bryan Reimer, a research scientist at the Massachusetts Institute of Technology who studies driver safety and vehicle automation. He believes semiautonomous vehicles need better tools to ensure drivers are using the systems properly.
The crash spurred an unusual feud between Tesla and the NTSB
. In a rare move, the NTSB in April said it had tossed Tesla from the investigation, asserting the Silicon Valley auto maker violated a formal agreement to be a "party" to the probe by releasing detailed information about the crash before government officials had vetted it.
Tesla argued it had dropped out of the investigation, contending that restrictions on disclosures about the crash could jeopardize public safety by preventing the timely release of information about Autopilot to consumers. The NTSB said procedures allow for immediate recommendations if emergency safety fixes are required.
The morning crash in Mountain View on Highway 101 killed the driver, 38-year-old Walter Huang. The vehicle's 400-volt lithium-ion high-voltage battery was breached in the crash, leading to a fire, investigators said. Bystanders found Mr. Huang belted in the driver's seat and removed him from the vehicle before it became engulfed in flames, they said. He died from his injuries at a local hospital.
The vehicle was eventually transported to an impound lot. Five days after the crash, the vehicle's battery reignited and firefighters extinguished the blaze, investigators said.
The lawyer of the driver's family said the NTSB report backs up their claim that the car failed to detect the barrier. "The Autopilot system should never have caused this to happen," Mark Fong, a lawyer for Minami Tamaki LLP, said in a statement.
Write to Tim Higgins at Tim.Higgins@WSJ.com and Mike Spector at mike.spector@wsj.com
Credit: By Tim Higgins and Mike Spector
Subject: Aircraft accidents & safety; Fatalities; Investigations; Automation; Traffic accidents & safety; Vehicles
Location: Silicon Valley-California Massachusetts United States--US
Company / organization: Name: Massachusetts Institute of Technology; NAICS: 611310; Name: National Transportation Safety Board; NAICS: 926120; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jun 7, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2051199185
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2051199185?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-06-08
Database: The Wall Street Journal
NTSB Sheds Light on Tesla Crash --- Report confirms driver's hands weren't on wheel before fatal impact
Author: Higgins, Tim; Spector, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 June 2018: B.1.
ProQuest document link
Abstract: None available.
Full text: A U.S. safety investigation into a fatal crash in March involving Tesla Inc.'s driver-assistance feature confirmed that the driver's hands weren't on the wheel in the seconds before the collision while also showing the vehicle sped up just before impact.
The preliminary report on Thursday from the National Transportation Safety Board didn't address the likely cause of the crash but shed new light on both the driver and car. A final conclusion is due out in the months ahead.
The Model X electric, sport-utility vehicle accelerated in the final seconds to about 71 miles an hour before the March 23 crash in Mountain View, Calif., according to the report. The Tesla system, called Autopilot, had alerted the driver to put his hands on the steering wheel more than 15 minutes before the collision, but apparently not in the moments before impact.
The findings come as auto makers and Silicon Valley are testing technologies that allow for varying levels of automation behind the wheel. Those include systems with driver-assist features -- such as Tesla's Autopilot -- as well as those that enable fully self-driving vehicles.
Fatal crashes have fueled concerns about whether driverless technology is ready for the real world.
A Tesla spokeswoman pointed to a previous company blog post about the incident that touted the safety of its vehicles. "Tesla Autopilot does not prevent all accidents -- such a standard would be impossible -- but it makes them much less likely to occur," the March blog said. "It unequivocally makes the world safer for the vehicle occupants, pedestrians and cyclists."
When Autopilot is activated by a driver, the system's sensors and cameras keep the vehicle in its lane and at a set speed and will adjust that speed if following a vehicle. It also can detect when a driver isn't engaged with the steering wheel.
Phil Magney, founder of consultancy VSI Labs, estimates that hands-free time without an alert can be about two minutes, which he has said is too much. "The driver misused the system because of the liberal grace period," he said.
Preliminary recorded data indicated the vehicle's traffic-aware cruise control, one of Autopilot's features, was set to 75 mph at the time of the March crash. The speed limit on the relevant area of the roadway is 65 mph, the NTSB said.
The agency's findings confirmed what Tesla had already said after the crash: The driver's hands weren't detected on the wheel six seconds before the crash.
The NTSB added new details, saying the driver's hands were detected on the wheel three times within a minute before the collision, for a total of 34 seconds.
The vehicle's Autopilot system was activated for about 19 minutes before the crash, the NTSB said. During that time, the system provided two visual and one auditory alert for the driver to put his hands back on the steering wheel, the agency said. Those occurred more than 15 minutes before the crash.
In the seconds leading up to the crash, the Model X was traveling 65 mph while following another vehicle, the agency said. The Tesla began steering left seven seconds before the crash, and after it no longer was behind the other vehicle it began accelerating three seconds before the collision to almost 71 mph, before running into a highway barrier.
"What strikes me from the NTSB preliminary report is that the car was silent -- no visual or auditory alert at all -- as it drove straight into the concrete median barrier," Todd Humphreys, an associate professor at the University of Texas at Austin whose research area is robot-perception systems, said in an email. "Yet the car's forward radar must surely have sensed the highly reflective crash attenuator mounted on the barrier."
The Tesla made no attempt at braking or steering away from the collision, the NTSB said.
The morning crash in Mountain View on Highway 101 killed the driver, 38-year-old Walter Huang. The vehicle's 400-volt lithium-ion high-voltage battery was breached in the crash, leading to a fire, investigators said.
Bystanders found Mr. Huang belted in the driver's seat and removed him from the vehicle before it became engulfed in flames, they said. He died from his injuries at a local hospital.
The lawyer of the driver's family said the NTSB's report backs up their claim that the car failed to detect the barrier. "The Autopilot system should never have caused this to happen," Mark Fong, a lawyer for Minami Tamaki LLP, said in a statement.
Credit: By Tim Higgins and Mike Spector
Subject: Aircraft accidents & safety; Fatalities; Traffic accidents & safety; Vehicles
Location: Silicon Valley-California United States--US
Company / organization: Name: University of Texas; NAICS: 611310; Name: Tesla Inc; NAICS: 336999; Name: National Transportation Safety Board; NAICS: 926120
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2018
Publication date: Jun 8, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2051484948
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2051484948?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-06-08
Database: The Wall Street Journal
Tesla Cutting About 9% of Global Workforce; Tesla hasn't yet turned an annual profit in its 15-year history and now faces heightened scrutiny from investors and analysts
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 June 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. on Tuesday said it will cut about 9% of its workforce in an effort to deliver its first profit during a make-or-break period of building a mass-market electric car.
The layoffs of about 3,500 employees come as Chief Executive Elon Musk reorganizes Tesla's management structure to make it flatter, and as the company tries to ramp up production of the all-electric Model 3 compact sedan.
In a memo to employees, Mr. Musk said the job cuts are mostly aimed at salaried staff and won't affect production workers assembling the company's vehicles. "This will not affect our ability to reach Model 3 production targets in the coming months," he wrote.
Tesla investors welcomed the news on Tuesday, sending the company's shares up more than 3% to $342.77. The stock has fallen about 8.8% over the past 12 months amid Tesla's struggles to crank up vehicle production.
The Silicon Valley auto maker, which hasn't turned an annual profit in its 15-year history, is facing heightened scrutiny from analysts and investors after starting assembly of the Model 3 last July and missing several production milestones that would have enabled it to generate free cash flow.
Mr. Musk has promised to finally reach the goal of making 5,000 Model 3 sedans a week by the end of June--a rate that if maintained would allow the company to show a profit in the third and fourth quarters, he has said.
"What drives us is our mission to accelerate the world's transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable," Mr. Musk wrote in the email to employees Tuesday. "That is a valid and fair criticism of Tesla's history to date."
Mr. Musk made similar comments in May after burning through more cash in the first quarter
than analysts had expected. At the time, he also reiterated statements that he didn't want to raise more cash--even as several analysts said Tesla will have to do so.
The company finished the first quarter with $2.7 billion in cash on hand. Tesla announced it was paring back planned capital expenditures this year to less than $3 billion from $3.4 billion last year. Its loss attributable to common shareholders in the first quarter was $710 million, the fifth consecutive quarter of record losses.
Tesla said the latest workforce cuts are affecting all departments except production workers. They come as Tesla prepares to launch other vehicles over the coming years. Mr. Musk has said he expects to reveal the Model Y compact sport-utility vehicle in March, ahead of production planned to start in the first half of 2020. He also has said production of the company's tractor-trailer truck and new sports car, the Roadster, will be in 2020.
"Cutting your way to profitability as you try to grow and launch vehicles is very difficult," Dave Sullivan, an analyst for AutoPacific Inc., said. "It seems like a strange time to cut unless you have promises about profitability for Q3 and your revenue can't support current staffing levels."
"Cutting heads will likely only lead to more delays, more stress and lower morale," Mr. Sullivan said.
Tesla is facing increased competition from traditional auto makers, such as Porsche and Jaguar, which are racing to bring their own all-electric cars to market, and from companies working to develop competing self-driving car technology. On Twitter, Mr. Musk acknowledged that he was losing good people. "I think they will find new jobs quickly," he said.
In May, Mr. Musk told workers he planned to change the management structure of the company
following the abrupt decision by Tesla's chief engineer, Doug Field, to take a leave of absence
. Tesla has lost several other high-profile executives since the beginning of 2017, including the chief financial officer, who has been replaced.
The auto maker finished 2017 with about 37,500 employees, a sharp increase from previous years as it expanded its ambitions and acquired SolarCity Corp., the solar-panel maker. Tesla continued an aggressive hiring pace through the first months of 2018, hitting a total of about 40,000, according to a person familiar with the effort.
Tesla had previously indicated that it finished 2017 with more than 9,000 production-line workers--but that was before a hiring spree to make up for failed efforts to automate the Model 3 assembly line.
"Tesla has grown and evolved rapidly over the past several years, which has resulted in some duplication of roles and some job functions that, while they made sense in the past, are difficult to justify today," Mr. Musk said in his memo.
He added: "We are also continuing to flatten our management structure to help us communicate better, eliminate bureaucracy and move faster."
Under a flat management structure, employees work for top leaders with few layers of managers in between.
Mr. Musk has already taken command of several significant roles at the company, including oversight of vehicle production from Mr. Field in April, and the sales and services divisions in February following the departure of Jon McNeill as Tesla's president of global sales.
His moves are being closely tracked both by short-sellers betting the company will fail to turn into a major automotive player, and by supporters who believe in his vision of a future where electric-powered cars are driven by computers. The latter group has won out so far, pushing Tesla's market value to over $50 billion to rival General Motors Co., which sells far more vehicles and is profitable.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Tesla Autopilot System Warned Driver to Put Hands on Wheel, U.S. Investigators Say
(June 7, 2018)
* Is Tesla Abandoning the Mass Market?
(May 21, 2018)
* There's a War on Middle Management and Tesla Just Joined It
(May 18, 2018)
* Tesla CEO Musk Says Company Is 'Flattening Management Structure' in Reorganization
(May 14, 2018)
* Tesla's Engineering Chief Takes Leave of Absence at Pivotal Moment
(May 11, 2018)
* Tesla Continues to Burn Through Cash
(May 2, 2018)
Credit: By Tim Higgins
Subject: Automobile industry; Leaves of absence; Employees; Executives
Location: Silicon Valley-California United States--US
People: Musk, Elon
Company / organization: Name: SolarCity Corp; NAICS: 221114, 238220, 333414; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jun 12, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2053534709
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2053534709?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-06-13
Database: The Wall Street Journal
Tesla to Cut Workforce by 9% In Bid for Sustainable Profit
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]13 June 2018: A.1.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. on Tuesday said it will cut about 9% of its workforce in an effort to deliver its first profit during a make-or-break period of building a mass-market electric car.
The layoffs of about 3,500 employees come as Chief Executive Elon Musk reorganizes Tesla's management structure to make it flatter, and as the company tries to ramp up production of the all-electric Model 3 compact sedan.
In a memo to employees, Mr. Musk said the job cuts are mostly aimed at salaried staff and won't affect production workers assembling the company's vehicles. "This will not affect our ability to reach Model 3 production targets in the coming months," he wrote.
Tesla investors welcomed the news on Tuesday, sending the company's shares up more than 3% to $342.77. The stock has fallen about 8.8% over the past 12 months amid Tesla's struggles to crank up vehicle production.
The Silicon Valley auto maker, which hasn't turned an annual profit in its 15-year history, is facing heightened scrutiny from analysts and investors after starting assembly of the Model 3 last July and missing several production milestones that would have enabled it to generate free cash flow.
Mr. Musk has promised to finally reach the goal of making 5,000 Model 3 sedans a week by the end of June -- a rate that if maintained would allow the company to show a profit in the third and fourth quarters, he has said.
"What drives us is our mission to accelerate the world's transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable," Mr. Musk wrote in the email to employees Tuesday. "That is a valid and fair criticism of Tesla's history to date."
Mr. Musk made similar comments in May after burning through more cash in the first quarter than analysts had expected. At the time, he also reiterated statements that he didn't want to raise more cash -- even as several analysts said Tesla will have to do so.
The company finished the first quarter with $2.7 billion in cash on hand. Tesla announced it was paring back planned capital expenditures this year to less than $3 billion from $3.4 billion last year. Its loss attributable to common shareholders in the first quarter was $710 million, the fifth consecutive quarter of record losses.
Tesla said the latest workforce cuts are affecting all departments except production workers. They come as Tesla prepares to launch other vehicles over the coming years. Mr. Musk has said he expects to reveal the Model Y compact sport-utility vehicle in March, ahead of production planned to start in the first half of 2020. He also has said production of the company's tractor-trailer truck and new sports car, the Roadster, will be in 2020.
"Cutting your way to profitability as you try to grow and launch vehicles is very difficult," Dave Sullivan, an analyst for AutoPacific Inc., said. "It seems like a strange time to cut unless you have promises about profitability for Q3 and your revenue can't support current staffing levels."
"Cutting heads will likely only lead to more delays, more stress and lower morale," Mr. Sullivan said.
Tesla is facing increased competition from traditional auto makers, such as Porsche and Jaguar, which are racing to bring their own all-electric cars to market, and from companies working to develop competing self-driving car technology. On Twitter, Mr. Musk acknowledged that he was losing good people. "I think they will find new jobs quickly," he said.
In May, Mr. Musk told workers he planned to change the management structure of the company following the abrupt decision by Tesla's chief engineer, Doug Field, to take a leave of absence. Tesla has lost several other high-profile executives since the beginning of 2017, including the chief financial officer, who has been replaced.
The auto maker finished 2017 with about 37,500 employees, a sharp increase from previous years as it expanded its ambitions and acquired SolarCity Corp., the solar-panel maker. Tesla continued an aggressive hiring pace through the first months of 2018, hitting a total of about 40,000, according to a person familiar with the effort.
Tesla had previously indicated that it finished 2017 with more than 9,000 production-line workers -- but that was before a hiring spree to make up for failed efforts to automate the Model 3 assembly line.
"Tesla has grown and evolved rapidly over the past several years, which has resulted in some duplication of roles and some job functions that, while they made sense in the past, are difficult to justify today," Mr. Musk said in his memo.
He added: "We are also continuing to flatten our management structure to help us communicate better, eliminate bureaucracy and move faster."
Under a flat management structure, employees work for top leaders with few layers of managers in between.
Mr. Musk has already taken command of several significant roles at the company, including oversight of vehicle production from Mr. Field in April, and the sales and services divisions in February following the departure of Jon McNeill as Tesla's president of global sales.
His moves are being closely tracked both by short sellers betting the company will fail to turn into a major automotive player, and by supporters who believe in his vision of a future where electric-powered cars are driven by computers. The latter group has won out so far, pushing Tesla's market value to over $50 billion, rivaling that of General Motors Co., which sells far more vehicles and is profitable.
Credit: By Tim Higgins
Subject: Automobile industry; Corporate profits; Investments; Employees; Electric vehicles; Blue collar workers; Workforce; Profitability; Executives; Layoffs
Location: Silicon Valley-California
People: Musk, Elon
Company / organization: Name: SolarCity Corp; NAICS: 221114, 238220, 333414; Name: Twitter Inc; NAICS: 519130; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2018
Publication date: Jun 13, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2053862501
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2053862501?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-06-18
Database: The Wall Street Journal
Sizing Up Tesla's $10 Billion Debt Stack; Electric-car maker has borrowed heavily to fund its big aspirations
Author: Wirz, Matt; Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 June 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. is growing faster than any other auto maker--just not always in ways stockholders would want. The company's debt has surged just as fast as sales, while profits remain elusive.
The electric-car maker booked a record $11.8 billion in revenues last year, as it began to launch its highly anticipated Model 3 sedan, up nearly sixfold from 2013. That growth has led stock investors to bless Tesla with a $57 billion market value, which rivals much larger companies like Ford Motor Co. and General Motors Co.
CEO Elon Musk predicted last week that production of the Model 3 would hit 5,000 cars a week in June and the company would start generating cash flow in the third quarter.
Tesla's cash bleed has accelerated since the Model 3 rolled out last year.
But Tesla has also taken on more than $10 billion of debt to make up for manufacturing problems--and to recapitalize Mr. Musk's home-solar company SolarCity--and $1.25 billion falls due next year.
That makes Tesla's fight to generate profits much more urgent than some shareholders might realize. Mr. Musk said Tuesday that the company would cut about 9%
of its workforce to save money.
A key measurement of Tesla's liquidity has weakened in recent quarters.
Write to Matt Wirz at matthieu.wirz@wsj.com and Charley Grant at charles.grant@wsj.com
Credit: By Matt Wirz and Charley Grant
Subject: Automobile industry
People: Musk, Elon
Company / organization: Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jun 17, 2018
Section: Markets
Publisher: Dow Jones & Compan y Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2056194338
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2056194338?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-06-18
Database: The Wall Street Journal
Tesla Sues Former Employee Amid Crackdown on 'Sabotage'; In a lawsuit, car maker says former employee hacked into computer system to steal company data and send it to an unnamed third party
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 June 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. in a lawsuit Wednesday accused a former employee of hacking into the auto maker's computer system to steal company data and send it to an unnamed third party.
The Silicon Valley electric-car maker's lawsuit, filed in federal court in Nevada, says the former employee, Martin Tripp, admitted to writing software to hack the company's manufacturing operating software and transferring several gigabytes of data to "outside entities," including dozens of confidential photographs and videos of the system. He also wrote a computer code to export Tesla data off its network, Tesla alleged in its suit.
A Tesla spokesman declined to comment further.
Mr. Tripp didn't have an immediate comment.
Earlier this week, Chief Executive Elon Musk in a memo to employees cautioned them to be on the lookout for possible saboteurs, noting that an employee had been found conducting an "extensive and damaging sabotage" to the company's operations and hacked into the company's manufacturing operating system to export data.
Asked on Twitter whether he was referring to Mr. Tripp in his memo, Mr. Musk didn't directly answer yes or no, but suggested there are multiple people attempting to harm Tesla. "There is more, but the actions of a few bad apples will not stop Tesla from reaching its goals," Mr. Musk wrote
. "With 40,000 people, the worst 1 in 1000 will have issues. That's still ~40 people."
Tesla said in its suit that Mr. Tripp began working at Tesla's battery factory outside of Reno in October 2017 as a process technician. The company alleges that Mr. Tripp was reassigned to a new role in May 2018 after his managers said he had performance problems, and was disruptive and combative with colleagues.
"Tripp retaliated against Tesla by stealing confidential and trade-secret information and disclosing it to third parties, and by making false statements intended to harm the company," the lawsuit said.
Tesla's investigators interviewed Mr. Tripp on June 14 and 15, during which he allegedly admitted hacking and transferring the data, the lawsuit said.
The disruption comes as Tesla is trying to ramp up production of the Model 3 sedan by the end of the month to 5,000 units in a single week, a goal that has eluded it for six months and placed great pressure on its finances.
Mr. Musk has rejected analysts' calls to raise more cash, saying Tesla will generate positive cash flow in the second half of the year after reaching the 5,000-a-week build rate and become profitable in the third and fourth quarters. To help reach that profitability goal, Tesla cut about 9% of its workforce
last week.
Tesla's battery factory has been a trouble spot in the ramp-up of the Model 3. It has struggled to ramp up automation there and required new equipment to be installed.
Tesla's lawsuit alleged that Mr. Tripp made false claims with the information he took, including that punctured battery cells had been used in some Model 3 customer vehicles, and that he overstated how much scrap material Tesla generated during the manufacturing process.
Business Insider earlier this month published a story it said was based upon internal Tesla records claiming that a misprogrammed robot was puncturing the battery cells used in cars, and that "an insane amount of raw material" was being scrapped at the Nevada factory. The lawsuit doesn't mention the article.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Software; Hackers
Location: Silicon Valley-California Nevada
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jun 20, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2057180720
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2057180720?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-06-21
Database: The Wall Street Journal
Business News: Tesla Accuses Former Employee of 'Sabotage'
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]21 June 2018: B.3.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. in a lawsuit Wednesday accused a former employee of hacking into the electric-car maker's computer system to steal company data and send it to an unnamed third party.
The lawsuit, filed in federal court in Nevada, says the former employee, Martin Tripp, admitted to writing software to hack the Silicon Valley company's manufacturing operating software and transferring several gigabytes of data to "outside entities," including dozens of confidential photographs and videos of the manufacturing system. He also wrote a computer code to export Tesla data off its network, Tesla alleged in its suit.
A Tesla spokesman declined to comment further. Mr. Tripp didn't have a comment.
Earlier this week, Chief Executive Elon Musk in a memo to employees cautioned them to be on the lookout for possible saboteurs, noting that an employee had been found conducting an "extensive and damaging sabotage" to the company's operations and hacking into the company's manufacturing operating system to export data.
Asked on Twitter whether he was referring to Mr. Tripp in his memo, Mr. Musk didn't directly answer yes or no, but suggested there were multiple people attempting to harm Tesla. "There is more, but the actions of a few bad apples will not stop Tesla from reaching its goals," Mr. Musk wrote. "With 40,000 people, the worst 1 in 1000 will have issues. That's still 40 people."
Tesla said in its suit that Mr. Tripp began working at Tesla's battery factory outside of Reno, Nev., in October 2017 as a process technician. The company alleges that Mr. Tripp was reassigned to a new role in May after his managers said he had performance problems, and was disruptive and combative with colleagues.
"Tripp retaliated against Tesla by stealing confidential and trade-secret information and disclosing it to third parties, and by making false statements intended to harm the company," the lawsuit said.
Tesla's investigators interviewed Mr. Tripp on June 14 and June 15, during which he allegedly admitted hacking and transferring the data, the lawsuit said.
The disruption comes as Tesla is trying to ramp up production of its Model 3 sedan by the end of June to 5,000 units in a single week, a goal that has eluded it for six months and placed great pressure on its finances.
Tesla's battery factory has been a trouble spot for Model 3 production.
Tesla's lawsuit alleged that Mr. Tripp made false claims in disseminating the information he took, including that punctured battery cells had been used in some Model 3 customer vehicles, and that he overstated how much scrap material Tesla generated during the manufacturing process.
Business Insider earlier this month published a story it said was based upon internal Tesla records claiming that a misprogrammed robot was puncturing the battery cells used in cars, and that "an insane amount of raw material" was being scrapped at the Nevada factory. The lawsuit doesn't mention the article.
Credit: By Tim Higgins
Subject: Software; Manufacturing
Location: Silicon Valley-California Nevada
People: Musk, Elon
Company / organization: Name: Twitter Inc; NAICS: 519130; Name: Business Insider; NAICS: 519130; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2018
Publication date: Jun 21, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2057313909
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2057313909?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-06-21
Database: The Wall Street Journal
Start Your Engines: The Second Wave of Luxury Electric Cars; Old guard auto makers are mounting a challenge to Tesla with their own premium EVs
Author: Boston, William
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 June 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: For the past five years, Tesla Inc. has owned the market for luxury electric vehicles. That is about to change.
Jaguar, the iconic brand now owned by India's Tata Motors Ltd., will start selling I-Pace, its first all-electric model, in August, the first shot in a battle between Tesla and old-guard auto makers for the premium electric-car market.
Other brands such as Audi, Porsche, Mercedes, BMW will follow shortly after with their own electric lineups and even Bentley and Rolls-Royce are making electric plans.
And the premium market is just the head of the spear. In the next five years, the world's leading manufacturers will invest some $105 billion to build and roll out 75 new battery-electric and plug-in hybrid models by the end of 2022, according to automotive research group Frost & Sullivan. By 2025, there could be nearly 500 new electric models on sale, accounting for one in five new-car sales world-wide.
"Customer perception is at a tipping point," Wolfgang Ziebart, a former BMW executive who designed Jaguar's I-Pace, told reporters at a preview of the car in Portugal. "Customers had a lot of reservations in the past--range, charging. And these are about to be resolved now."
Jaguar and Audi have been in a fierce a PR battle to win the moniker of first non-Tesla premium electric car on the road.
"Every now and then a car comes along that can build your business and your brand and the I-Pace is one of those," says Finbar McFall, head of product marketing at Jaguar Land Rover.
Jaguar has been taking orders for the I-Pace, which starts at about $69,500 in the U.S. with a six-month waiting list. It is nearly five meters long and sports the Jaguar's luxurious leather interior, steering wheel and bucket seats. It has the interior of a large SUV but takes up much less space bumper to bumper, thanks to the absence of an engine up front.
Audi has been teasing images of its e-tron, which even under its camouflaged paint to hide its street-ready appearance looks a lot like its Q5 SUV, sporty and masculine. Online, Audi is running videos with Daniel Brühl, a well-known actor in Germany, and plans a splashy launch at its electric-vehicle factory in Brussels next month, though the e-tron won't hit the streets until late fall in Europe at the earliest. Audi plans a big bash to send off the e-tron in the U.S. later this year, but is keeping details under wraps.
Premium cars, while a fraction of the total number of vehicles sold world-wide, is a high-margin, highly profitable business, largely dominated by the likes of Daimler AG's Mercedes-Benz, BMW AG, Volkswagen AG's Audi, Porsche, Aston Martin, Jaguar Land Rover and Toyota's Lexus.
This is the market Tesla attacked in 2012 when the company founded by Elon Musk launched the Model S, a Mercedes-killing luxury electric sedan. Tesla accounted for 10% of the 1.2 million plug-in electric vehicles sold world-wide last year.
While Tesla proved there was a luxury market for electric vehicles, traditional luxury car makers long ignored the challenge. Now they say they can no longer afford to.
"There is a new jump ball at the table for all luxury vehicles," says Scott Keogh, the head of Audi of America, adding that the winner will be the car maker that can combine a great car with the digital ecosystem around it.
Porsche is putting the final touches to an electric-car factory--one of 16 to be built by Volkswagen and its eight car brands over the next few years--to build the Taycan, its first all-electric car. The Taycan prototype has been spotted on the Nurburgring racetrack, a sleek ground-hugging sports car that resembles the stately Panamera. Its starting price, Porsche officials have said, will be around $75,000, slightly lower than Tesla's Model S.
The car, slated to begin production at the end of next year, uses technology from one of Porsche's Le Mans racing hybrids. Detlev von Platen, Porsche board member in charge of sales, says that the hybrid version accounts for 60% of Panamera sales in Europe, a sign even Porsche customers are eager to buy electric cars.
"The important thing is you have to have the feeling that you are driving a Porsche," he says.
Porsche went to extremes to build the car at the same factory where all of it original sports cars were made in Stuttgart's Zuffenhausen district, building new roads to make room for more than 1,400 new employees.
Mercedes aims to produce the first car under its new EQ subbrand next year and plans to launch 10 battery electric cars by 2022.
BMW, a pioneer with its i3 compact electric vehicle a decade ago, next year will launch an all-electric version of its Mini brand, an all-electric X3 SUV in 2020 and its new flagship--the full-electric iNEXT, which will also include advance self-driving and connectivity features.
"Tesla risks losing its leadership," says Mark Wakefield, an automotive consultant at Alix Partners.
Tougher emissions regulations are a big driver of the upcoming battle as they make it more expensive to develop conventional vehicles. Regulators in China and in some European countries have also begun taking steps to ban some conventional vehicles.
Audi's Mr. Keogh says the shift toward electric cars plays to the core strengths of the traditional premium brands. A decade ago, the top premium brands developed sport-utility vehicles, which provided a massive boost to sales and doubled the size of the premium market.
"The electric car is the new stimulus for luxury brands," he says. "People who buy luxury vehicles have one thing in common -- they don't want to be left behind."
Tesla has also stumbled recently. Its self-driving autopilot feature has come under scrutiny after a driver was killed in a crash while using the system. Tesla has blamed the crash on the driver
; a preliminary report
from the National Transportation Safety Board didn't address the cause of the crash but confirmed that the driver's hands weren't on the wheel in the final six seconds before the crash.
Production of the Model 3, Tesla's first mass-volume electric car, has been woefully behind schedule, providing an opportunity for rivals. And Tesla's Mr. Musk has all but abandoned the idea of selling the Model 3 at a low mass-market price of $35,000.
Steve Kalafer, founding chairman of Flemington Car & Truck Country, a network of dealerships in New Jersey, has been getting ready for the moment when consumers have more choice of electric cars, outfitting its locations with electric charging stations and preparing to send technicians to Porsche for training in the fall.
Mr. Kalafer credits Tesla with creating the electric-car market. But as traditional brands get into the act, he sees it eventually losing its aura of its exclusivity.
"This is the first time that the manufacturers are genuinely serious about electric cars," he says. "In five or six years, Tesla will be a fascinating car that is no longer unique in a group of fascinating cars."
Write to William Boston at william.boston@wsj.com
Credit: By William Boston
Subject: Automobile industry; Electric vehicles; Automobile sales
Location: United States--US India Germany New Jersey Portugal China Europe
People: Musk, Elon
Company / organization: Name: Tata Motors Ltd; NAICS: 336111; Name: Frost & Sullivan; NAICS: 541910; Name: Lexus; NAICS: 336111; Name: Aston Martin Lagonda Ltd; NAICS: 336111; Name: Audi of America Inc; NAICS: 336111; Name: Jaguar Land Rover; NAICS: 336111; Name: BMW AG; NAICS: 336111 , 336991, 423110; Name: Volkswagen AG; NAICS: 336111, 336390; Name: Tesla Inc; NAICS: 336999; Name : Daimler AG; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jun 22, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2057872526
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2057872526?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-06-23
Database: The Wall Street Journal
EXCHANGE --- Strategy: Luxury Cars Get Charged Up --- Old guard auto makers mount a challenge to Tesla with their own premium electric vehicles
Author: Boston, William
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]23 June 2018: B.4.
ProQuest document link
Abstract: None available.
Full text: For the past five years, Tesla Inc. has owned the market for luxury electric vehicles. That is about to change.
Jaguar, the iconic brand now owned by India's Tata Motors Ltd., will start selling I-Pace, its first all-electric model, in August, the first shot in a battle between Tesla and old-guard auto makers for the premium electric-car market.
Other brands such as Audi, Porsche, Mercedes, BMW will follow shortly after with their own electric lineups and even Bentley and Rolls-Royce are making electric plans.
And the premium market is just the head of the spear. In the next five years, the world's leading manufacturers will invest some $105 billion to build and roll out 75 new battery-electric and plug-in hybrid models by the end of 2022, according to automotive research group Frost & Sullivan. By 2025, there could be nearly 500 new electric models on sale, accounting for 1 in 5 new-car sales world-wide.
"Customer perception is at a tipping point," Wolfgang Ziebart, a former BMW executive who designed Jaguar's I-Pace, told reporters at a preview of the car in Portugal. "Customers had a lot of reservations in the past -- range, charging. And these are about to be resolved now."
Jaguar and Audi have been in a fierce a PR battle to win the moniker of first non-Tesla premium electric car on the road.
Jaguar has been taking orders for the I-Pace, which starts at about $69,500 in the U.S. with a six-month waiting list. It has the interior of a large SUV but takes up much less space, thanks to the absence of an engine up front.
Audi has been teasing images of its e-tron, which even under its camouflaged paint to hide its street-ready appearance looks a lot like its Q5 SUV, sporty and masculine. Online, Audi is running videos with Daniel Bruhl, a well-known actor in Germany, and plans a splashy launch at its electric-vehicle factory in Brussels next month, though the e-tron won't hit the streets until late fall in Europe at the earliest. Audi plans a big bash to send off the e-tron in the U.S. later this year, but is keeping details under wraps.
Premium cars, while a fraction of the total number of vehicles sold world-wide, is a high-margin, highly profitable business, largely dominated by the likes of Daimler AG's Mercedes-Benz, BMW AG, Volkswagen AG's Audi, Porsche, Aston Martin, Jaguar Land Rover and Toyota's Lexus.
This is the market Tesla attacked in 2012 when the company founded by Elon Musk launched the Model S, a Mercedes-killing luxury electric sedan. Tesla accounted for 10% of the 1.2 million plug-in electric vehicles sold world-wide last year.
Luxury car makers long ignored the challenge. Now they say they can no longer afford to.
"There is a new jump ball at the table for all luxury vehicles," says Scott Keogh, the head of Audi of America, adding that the winner will be the car maker that can combine a great car with the digital ecosystem around it.
Porsche is putting the final touches to an electric-car factory to build the Taycan, its first all-electric car. The Taycan prototype has been spotted on the Nurburgring racetrack, a sleek ground-hugging sports car that resembles the stately Panamera. Its starting price, Porsche officials have said, will be around $75,000, slightly lower than Tesla's Model S.
The car, to begin production next year, uses technology from one of Porsche's Le Mans racing hybrids. Detlev von Platen, Porsche board member in charge of sales, says the hybrid version accounts for 60% of Panamera sales in Europe, a sign even Porsche customers are eager to buy electric cars.
"The important thing is you have to have the feeling that you are driving a Porsche," he says.
Porsche went to extremes to build the car at the same factory where all of it original sports cars were made in Stuttgart's Zuffenhausen district, building new roads to make room for more than 1,400 new employees.
Mercedes aims to produce the first car under its new EQ subbrand next year and plans to launch 10 battery electric cars by 2022. BMW, a pioneer with its i3 compact electric vehicle a decade ago, next year will launch an all-electric version of its Mini brand, an all-electric X3 SUV in 2020 and its new flagship -- the full-electric iNEXT, which will also include advance self-driving and connectivity features.
Tougher emissions regulations are a big driver of the coming battle as they make it more expensive to develop conventional cars. Regulators in China and in some European countries have also begun taking steps to ban some conventional vehicles.
Audi's Mr. Keogh says the shift toward electric cars plays to the core strengths of the traditional premium brands.
"The electric car is the new stimulus for luxury brands," he says. "People who buy luxury vehicles have one thing in common -- they don't want to be left behind."
Tesla has also stumbled recently. Its self-driving autopilot feature has come under scrutiny after a driver was killed in a crash while using the system. Tesla has blamed the crash on the driver; a preliminary report from the National Transportation Safety Board didn't address the cause of the crash but confirmed the driver's hands weren't on the wheel in the final six seconds before the crash.
Sales of Tesla's flagship Model S are down 19% in the first quarter, while sales of its Model X SUV are flat, according to EV-Volumes.com, which said overall sales of plug-in electric vehicles were up 58% in the quarter, after rising 65% world-wide in 2017.
Production of the Model 3, Tesla's first mass-volume electric car, has been woefully behind schedule. And Tesla's Mr. Musk has all but abandoned the idea of selling the Model 3 at a low mass-market price of $35,000.
Steve Kalafer, founding chairman of Flemington Car & Truck Country, a network of dealerships in New Jersey, has been getting ready, outfitting its locations with electric charging stations and preparing to send technicians to Porsche for training in the fall.
Mr. Kalafer credits Tesla with creating the electric-car market. But he sees it eventually losing its aura of its exclusivity. "This is the first time that the manufacturers are genuinely serious about electric cars," he says.
Credit: By William Boston
Subject: Automobile industry; Electric vehicles; Automobile sales
Location: United States--US India Germany New Jersey Portugal China Europe
People: Musk, Elon
Company / organization: Name: Tata Motors Ltd; NAICS: 336111; Name: Frost & Sullivan; NAICS: 541910; Name: Lexus; NAICS: 336111; Name: Aston Martin Lagonda Ltd; NAICS: 336111; Name: Audi of America Inc; NAICS: 336111; Name: National Transportation Safety Board; NAICS: 926120; Name: Jaguar Land Rover; NAICS: 336111; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Volkswagen AG; NAICS: 336111, 336390; Name: Tesla Inc; NAICS: 336999; Name: Daimler AG; NAICS: 336111; Name: Luxury Cars; NAICS: 441110
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2018
Publication date: Jun 23, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2058159421
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2058159421?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-06-24
Database: The Wall Street Journal
Tesla Battery Ignited Twice After Fatal Florida Wreck, U.S. Investigators Say; NTSB examining how battery fires in electric vehicles can be a particular challenge to emergency workers
Author: Armental, Maria
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 June 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: The battery in a Tesla Inc. Model S car involved in a fatal crash in Florida last month reignited twice after firefighters extinguished the initial blaze that consumed the vehicle on impact, according to a preliminary report from the National Transportation Safety Board.
The report
, released Tuesday, is part of the federal agency's examination of the fire in the electric car's lithium-ion battery and the emergency response to it. According to the report, the Tesla vehicle was traveling at 116 miles an hour seconds before it lost control near a sharp turn where the speed limit was 30 mph and the advised speed was speed was 25 mph. Roadside warning signs include a flashing beacon.
The NTSB is examining several crashes involving Tesla vehicles, including a fatal crash in March near San Francisco that prompted questions about the safety of the company's Autopilot driver-assistance system. The NTSB's preliminary report on that incident, which was released this month, said that Autopilot had prompted the driver to grab the steering wheel
more than 15 minutes before the collision, but apparently not in the moments before the crash.
The NTSB said when it initiated the investigation into the Florida crash that it didn't expect to look at Autopilot because it didn't seem that the system had been engaged.
The agency has been looking at how battery fires in electric vehicles can be particularly challenging to emergency responders because they tend to reignite.
In the Florida crash, occurred May 8 in Fort Lauderdale, the driver and front-seat passenger were killed after the Tesla sedan veered off the roadway and into a concrete wall, bursting into flames, local police said. A third passenger was ejected from the car and taken to the hospital.
A Tesla representative declined to comment Tuesday. The company had said that it was working with local authorities and noted that high-speed collisions can result in fire "regardless of the type of car."
The NTSB, which isn't the auto-industry regulator but has significant influence over transportation safety, has yet to determine a likely cause of the crash.
According to witnesses, the driver crossed into the left lane to pass another vehicle and lost control as he tried to move back into the right lane.
The car struck a wall in front of a house twice before stopping and bursting into flames, according to the accident report.
Tim Higgins contributed to this article.
Write to Maria Armental at maria.armental@wsj.com
Credit: By Maria Armental
Subject: Aircraft accidents & safety; Traffic accidents & safety; Electric vehicles
Location: Florida United States--US San Francisco California
Company / organization: Name: Tesla Inc; NAICS: 336999; Name: National Transportation Safety Board; NAICS: 926120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jun 26, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2059239712
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2059239712?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-06-27
Database: The Wall Street Journal
Tesla Battery Ignited Twice After Crash
Author: Armental, Maria
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 June 2018: B.4.
ProQuest document link
Abstract: None available.
Full text: The battery in a Tesla Inc. Model S car involved in a fatal crash in Florida last month reignited twice after firefighters extinguished the initial blaze that consumed the vehicle on impact, according to a preliminary report from the National Transportation Safety Board issued Tuesday.
The report is part of the federal agency's examination of the fire in the electric car's lithium-ion battery and the emergency response to it.
According to the report, the Tesla vehicle was traveling at 116 miles an hour seconds before it lost control near a sharp turn where the speed limit was 30 mph and the advised speed was 25 mph. Roadside warning signs include a flashing beacon.
The NTSB is examining several crashes involving Tesla vehicles, including a fatal crash in March near San Francisco that prompted questions about the safety of the company's Autopilot driver-assistance system.
The NTSB's preliminary report on that incident, which was released this month, said that Autopilot had prompted the driver to grab the steering wheel more than 15 minutes before the collision, but apparently not in the moments before the crash.
The NTSB said when it initiated the investigation into the Florida crash that it didn't expect to look at Autopilot because it didn't seem that the system had been engaged.
The agency has been looking at how battery fires in electric vehicles can be particularly challenging to emergency responders because they tend to reignite.
In the Florida crash, which occurred on May 8 in Fort Lauderdale, the driver and front-seat passenger were killed after the Tesla sedan veered off the roadway and into a concrete wall, bursting into flames, local police said. A third passenger was thrown from the car and taken to the hospital.
A Tesla representative declined to comment Tuesday. The company had said that it was working with local authorities and noted that high-speed collisions can result in fire "regardless of the type of car."
The NTSB, which isn't the auto-industry regulator but has significant influence over transportation safety, has yet to determine a likely cause of the crash.
According to witnesses, the driver crossed into the left lane to pass another vehicle and lost control as he tried to move back into the right lane.
---
Tim Higgins contributed to this article.
Credit: By Maria Armental
Subject: Aircraft accidents & safety; Traffic accidents & safety; Electric vehicles
Location: Florida San Francisco California
Company / organization: Name: Tesla Inc; NAICS: 336999; Name: National Transportation Safety Board; NAICS: 926120
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2018
Publication date: Jun 27, 2018
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2059443379
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2059443379?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-06-27
Database: The Wall Street Journal
Tesla's Busy and Worrisome Week; Elon Musk's Model 3 production challenges are likely to linger even if Tesla hits next target.
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 June 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: The assembly lines are cranking this week at Tesla. The problem is they need to crank this much every other week of the quarter.
When the electric car manufacturer announces second-quarter delivery results next week, investors will likely focus on whether Tesla hit its goal of producing 5,000 Model 3 sedans in a single week.
Reaching that goal would certainly qualify as good news. The deadline to reach the weekly milestone, which Tesla originally planned to hit last year, has been rolled back several times. Wall Street analysts now expect about 138,000 Model 3 deliveries this year, according to estimates compiled by FactSet. That figure was about 228,000 last August.
More important, Moody's Investors Service, which downgraded Tesla's credit rating
in March, said meeting production targets was necessary to avert further downgrades.
But even if CEO Elon Musk can hit his mark, it doesn't mean Tesla can produce at that level consistently. There should be real concern on that front.
For starters, Tesla has developed a habit
of jamming as much production as possible into the end of the quarter. In last year's fourth quarter, Tesla produced a third of its 2,425 Model 3s in the final days of the period and in the most recent quarter, it was a fifth of the 9,766 cars produced.
There's reason to believe that pattern will repeat itself. "All Model 3 production lines have demonstrated capability of producing 500 cars per day," read a slide presented at Tesla's shareholder meeting earlier this month. That phrasing stopped short of actually saying the lines were producing 500 cars a day. Later on in June, Tesla erected a new production line housed in a tent at the company's Fremont property.
This approach can help meet a deadline, but it raises questions about whether Tesla can produce high-quality cars during the crunchtime. Reports of Model 3 quality problems have plagued the company. That in turn can hurt its fragile finances. Analysts at Bernstein Research said in a note last week that Tesla's gross margin in its "services and other" reporting segment, which includes vehicle service and maintenance expenses, has plunged from 5% to negative 45% since the third quarter of 2016.
If Tesla can't reverse that trend, the growth story that has captivated its bulls looks flimsier than ever. The company has already announced plans to cut 9% of its workforce and scaled back its capital spending forecast. Tesla also must contend with persistently negative cash flow
, more than $10 billion in total debt on its books, and looming competition from more experienced auto makers.
Tesla simply can't afford more hiccups, no matter what it reports next week.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Automobile industry; Shareholder meetings; Business forecasts
People: Musk, Elon
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jun 27, 2018
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2059540934
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2059540934?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribu tion is prohibited without permission.
Last updated: 2018-06-27
Database: The Wall Street Journal
Elon Musk Races to Exit Tesla's 'Production Hell'; As the entrepreneur's electric-car company nears deadline to mass produce the Model 3, Mr. Musk pushes back on doubters; 'They also said we couldn't land rockets'
Author: Higgins, Tim; Pulliam, Susan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 June 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: FREMONT, Calif.--Dressed in the same black Tesla Inc. T-shirt that he wore when he entered his car factory three days earlier, Elon Musk sat beneath fluorescent lights in a cluster of desks near the body shop.
On a chair next to him was a white caseless pillow that he used while sleeping on the floor under his desk. The billionaire CEO and chairman of the electric-car maker wasn't far from two general assembly lines making the Model 3 sedan, surrounded by the sound of banging metal.
Outside, under a giant makeshift tent, workers were also building sedans on a third, hastily constructed line.
"We made a lot of mistakes. That's why we're here," said Mr. Musk in an interview last week. He appeared calm, even upbeat at times, despite not having left the factory in three straight days, trying to ensure the company will finally meet his goal of building 5,000 Model 3s a week--after two missed deadlines. Saturday is the latest deadline; an announcement about production capacity is expected within days after that.
Mr. Musk and Tesla are at a crucial moment
as the company aims to mass-produce the Model 3 and transform from an unprofitable niche player into a profitable major auto maker. Tesla has about 40,000 employees and a market value of $58 billion, rivaling General Motors Co.
A maverick entrepreneur, Mr. Musk helped revolutionize online payments by co-founding PayPal, built a rocket company, SpaceX, valued at $21 billion, and with Tesla created a luxury brand popularizing electric-vehicle technology that auto makers dismissed for years.
Mr. Musk, who turns 47 years old on Thursday, sets a high bar with the hope that if he reaches a fraction of his goal, Tesla will be successful, people familiar with his thinking said. For all his success, Mr. Musk can be his own worst enemy, setting unrealistic expectations publicly and at times displaying an erratic management style
that add to Tesla's challenges, say investors, former Tesla executives and close observers.
"Organization and execution is where he doesn't seem as good as other great leaders," said James Anderson, who oversees the Tesla investment at Baillie Gifford, the auto maker's third-largest institutional shareholder, which holds nearly 13 million shares. He is "divided" on whether Mr. Musk is the right leader for Tesla going forward but remains patient because of the potential.
"We are supportive for the moment but it's not necessarily permanent," Mr. Anderson said.
Tesla has fallen six months behind schedule on Mr. Musk's Model 3 production goal. The delays have stretched Tesla's cash position, led Moody's Investors Service to downgrade its debt and helped push its stock down 5.6% over the past year.
Mr. Musk stood onstage at a launch party for Tesla's Model 3 sedan and warned employees they would be in "production hell." He expected it to last six months or so. That was nearly a year ago.
He concedes some problems that led to the delay are of his own making. Asked if the "production hell" he predicted is self-inflicted, Mr. Musk shrugged. "Most people are their own worst enemy," he said in last week's interview.
As Tesla struggled to produce
the Model 3, Mr. Musk brushed aside warnings from executives on production goals, complicated Tesla's assembly process and spooked Wall Street by jousting with analysts.
At least 50 vice presidents or higher-ranking executives have departed over the past 24 months, according to people familiar with the company, partly because of its acquisition of SolarCity Corp. Mr. Musk says he sees executive turnover as being in line with other large companies.
Some former executives say Mr. Musk's drive can be invigorating, making them feel part of a bigger goal to change the world. But that wears away as he grows increasingly impatient
, sometimes blaming managers for missing his improbable goals, they say.
A night owl, Mr. Musk often fires off emails at odd hours. After some late-night meetings, he forwards messages to underlings detailing an issue, adding only the recipient's first name and a question mark.
Mr. Musk, whose other projects promise shuttles to Mars and tubes that whip people around the country, bristles at being told what's impossible. "People have said that my entire life; what else is new?" he said last week. "They also said we couldn't land rockets." His venture Space Exploration Technologies Corp., or SpaceX, did that on land in 2015 and on a barge at sea in 2016.
At Tesla, Mr. Musk wanted to reinvent the assembly process as the company prepared to reveal the Model 3 in early 2016.
He began talking about "the machine that builds the machine" and envisioning a people-free factory that could churn out cars at a rate only slowed by air resistance.
Tesla had initially planned to gradually increase Model 3 production with the goal of making a total of 500,000 vehicles, including other models, in 2020, according to people familiar with the plan. That would let new revenue from the mainstream car pay for Tesla's expansion, they said.
But Mr. Musk wanted to accelerate production after surprisingly strong interest in the Model 3--Tesla received 180,000 reservations in the 24 hours after announcing the car, which has a starting price of $35,000.
His executives pushed back, warning it wasn't feasible because the design of the car wasn't yet locked into place, the robots and tooling needed to be ordered, and time was needed to work out inevitable kinks in the complicated assembly process until the end of 2017, say people familiar with the conversations.
Mr. Musk sped forward, publicly declaring in May 2016 that Tesla would make as many as 200,000 Model 3 cars in the second half of 2017. Tesla ended up making about 2,700.
Mr. Musk, in last week's interview, defended his decision to advance the timetable. Some executives are looking to "externalize responsibility and say it was anything but their fault," he said.
He said if anything, he should have "constrained the time further" because Tesla would have discovered faster an approach that wasn't working and corrected course.
In July 2017, Mr. Musk announced production had begun and scaled back plans, promising 20,000 Model 3s in December. Tesla was still hand-building parts of the Model 3s in the early weeks of production. The body shop wasn't fully installed until September and took weeks of calibration to ensure robots avoided collision amid the ballet of welding the vehicle together.
Tesla installed 1,028 robots in its Fremont body shop, roughly one-third of which were uniquely hung upside down so the company could cram more into the Fremont space.
Mr. Musk thought keeping the robots close to each other would boost efficiency, people familiar with the effort said.
At Tesla's battery factory outside Reno, Nev., the designs for the automated robots were so complex they couldn't get the batteries made. In October, Mr. Musk camped at the factory, posting a video on social media of himself with a plastic cup of whiskey, roasting a marshmallow on the roof as he sang Johnny Cash's "Ring of Fire." He tweeted: "Production hell, ~8th circle."
Tesla's Fremont factory struggled to implement Mr. Musk's dream of an automated conveyance system running beneath the general assembly line. Unlike typical car factories where workers deliver parts to workstations, Mr. Musk wanted crates to shuttle parts to automated elevators that would lift the right number of pieces at the right time. Tesla invested $80 million to $90 million in an automated warehouse system, according to a person familiar with the effort, but engineers struggled to make it work.
Tesla ripped out part of the conveyor system and hired more workers to run parts around the factory. The company later used the conveyor for the makeshift assembly line under the tent outside to improve the odds of meeting the 5,000-a-week goal, believing it could handle, at most, 7,000 cars a week, according to a person familiar with the matter.
Mr. Musk concedes he relied too much on automation. "You really want to get the process nailed down and then automate, as opposed to assuming you know what the process will be, then automating that," he said in the interview.
Some of his atypical manufacturing ideas may still pay off. Tesla makes its own seats for the Model 3, a move it says saves costs. And at the body shop, where the vehicles are welded together, Tesla estimates it may be able to save 36 people a shift by automating the process of loading some material into the line.
After Mr. Musk inflamed Wall Street in May during Tesla's quarterly financial call by cutting off analysts--"Boring bonehead questions are not cool," he said--he sought to make amends by calling some of Tesla's largest shareholders, including Baillie, Fidelity Investments and T. Rowe Price to assuage concerns, people familiar with the matter said.
Fidelity and T. Rowe declined to comment.
Mr. Musk has spread himself across other projects. A recent seven-day stretch saw him overseeing a SpaceX rocket launch, announcing a management reorganization at Tesla, criticizing the media on Twitter for covering the crash of a Tesla vehicle in Utah using driver-assistance technology, and appearing in Los Angeles to promote a side project, the Boring Co., to dig a tunnel beneath the city.
He acknowledged he is spread thin, but says he's focused on the production goal.
"I'm feeling good about things," he said. "I think there's a good vibe--I think the energy is good; go to Ford, it looks like a morgue." He said he just learned the phrase "What's your vibe?" from his new girlfriend, the musician known as Grimes. Earlier in the day, Draymond Green, the Golden State Warriors star fresh off winning an NBA championship, stopped by the factory.
Later that day, Mr. Musk flew to Salt Lake City to recruit artificial-intelligence talent at a conference. He planned to return to Fremont a few hours later.
Write to Tim Higgins at Tim.Higgins@WSJ.com and Susan Pulliam at susan.pulliam@wsj.com
Related
* Heard on the Street: Tesla's Busy and Worrisome Week
* Tesla Says 'Quite Likely' to Meet 5,000-a-Week Model 3 Production Goal
* Tesla CEO Musk Says Company Is 'Flattening Management Structure' in Reorganization
Credit: By Tim Higgins and Susan Pulliam
Subject: Automobile industry; Automobile production; Production capacity; Investments; Factories; Deadlines; Executives; Vehicles
People: Musk, Elon
Company / organization: Name: Space Exploration Technologies Corp; NAICS: 336414
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jun 28, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2059831580
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2059831580?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without perm ission.
Last updated: 2018-06-28
Database: The Wall Street Journal
Auto Makers in the U.S., Including Tesla and Ford, Brace for Additional Tariff From China; Beijing is set to impose an extra 25% tariff on American auto imports this week
Author: Moss, Trefor
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 July 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: SHANGHAI--China fulfilled a pledge to slash tariffs on imported cars Sunday, but the respite for auto makers who export to China from the U.S. will be brief as Beijing prepares to slap an additional 25% tariff on U.S. auto imports this Friday.
Ford Motor Co. and Tesla Inc., as well as Germany's BMW AG and Mercedes-Benz maker Daimler AG--which build premium sport-utility vehicles in the U.S. and ship them to China--stand to suffer the most. They will be forced to charge consumers more, or absorb the added costs, as their rivals take advantage of the reduced tariffs to lower prices.
Beijing announced in May
that it would reduce tariffs on imported cars from 25% to 15%, in what was widely viewed as a concession to defuse trade tensions with Washington. But in recent weeks both countries have edged closer to a full-scale trade war
.
Auto makers are caught in the crossfire
, jeopardizing their sales in the world's largest auto market.
"It's essential that governments work together to lower, not raise, barriers to trade," said a Ford spokesman. "We encourage both governments to continue to work together through negotiation to resolve issues between these two important economies."
The additional 25% tariff taking effect Friday on American automotive products and agricultural goods was announced by China after the Trump administration said it would impose tariffs on $34 billion of Chinese goods, including machinery and home appliances--also starting Friday.
U.S. President Donald Trump has proposed a series of sanctions against China in response to what he says are its unfair trade practices. China disputes those claims, and Chinese President Xi Jinping recently told a group of mostly Western business leaders that he intends to fight fire with fire.
China's steep tariffs on imported cars have led most foreign auto makers to build cars through joint ventures with Chinese partners to evade the tariffs. But imports are a lucrative business for premium and luxury auto brands.
China imported 1.2 million cars last year, according to the China Automobile Dealers Association, or about 4% of the vehicles sold in China. Imports are especially popular in affluent cities such as Beijing and Shanghai, where imported Porsches, Teslas and Mustangs are common sights.
Car companies that import vehicles made in Europe or Japan, such as Porsche AG and Lexus, still stand to gain from the original tariff cut. But those that import vehicles from the U.S. now face a 40% tariff, rather than the 15% rate they had briefly expected.
BMW and Daimler import more cars to China than any of their rivals, each having sold over 180,000 imports in China in 2017, comprising a mix of U.S.-built SUVs and European-built sedans. Daimler warned investors
in June that the likely fall in premium SUV sales in China caused by higher tariffs would hit its bottom line. Some auto analysts expect other auto makers
to follow suit and lower their earnings expectations.
A BMW spokesman said the company built over 371,000 vehicles at its Spartanburg, S.C., plant last year, of which 70% were exported. A quarter of the SUVs exported from the plant went to China, more than any other market, he said.
"Barrier-free access to markets is therefore a key factor not only for our business model, but also for growth, welfare and employment throughout the global economy," he said.
Audi AG, BMW's rival in the premium segment, only exports cars built in Europe, so it can still capitalize on the lower tariff rate. Cars built in Europe only account for around a tenth of Audi's sales in China--compared with over 30% for both BMW and Daimler--and company executives say they aim to grow sales significantly.
Ford sold nearly 65,000 Lincoln vehicles exported to China last year, as well as nearly 19,000 Fords. It has plans to start building Lincoln cars locally from 2019, but until then its sales are likely to be dented. Lincoln had been a rare bright spot for Ford in China, with Ford's sales falling 22% here in the first five months of this year.
Janet Lewis, Macquarie Capital Research's managing director of equity research, said she expects Lincoln sales could suffer more than rivals "as its brand value is lower than the German premium brands."
While General Motors Co. only imports in tiny volumes, Tesla sold roughly 17,000 cars in China last year, making the country its second biggest market
after the U.S. Tesla also has plans for a local factory, but that is unlikely to be up and running before 2021.
Importers of U.S.-built cars, including Tesla, had promised price cuts which are now likely to be reversed. The price of a Tesla Model S in China was set to fall from around $114,400 to $107,100. Instead, it will now increase to roughly $125,300, assuming Tesla passes on the whole tariff increase to its customers.
"Tesla customers are likely less price-sensitive due to the unique nature of the product," Ms. Lewis said, though the higher tariffs could still translate into lower margins for the electric-car specialist, which last year booked over $2 billion in China sales.
Tariffs are linked to cost and import prices, not retail prices, meaning that the previous 25% tariff typically constituted around 15% of the retail cost of a car imported into China.
In its recent earnings guidance, Daimler said it would not pass on the full cost of the tariff increase to its customers. A Daimler spokeswoman said the company favors free trade and open markets, but wouldn't "speculate on the tariff discussion."
Write to Trefor Moss at Trefor.Moss@wsj.com
Related
* GM Says Tariffs on Auto Imports Could Hurt Its Business, Drive Up Car Prices
* Daimler Issues Profit Warning as Chinese Tariffs Hit U.S.-Built SUVs
* Ford to Work With Baidu as It Seeks to Stop Slide in Chinese Sales
* Trump Administration Looks Into New Tariffs on Imported Vehicles
* Trump to Impose Steep Aluminum and Steel Tariffs
Credit: By Trefor Moss
Subject: Automobile industry; International trade; Tariffs; Exports; Automobile sales; Price cuts
Location: Beijing China United States--US Germany China Japan Europe
People: Trump, Donald J Lewis, Janet Xi Jinping
Company / organization: Name: Lexus; NAICS: 336111; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Audi AG; NAICS: 336111; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999; Name: Porsche AG; NAICS: 336111; Name: Daimler AG; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jul 1, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2062119293
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2062119293?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-01
Database: The Wall Street Journal
Tesla Reaches Production Goal for Making 5,000 Model 3s; CEO Elon Musk went to extraordinary lengths to meet the twice-missed target, but now Tesla must show it is sustainable
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 July 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. built its 5,000th Model 3 sedan in about a single week as workers celebrated early Sunday, reaching a long-delayed goal that should ease some scrutiny on the unprofitable auto maker in its bid to become a mainstream provider of electric vehicles.
Chief Executive Elon Musk confirmed the weekly goal was met in a memo sent to employees Sunday, according to a person familiar with the matter. Workers at the company's Fremont, Calif., factory began posting photos of the celebration on Instagram and Snapchat as the sun began to rise, including messages that read: "5,000...feels good to hit that mark!!!" and "5000 Tesla Model 3 we did it." One worker posted a sign celebrating the achievement.
Mr. Musk went to extraordinary lengths in recent weeks to meet the twice-missed goal almost a year after starting production of the Model 3, which is priced more affordably than its other luxury models.
The billionaire CEO had Tesla erect a giant tent outside the factory to house a hastily constructed third general assembly line. Workers spent long shifts at the factory while Mr. Musk slept on the factory floor to ensure they met the deadline by Saturday night. It appeared work at the factory bled into the early hours of Sunday to reach the goal.
The milestone is critical
because Mr. Musk and analysts have said that the 5,000-a-week rate would allow Tesla to generate enough cash to sustain operations and reach profitability, expected in the second half of the year. The threshold may also enable Tesla to avoid having to raise more cash on the debt or equity markets anytime soon.
But Tesla will have to prove it can maintain the frenzied pace, which will likely tax the workforce, challenge the assembly line's prowess and test parts suppliers. Last week, battery supplier Panasonic told shareholders that there had been a sharp increase in Model 3 production that was leading to occasional battery-cell shortages.
Tesla still has a long way to go to prove it is no longer a niche luxury brand but one capable of building millions of cars a year. General Motors Co., whose market value is nearly the same as Tesla's, produces about 10 million vehicles annually. Tesla made roughly 100,000 vehicles last year.
Mr. Musk has been under intense pressure for the past year as his company struggled to ramp production. He celebrated the start of production last July, warning of a coming "production hell" that he suggested might last about six months as the company learned to make the compact car.
But as time went on, it became clear that the task was proving more challenging than expected. In May 2016, Mr. Musk had said the company could make 100,000 to 200,000 Model 3s in the second half of 2017.
Mr. Musk later downgraded his forecast, saying Tesla was aiming to make 5,000 Model 3 cars in a single week by the end of 2017. Instead, Tesla built about 2,700 Model 3s last year and only 793 in the last week of 2017.
Tesla moved the milestone to the end of the first quarter and then again to around the end of June as the company struggled to make batteries at its factory near Reno, Nev., and to overcome an overly complex automated general assembly line at Fremont. It made just 2,000 Model 3s in the final week of the first quarter.
Mr. Musk's unrealistic expectations and his occasional erratic management style have stirred doubt among some long-supportive shareholders. James Anderson, who oversees the Tesla investment at Baillie Gifford, the auto maker's third-largest institutional shareholder, told The Wall Street Journal he is "divided" on whether Mr. Musk is the right leader for Tesla going forward but remains patient because of the potential.
Tesla's shares are down about 3% over the past 12 months after rising roughly 70% over the year-earlier period. The stock is among the most shorted as investors bet against Mr. Musk's ability to pull off his gamble that he can make a profitable mass-market car.
Tesla's dwindling cash piles have raised questions among investors and analysts, especially as Mr. Musk says he doesn't want to raise more money. The company ended the first quarter with $2.7 billion of cash on hand as its negative free cash flow exceeded analysts' expectations during the period.
Mr. Musk ordered belt tightening across the company, including a 9% workforce cut in June that was spread across the entire company except among those making the cars.
To improve the odds of meeting the 5,000-a-week goal and avoid another embarrassing miss, Mr. Musk recently had Tesla build the third line outside under the makeshift tent. The company used parts of a failed conveyor system that was supposed to run beneath the general assembly line and deliver parts to it. Tesla hired more workers to run parts around the factory.
"No other car company has ever had the need to do such a thing--in order to reach a promised production level by a certain date to keep investors happy and the founder's reputation intact," said James Womack, whose research at Massachusetts Institute of Technology into automotive manufacturing in the 1980s helped change how auto makers in the U.S. operated.
"So Tesla is now a pioneer in temporary assembly, charting a course no one else will want or need to follow," Mr. Womack said.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Elon Musk Races to Exit Tesla's 'Production Hell'
(June 27)
Credit: By Tim Higgins
Subject: Automobile industry; Workers
Location: Massachusetts United States--US
People: Musk, Elon
Company / organization: Name: Snap Inc; NAICS: 511210; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jul 1, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2062290329
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2062290329?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-02
Database: The Wall Street Journal
Tesla Hits Model 3 Production Goal
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 July 2018: B.2.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. built its 5,000th Model 3 sedan in about a single week as workers celebrated early Sunday, reaching a long-delayed goal that should ease some scrutiny on the unprofitable auto maker in its bid to become a mainstream provider of electric vehicles.
Chief Executive Elon Musk confirmed the weekly goal was met in a memo sent to employees Sunday, according to a person familiar with the matter. Workers at the company's Fremont, Calif., factory began posting photos of the celebration on Instagram and Snapchat as the sun began to rise, including messages that read: "5,000. . .feels good to hit that mark!!!" and "5000 Tesla Model 3 we did it." One worker posted a sign celebrating the achievement.
Mr. Musk went to extraordinary lengths in recent weeks to meet the twice-missed goal almost a year after starting production of the Model 3, which is priced more affordably than its other luxury models.
The billionaire CEO had Tesla erect a giant tent outside the factory to house a hastily constructed third general assembly line. Workers spent long shifts at the factory while Mr. Musk slept on the factory floor to ensure they met the deadline by Saturday night. It appeared work at the factory bled into the early hours of Sunday to reach the goal.
The milestone is critical because Mr. Musk and analysts have said that the 5,000-a-week rate would allow Tesla to generate enough cash to sustain operations and reach profitability, expected in the second half of the year. The threshold may also enable Tesla to avoid having to raise more cash on the debt or equity markets anytime soon.
But Tesla will have to prove it can maintain the frenzied pace, which will likely tax the workforce, challenge the assembly lines prowess and test parts suppliers. Last week, battery supplier Panasonic told shareholders that there had been a sharp increase in Model 3 production that was leading to occasional battery-cell shortages.
Tesla still has a long way to go to prove it is no longer a niche luxury brand but one capable of building millions of cars a year. General Motors Co., whose market value is nearly the same as Tesla's, produces about 10 million vehicles annually. Tesla made roughly 100,000 vehicles last year.
Mr. Musk has been under intense pressure for the past year as his company struggled to ramp production. He celebrated the start of production last July, warning of a coming "production hell" that he suggested might last about six months as the company learned to make the compact car.
But as time went on, it became clear that the task was proving more challenging than expected. In May 2016, Mr. Musk had said the company could make 100,000 to 200,000 Model 3s in the second half of 2017.
Mr. Musk later downgraded his forecast, saying Tesla was aiming to make 5,000 Model 3 cars in a single week by the end of 2017. Instead, Tesla built about 2,700 Model 3s last year and only 793 in the last week of 2017.
Tesla moved the milestone to the end of the first quarter and then again to around the end of June as the company struggled to make batteries at its factory near Reno, Nev., and to overcome an overly complex automated general assembly line at Fremont. It made just 2,000 Model 3s in the final week of the first quarter.
Mr. Musk's unrealistic expectations and his occasional erratic management style have stirred doubt among some long-supportive shareholders. James Anderson, who oversees the Tesla investment at Baillie Gifford, the auto maker's third-largest institutional shareholder, told The Wall Street Journal he is "divided" on whether Mr. Musk is the right leader for Tesla going forward but remains patient because of the potential.
Credit: By Tim Higgins
Subject: Automobile industry; Stockholders; Workers
People: Musk, Elon
Company / organization: Name: Wall Street Journal; NAICS: 511110; Name: Snap Inc; NAICS: 511210; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2018
Publication date: Jul 2, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2062740607
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2062740607?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Repro duced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-02
Database: The Wall Street Journal
Tesla Sets New Model 3 Target of 6,000 a Week; The new target suggests the car maker expects no slowdown in its production pace after reaching its long-delayed goal of making 5,000 Model 3s per week
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 July 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. aims to increase its Model 3 output to 6,000 vehicles a week by late August, suggesting it expects no letup after recently reaching its goal of making 5,000 of the sedans in a seven-day stretch
.
The Silicon Valley auto maker on Monday also reaffirmed that it expects to have positive cash flow and post a profit in the third and fourth quarters. Keeping up the 5,000-a-week production pace--which was a long-delayed accomplishment--is key to Tesla meeting its cash-flow forecast.
Tesla on Monday reported how many cars it made in the final week of the second quarter: 5,031 Model 3 sedans, as well as 1,913 Model S sedans and Model X sport-utility vehicles.
The electric-vehicle maker has spent the past year
struggling to meet production goals for the Model 3,
twice missing the 5,000-a-week target for what is considered Tesla's first mass-market offering. The most recent end-of-quarter goal put the company under intense scrutiny and raised questions about whether Chief Executive Elon Musk, while inspiring fans and exciting investors, could actually execute on the company's plans.
Workers had already been celebrating their accomplishment Sunday, and Mr. Musk sent them a memo confirming the production goal had been reached.
"I think we just became a real car company," Mr. Musk wrote in his celebratory memo.
Tesla shares rose Monday morning but were off slightly in afternoon trading.
About a fifth of the Model 3s manufactured to achieve the 5,000-a-week target rolled off a general assembly line hastily put together beneath a tent outside of Tesla's Fremont, Calif., factory in the final weeks of the quarter. That line "helped to get us there faster and will also help to exceed that rate," the company said Monday.
Deliveries of Tesla vehicles, however, failed to meet analyst expectations during the second quarter.
The company said it delivered 18,440 Model 3s to customers globally; analysts were expecting 28,000 deliveries, according to a survey by FactSet. Sales of the Model S sedan and Model X sport-utility vehicle, which typically sell for about $100,000 each, rose slightly to 22,300 combined from 22,000 a year earlier. Analysts had expected a slight increase to 22,500 vehicles.
Total production for the just-ended quarter rose to 53,339 vehicles, including 28,578 Model 3s. Tesla had 11,166 Model 3s, and 3,892 Model S and Model Xs in transit, which will be counted as sales in the third quarter.
"The high number of customer vehicles in transit for Model 3 was primarily due to a significant increase in production towards the end of the quarter," Tesla said.
The company said it has about 420,000 net reservations for the Model 3.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related Coverage
* Heard on the Street: Tesla's Big Number Doesn't Solve Its Problems
* Tesla's Chief Engineer Is Out After Taking Leave of Absence
* Tesla Reaches Goal of Making 5,000 Model 3s in Week
* Elon Musk Races to Exit Tesla's 'Production Hell'
* Electric Cars Pose Bond Market Conundrum
* Auto Makers in the U.S., Including Tesla and Ford, Brace for Additional Tariff From China
* Tesla Battery Ignited Twice After Fatal Florida Wreck, U.S. Investigators Say
* Start Your Engines: The Second Wave of Luxury Electric Cars
Credit: By Tim Higgins
Subject: Automobile industry
Location: Silicon Valley-California
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jul 2, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2062864074
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2062864074?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07- 03
Database: The Wall Street Journal
Tesla's Big Number Doesn't Solve Its Problems; Tesla hit its Model 3 production goal, but there are plenty of lingering questions for investors to worry about.
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 July 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla's production triumph
comes with some fine print.
The electric car maker announced it produced 5,031 Model 3 sedans
in the final week of the second quarter, hitting a closely watched milestone. The company shared photos of celebrating employees in its announcement filed with the Securities and Exchange Commission. Shares were up as much as 6% Monday but the euphoria quickly wore off and the stock was down about 2.1% at midday.
Tesla is clearly getting better at producing cars, but a look at the entire quarterly output should keep any celebration to a dull roar. Tesla produced about 28,500 Model 3s in the quarter, meaning nearly 18% were produced in the final frenzied week, only slightly lower than the last week of the previous two quarters.
The average for the quarter was about 2,200 cars per week. That means Tesla built on the gains made in the last week of the first quarter, when it produced 2,020 Model 3s. But the company said that nearly 40% of the total Model 3s produced in the most recent quarter have not yet been delivered to customers, a larger percentage than in previous quarters.
Tesla's sustainable production rate isn't the only topic investors ought to scrutinize. After all, the point of mass-producing Model 3s is to make a profit. Tesla added a new assembly line and worked around the clock to achieve its production goal, which can't be good for profit margins. Investors won't get a clear look at how the production scramble affected finances until Tesla reports financial results later this summer.
Perhaps most importantly, higher production figures will test how deep the pool of demand for Tesla's cars really is. The company said Monday it has 420,000 Model 3 reservations. At last week's production rate, that implies a backlog of about 18 months. But Tesla's website
says a Model 3 reservation placed today will be filled in approximately six to nine months. A month ago, the website said orders would be filled in up to 12 months.
"Demand is considered a given due to the reported backlog of the Model 3 orders. However, the actual size of this backlog is illusive at best, " says Daniel Ruiz, founder of Blinders Off Research.
It will take much more good news to justify Tesla's stratospheric valuation.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Automobile industry; Investments
Company / organization: Name: Securities & Exchange Commission; NAICS: 926150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jul 2, 2018
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2062878697
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2062878697?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-03
Database: The Wall Street Journal
Tesla's Engineering Chief Is Out After Taking Leave of Absence; Doug Field's departure is latest of several high-level executive exits in the last two years
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 July 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc.'s engineering chief won't return from his leave of absence, a person familiar with the situation said, as the auto maker heads into a pivotal period to prove it can sustain production of the Model 3 sedan.
Doug Field, who had been senior vice president of engineering, stepped away from his work
overseeing product development at the Silicon Valley auto maker in early May. At the time, a Tesla spokesman said, "Doug is just taking some time off to recharge and spend time with his family. He has not left Tesla."
People familiar with the move believed at the time he would return six weeks later, but he hadn't. His departure is one of several high-level executive exits over the past two years as Tesla has struggled to bring out the Model 3, which is priced lower than its other luxury vehicles as part of a plan to transform the company into a more mainstream auto maker.
Tesla on Monday said it met its long-delayed goal of building 5,000 Model 3 cars a week, and that it aims to increase the output to 6,000 a week
by late August.
Beyond ramping up Model 3 production, Tesla is racing to develop a slew of new products, including the Model Y compact sport-utility vehicle that Chief Executive Elon Musk has said he wants to unveil in March and begin production in the first half of 2020.
The auto maker confirmed the departure in a statement on Monday. "After almost five years at Tesla, Doug Field is moving on," the statement said. "We'd like to thank Doug for his hard work over the years and for everything he has done for Tesla."
Mr. Field couldn't be reached for comment.
A key leader at Tesla since joining in 2013 from Apple Inc., Mr. Field oversaw the engineering of the company's vehicles and last year was given oversight of production until Mr. Musk resumed that role last spring.
Mr. Field is credited for helping make the Model 3 easier to build by simplifying engineering complexity that plagued previous vehicles.
At least 50 vice presidents or higher-ranking executives have departed over the past 24 months, according to people familiar with the company, partly because of its acquisition of SolarCity Corp. Mr. Musk sees executive turnover as being in line with other large companies and has announced plans for a management reorganization aimed at flattening the layers of managers.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Tesla Sets New Model 3 Target of 6,000 a Week
* Analysis: Tesla's Big Number Doesn't Solve Its Problems
* Elon Musk Races to Exit Tesla's 'Production Hell'
Credit: By Tim Higgins
Subject: Automobile industry; Leaves of absence; Product recalls
Location: Silicon Valley-California
People: Musk, Elon
Company / organization: Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jul 2, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2062945550
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2062945550?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-03
Database: The Wall Street Journal
Business News: Tesla's Top Engineer Leaves --- Departure occurs as auto maker sets new production target for mass-market sedan
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 July 2018: B.3.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc.'s engineering chief won't return from his leave of absence, a person familiar with the situation said, as the auto maker heads into a pivotal period to prove it can sustain production of the Model 3 sedan.
Doug Field, who had been senior vice president of engineering, stepped away from his work overseeing product development at the Silicon Valley auto maker in early May. At the time, a Tesla spokesman said, "Doug is just taking some time off to recharge and spend time with his family. He has not left Tesla."
People familiar with the move believed at the time he would return six weeks later, but he hadn't.
In a statement on Monday, the company said: "After almost five years at Tesla, Doug Field is moving on. We'd like to thank Doug for his hard work over the years and for everything he has done for Tesla."
Mr. Field couldn't be reached for comment.
After reaching its long-delayed goal of building 5,000 Model 3 cars a week, Tesla said on Monday that it aims to increase the output to 6,000 a week by late August. The electric-vehicle maker has spent the past year struggling to meet production goals for the Model 3, twice missing the 5,000-a-week target for what is considered Tesla's first mass-market offering.
The auto maker on Monday also reaffirmed that it expects to have positive cash flow and post a profit in the third and fourth quarters. Keeping up the 5,000-a-week production pace is key to Tesla meeting its cash-flow forecast.
Beyond ramping up Model 3 production, Tesla is racing to develop new products, including the Model Y compact sport-utility vehicle that Mr. Musk has said he wants to unveil in March and begin production in the first half of 2020.
A key leader at Tesla since joining in 2013 from Apple Inc., Mr. Field oversaw the engineering of the company's vehicles and last year was given oversight of production until Chief Executive Elon Musk resumed that role last spring.
Mr. Field is credited for helping make the Model 3 easier to build by simplifying engineering complexity that plagued previous vehicles.
Mr. Field's departure is one of several by high-level executives over the past two years as Tesla has struggled to bring out the Model 3, which is priced lower than its other luxury vehicles as part of a plan to transform the company into a more mainstream auto maker.
At least 50 vice presidents or higher-ranking executives have departed over the past 24 months, according to people familiar with the company, partly because of its purchase of SolarCity Corp. Mr. Musk sees executive turnover as being in line with other large companies and has announced plans for a management reorganization aimed at flattening the layers of managers.
Credit: By Tim Higgins
Subject: Automobile industry; Engineering; Product development; Executives; Vehicles
Location: Silicon Valley-California
People: Musk, Elon
Company / organization: Name: SolarCity Corp; NAICS: 221114, 238220, 333414; Name: Tesla Inc; NAICS: 336999; Name: Apple Inc; NAICS: 334111, 334220, 511210
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2018
Publication date: Jul 3, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2063159301
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2063159301?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-03
Database: The Wall Street Journal
Tesla Buyers in China Are Early Casualties in Trade Wrestle; Price listings on the Silicon Valley car maker's Chinese website increased by nearly 20% this weekend
Author: Moss, Trefor
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 July 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: SHANGHAI--Tesla buyers in China will be among the first consumers to feel the pinch from the U.S.-China trade dispute
.
Price listings on Tesla's Chinese website increased by nearly 20% this weekend. It came after the U.S. and China on Friday imposed tit-for-tat tariffs
on $34 billion of each other's goods, which affected U.S.-built cars exported to China
including Teslas.
The Silicon Valley electric-car maker had briefly cut prices by about 6% after the Chinese government
reduced its tariffs
on imported cars to 15% from 25% on July 1.
But that cut proved short lived. The measures imposed Friday raised the tariff on Tesla to 40%.
A basic Model S sedan now costs roughly $128,400, up from $107,300 last week, while a Model X sport-utility vehicle costs $140,100, compared with $117,100.
A Tesla dealer in Beijing said there were still some cars in stock with lower price tags that were delivered before the new tariffs were imposed, but that inventory was very low.
Tesla plans to build a plant
in Shanghai to serve the local market, but for now it only produces vehicles in the U.S. Last year, it sold about 17,000 cars in China, its second-biggest market globally, generating more than $2 billion in revenue.
Unlike most auto makers, Tesla sells its cars through company-owned stores instead of franchised dealerships, allowing it to set prices. It has 30 stores in China, according to its website.
The tariffs the U.S. and China imposed on each other present companies with a dilemma: Risk a loss by absorbing the cost or risk market share by passing it on to consumers. Beijing has been looking for ways to shield its companies and consumers, for example by trying to direct purchases of soybeans to Brazil and other suppliers.
China's Commerce Ministry said Monday it would use the added revenue from the increased tariffs to provide relief for affected companies and workers. Also Monday, the executive office of the State Council, China's cabinet, issued a notice Monday calling for an increase in imports while stabilizing exports to promote more balanced trade, the state-run Xinhua News Agency reported.
Tesla isn't the only auto maker that builds in the U.S. and ships to China: BMW AG, Daimler AG and Ford Motor Co. all sell U.S. imports in significant volume here.
Last week, Ford said it has no current plans to raise retail prices on its China imports in response to the tariff hike. Ford sold roughly 65,000 imported Lincoln vehicles in China last year, as well as nearly 19,000 Fords. Locally produced cars comprised more than 90% of its sales.
Daimler said it didn't plan to pass the entire cost of the tariff rise onto its customers.
Sales of high-end imports such as Tesla's are unlikely to be hit severely by the price increase, according to analysts, since buyers of luxury cars tend not to be price-conscious.
But the pain will spread if the trade war continues, a saleswoman at an import-export company based in Shandong province predicted.
The company imports U.S. auto parts that are subject to the new tariffs, which means higher prices for its Chinese buyers. They are negotiating with American suppliers on how to divide the higher costs, she said, but they will most likely be absorbed by her company, the saleswoman said.
"In the short term, our vendors are still talking and discussing prices," she said. "But in the long term, I think it will definitely have an impact on our business."
Chunying Zhang and Shan Li contributed to this article.
Write to Trefor Moss at Trefor.Moss@wsj.com
Credit: By Trefor Moss
Subject: Automobile industry; Tariffs; Vehicles
Location: China Silicon Valley-California Beijing China United States--US
Company / organization: Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Daimler AG; NAICS: 336111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jul 9, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2066369588
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2066369588?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-10
Database: The Wall Street Journal
Tesla Lifts Prices in China
Author: Moss, Trefor
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 July 2018: B.4.
ProQuest document link
Abstract: None available.
Full text: SHANGHAI -- Tesla buyers in China are among the first consumers to feel the pinch from the U.S.-China trade dispute.
Price listings on Tesla Inc.'s Chinese website increased by nearly 20% over the weekend. It came after the U.S. and China on Friday imposed tit-for-tat tariffs on $34 billion of each other's goods, which affected U.S.-built cars exported to China including Teslas.
The Silicon Valley electric-car maker had cut prices by about 6% after the Chinese government reduced its tariffs on imported cars to 15% from 25% on July 1. But that cut proved short-lived. The measures imposed Friday raised the tariff on Tesla to 40%.
A basic Model S sedan now costs roughly $128,400, up from $107,300 last week, while the price of a Model X sport-utility vehicle rose to $140,100 from $117,100.
A Tesla dealer in Beijing said there were still some cars in stock with lower price tags that were delivered before the new tariffs were imposed, but that inventory was very low.
Tesla plans to build a plant in Shanghai, but for now it produces vehicles only in the U.S. Last year, it sold about 17,000 cars in China, its second-biggest market globally, generating more than $2 billion in revenue.
Unlike most auto makers, Tesla sells its cars through company-owned stores instead of franchised dealerships, allowing it to set prices. It has 30 stores in China, according to its website.
The tariffs the U.S. and China imposed on each other present companies with a dilemma: Risk a loss by absorbing the cost or risk market share by passing the tariff increase on to consumers. Beijing has looked for ways to shield its companies and consumers, for example by trying to direct purchases of soybeans to Brazil and other suppliers.
China's Commerce Ministry said Monday it would use the added revenue from the increased tariffs to provide relief for companies and workers. Also Monday, the executive office of the State Council, China's cabinet, issued a notice calling for an increase in imports while stabilizing exports to promote more balanced trade, the state-run Xinhua News Agency reported.
Tesla isn't the only auto maker that builds in the U.S. and ships to China: BMW AG, Daimler AG and Ford Motor Co. all sell U.S. imports in significant volume here.
Last week, Ford said it has no current plans to raise retail prices on its China imports in response to the tariff hike.
Daimler said it didn't plan to pass the entire cost of the tariff rise onto its customers.
---
Chunying Zhang and Shan Li contributed to this article.
Credit: By Trefor Moss
Subject: Automobile industry; International trade; Tariffs; Prices
Location: Silicon Valley-California Beijing China United States--US China Brazil
Company / organization: Name: Xinhua News Agency; NAICS: 519110; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Tesla Inc; NAICS: 336999; Name: Daimler AG; NAICS: 336111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2018
Publication date: Jul 10, 2018
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2066964077
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2066964077?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-10
Database: The Wall Street Journal
Tesla to Build Auto Factory in Shanghai; The electric-car maker will set up and own a plant that is expected to produce 500,000 vehicles a year
Author: Moss, Trefor; Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 July 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: SHANGHAI--Tesla Inc. will build a factory in Shanghai, the city government said Tuesday, a move expected to boost sales in the world's largest auto market but that comes as U.S. companies face pressure to keep jobs at home.
The electric-car maker will set up and own the plant that is expected to produce 500,000 vehicles a year sometime next decade, the Shanghai authorities said. Tesla Chief Executive Elon Musk was in Shanghai to sign the agreement, authorities said.
Tesla is doing something that no foreign auto maker has done before: build a factory and a network of suppliers in China without the support of a local joint venture partner. Also, the current U.S.-China trade dispute poses a risk to Tesla if the issues should create consumer backlash against American products.
Even so, China offers opportunities for growth--especially with electric vehicles--and building its own plant allows Tesla to keep all the revenue it generates, instead of having to share it with a Chinese partner, said James Chao, Asia-Pacific automotive director at IHS Markit.
"They'll be able to control the process far more tightly than a [joint] operation.," Mr. Chao said. "It frees them to build this the way they want to."
Mr. Musk has been under pressure for the past year to ramp up production of the more mainstream Model 3 while trying to manage the company's costs. Tesla recently hit a key production goal, but analysts have said the company likely will need to raise additional money, especially as it looks to expand, such as in China.
China is already Tesla's second-biggest market after the U.S. The auto maker sold about 17,000 cars there last year, compared with roughly 50,000 in the U.S. and 103,000 globally.
In China, sales of electric vehicles are rising quickly, boosted by government policy. Chinese customers are projected to buy 3.5 million electric passenger cars in 2022, IHS Markit forecasts, up from 580,000 last year.
The Wall Street Journal reported
last October that Tesla had reached an agreement with the Shanghai authorities to build a wholly owned plant in the city, but formal confirmation of the deal was slow to come.
Beijing finally confirmed plans in April
to phase out rules that have forced all traditional foreign makers, including Ford Motor Co. and General Motors Co., to manufacture cars with Chinese partners to avoid paying steep import tariffs.
Electronic vehicle makers are the first to benefit from the new government policy, paving the way for Tesla to move ahead this year. Foreign-investment restrictions on commercial vehicle makers will be lifted by 2020, and on all remaining auto makers by 2022. It remains to be seen whether auto makers with longstanding partnerships in China will attempt to emulate Tesla, given the complexity of dissolving joint ventures that have existed in some cases for more than two decades.
A Tesla spokesman said it would take about two years until the factory begins producing vehicles, and another two to three years before the facility is hitting its annual capacity of 500,000 vehicles. "Today's announcement will not impact our U.S. manufacturing operations, which continue to grow," the spokesman said in a statement.
That is an aggressive timeline that sets up 2020 to be a major year for Tesla. Mr. Musk has already said he plans that year to begin production of the Model Y, a new compact sport-utility vehicle, as well as the new Roadster sports car and Semi, a tractor-trailer truck.
Tesla does have at least one local ally, with internet giant Tencent Holdings Ltd. having spent $1.7 billion on a 5% stake
in the electronic-vehicle maker last year, and raising local capital to help build the Shanghai plant shouldn't be a problem.
"If there were an opportunity for Chinese investors to go into Tesla, they'd do it in a heartbeat," Mr. Chao said.
Imported Teslas just got more expensive in China after Beijing slapped a 40% tariff on cars imported from the U.S. last week in retaliation for new tariffs imposed by Washington.
Over the weekend, Tesla's Chinese website increased by nearly 20% the price listings. A basic Model S sedan now costs about $128,400 from $107,300. Tesla employs about 1,500 people in China.
Total world-wide, the auto maker has about 40,000 employees with one assembly plant outside of San Francisco in Fremont, Calif., that aims to make 100,000 Model S sedan and Model X sport-utility vehicles this year plus as many Model 3s as it can. Tesla makes batteries at a factory outside of Reno, Nev.
President Donald Trump has put pressure on American manufacturers to invest in domestic production rather than build plants in places like China or Mexico. Last month, Mr. Trump publicly berated
motorcycle company Harley-Davidson Inc. over plans to shift some production from Kansas to Thailand. Tesla, though, has no plans to move any production out of the U.S.
Mr. Musk appealed directly to Mr. Trump
via Twitter back in March for help persuading China to reduce its then-25% tariff on auto imports, which he described as a handicap akin to "competing in an Olympic race wearing lead shoes." China then granted Mr. Musk's wish, lowering its tariff on autos to 15%, until Mr. Trump's decision to place tariffs on Chinese goods, inducing Beijing to increase its own tariff on U.S. cars on July 6.
Chunying Zhang contributed to this article.
Write to Trefor Moss at Trefor.Moss@wsj.com and Tim Higgins at Tim.Higgins@WSJ.com
Read More
* What the Tariff Battle Means for Auto Plants in South Carolina
* Tesla Buyers in China Are Early Casualties in Trade Wrestle
(July 9)
* China to Ease Rules on Foreign Auto Makers
(April 17)
* Tesla's Elon Musk Tells Trump China Trade Rules 'Make Things Very Difficult'
(March 8)
* Tesla Strikes Deal With Shanghai to Build Factory in China
(Oct. 22, 2017)
* Tesla Gets Backing of Chinese Internet Giant Tencent
(March 29, 2017)
Credit: By Trefor Moss and Tim Higgins
Subject: Automobile industry; Tariffs; Electric vehicles; Manufacturers
Location: Thailand Beijing China Mexico United States--US Kansas China Asia
People: Trump, Donald J Musk, Elon Ying Yong
Company / organization: Name: American Chamber of Commerce; NAICS: 813910; Name: Twitter Inc; NAICS: 519130; Name: Tencent Holdings Ltd; NAICS: 517210; Name: Harley-Davidson Inc; NAICS: 336111, 336213 , 336214, 336991; Name: Wall Street Journal; NAICS: 511110; Name: Tesla Inc; NAICS: 336999; Name: IHS Markit; NAICS: 511210, 519130, 541512, 541910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jul 10, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2067139469
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2067139469?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-12
Database: The Wall Street Journal
Tesla Set to Amp Up Operations in China
Author: Moss, Trefor; Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 July 2018: B.1.
ProQuest document link
Abstract: None available.
Full text: SHANGHAI -- Tesla Inc. will build a factory in Shanghai, the city government said Tuesday, a move likely to boost its sales in the world's largest auto market but coming as U.S. companies face pressure to keep jobs at home.
The electric-car maker will set up and own the plant that is expected to produce 500,000 vehicles annually sometime in the next decade, the Shanghai authorities said. Tesla Chief Executive Elon Musk was in Shanghai to sign the agreement, they said.
Tesla is doing something that no foreign auto maker has done before: build a factory and a network of suppliers in China without the support of a local joint-venture partner. Also, the current U.S.-China trade dispute poses a risk to Tesla if tensions fuel a consumer backlash against American products.
Even so, China offers opportunities for growth, especially with electric vehicles, and building its own plant allows Tesla to keep all the revenue it generates, instead of having to share it with a Chinese partner, said James Chao, Asia-Pacific automotive director at IHS Markit.
"They'll be able to control the process far more tightly than a [joint] operation," Mr. Chao said. "It frees them to build this the way they want to."
Mr. Musk has been under pressure for the past year to ramp up production of the brand's more-mainstream Model 3 while trying to manage the company's costs. Tesla recently hit a key production goal, but analysts have said it likely will need to raise additional money, especially for expansion, such as in China.
China is already Tesla's second-biggest market after the U.S. The auto maker sold about 17,000 cars there last year, compared with roughly 50,000 in the U.S. and 103,000 globally.
In China, sales of electric vehicles are rising quickly. Chinese customers are projected to buy 3.5 million electric passenger cars in 2022, IHS Markit forecasts, up from 580,000 last year.
The Wall Street Journal reported last October that Tesla had reached an agreement with the Shanghai authorities to build a wholly owned plant in the city, but formal confirmation was slow to come.
Beijing confirmed plans in April to phase out rules that have forced most foreign auto makers, including Ford Motor Co. and General Motors Co., to take on local manufacturing partners to avoid paying steep import tariffs.
Electronic-vehicle makers are the first to benefit from the more-liberal government policy, paving the way for Tesla to move ahead this year. Foreign-investment restrictions on commercial vehicle makers will be lifted by 2020, and on all remaining auto makers by 2022.
A Tesla spokesman said it would take about two years until the Shanghai factory begins producing vehicles, and another two to three years for the facility to hit its annual capacity of 500,000 vehicles. "Today's announcement will not impact our U.S. manufacturing operations, which continue to grow," the spokesman said in a statement.
That is an aggressive timeline, setting up 2020 as a major year for Tesla. Mr. Musk has already said he plans that year to begin production of the Model Y, a new compact sport-utility vehicle, as well as the new Roadster sports car and Semi, a tractor-trailer truck.
Tesla does have at least one local ally in internet giant Tencent Holdings Ltd., which spent $1.7 billion on a 5% stake in the electric-vehicle maker last year, and raising local capital to help build the Shanghai plant shouldn't be a problem.
---
Chunying Zhang contributed to this article.
Credit: By Trefor Moss and Tim Higgins
Subject: Automobile industry; Electric vehicles
Location: China Beijing China United States--US Asia
People: Musk, Elon
Company / organization: Name: Tencent Holdings Ltd; NAICS: 517210; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Wall Street Journal; NAICS: 511110; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999; Name: IHS Markit; NAICS: 511210, 519130, 541512, 541910
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2018
Publication date: Jul 11, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2067593286
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/20675 93286?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-12
Database: The Wall Street Journal
Tesla's Musk Needs to Find His Mary Barra; Spread thin, Elon Musk needs a strong leader to carry out his wundercar vision
Author: Stoll, John D
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 July 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: I'm not going to win any popularity contests criticizing Elon Musk's recent efforts to aid the rescue of a dozen young soccer players in Thailand. Like a real-life Tony Stark, the entrepreneur and father of five boys commissioned engineers to work up a kiddie submarine and then delivered it to Tham Luang cave where the boys were trapped
.
In the end, the boys didn't need the Musk MiniSub. And back at his own business empire, Mr. Musk is spread alarmingly thin.
His electric car company, Tesla Inc., is at a critical intersection, losing key people at a time when Mr. Musk is attempting to perfect the mass production of its Model 3. The car could save Tesla, or trigger its demise. Mr. Musk has piled on debt as he struggled with production, and unless those wundercars start reliably rolling off the assembly line soon, the company could find itself unable to pay down debt or keep pace with the luxury cars brands finally launching competing models.
With obligations mounting, Mr. Musk makes it a habit of sleeping
at Tesla's factories so he can constantly monitor progress or put out fires. It's time for Mr. Musk to take an even bolder step.
America's great entrepreneurs have a tradition of hiring strong operating executives to help realize their vision. It's what Google Inc. did in hiring Eric Schmidt, or Facebook Inc. did with Sheryl Sandberg. Mr. Musk himself long ago handed day-to-day control of his SpaceX rocket venture to Gwynn Shotwell, an industry veteran who eventually became president and chief operating officer.
Tesla needs someone with experience managing a big industrial company through crisis and preparing it for dramatic change. He needs someone who knows cars. The best candidate is someone who recently told a group of Wharton M.B.A. students: "Sometimes the most urgent is not always the most important."
That was Mary Barra, chief executive of General Motors Co. Starting at the company in 1980 as a co-op student at the now-defunct Pontiac division, she spent nearly four decades climbing the ladder at GM by being as humble as she is focused. She's managed factories, overseen human resources and headed product development.
America got to know her during congressional hearings in 2014, when as a newly minted CEO she took intense heat for an ignition-switch safety crisis that dated back to decisions made several years and several chief executives before her administration. She's since made several tough moves to shrink GM's sprawling footprint, including pulling the plug on a European business mired in red ink.
One of her more recent ventures, the 2016 acquisition of Silicon Valley driverless car company Cruise Automation, now looks very smart. Recent valuations suggest the unit is now worth $11.5 billion, according to RBC Capital Markets. The firm forecasts that number growing to $43 billion when it is fully integrated into GM's mass-market electric car fleet.
Mary Barra's name showing up on a Tesla business card is a far-fetched idea. But shoring up Tesla would represent an opportunity for Ms. Barra to cement her legacy in a car business that she believes will change more in the next five years than it has in the past 50.
Tesla, meanwhile, has people jumping off the boat at an abnormally high rate. The recent departure of the company's well-regarded engineering chief, Doug Field, is part of a broader exodus
that has claimed at least 50 vice presidents or higher-ranking executives over the past 24 months.
"Elon has created enormous value," investor John Anderson told me Wednesday. "But he does need more bench strength."
Mr. Anderson oversees sizable Tesla holdings at investment manager Baillie Gifford. An admirer of Mr. Musk with no plans to sell, Mr. Anderson said "this is about execution and whether you've got enough people to get the execution right."
Mr. Musk has little love for veterans of GM. The company has been the leading adversary of Mr. Musk in the fight against Tesla's efforts to sell directly to customers without the use of the independent dealers that are legally mandated for auto makers.
Ms. Barra, meanwhile, has shown no interest in leaving her post. A spokesman said Ms. Barra is committed to GM and "transforming the company."
For Ms. Barra, one of America's marquee CEOs, going to work for Mr. Musk could be considered a step down. But it would also be a step forward. The type of disruption the staid car business needs is woven through Tesla's DNA. It just needs someone to help steer it in the right direction.
Write to John D. Stoll at john.stoll@wsj.com
Credit: By John D. Stoll
Subject: Automobile industry; Chief executive officers
Location: Silicon Valley-California Thailand
People: Barra, Mary Sandberg, Sheryl Musk, Elon
Company / organization: Name: RBC Capital Markets; NAICS: 523110; Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Facebook Inc; NAICS: 518210, 519130; Name: Google Inc; NAICS: 334310, 519130; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jul 13, 2018
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2068987435
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2068987435?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-08-02
Database: The Wall Street Journal
EXCHANGE --- Strategy -- Full Disclosure: Tesla's Elon Musk Needs To Find His Co-Pilot
Author: Stoll, John D
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 July 2018: B.5.
ProQuest document link
Abstract: None available.
Full text: I'm not going to win any popularity contests criticizing Elon Musk's recent efforts to aid the rescue of a dozen young soccer players in Thailand. Like a real-life Tony Stark, the entrepreneur and father of five boys commissioned a kiddie submarine and then delivered it to Tham Luang cave where the boys were trapped.
In the end, the boys didn't need the Musk MiniSub. And back at his own business empire, Mr. Musk is spread alarmingly thin.
Tesla Inc. is at a critical intersection, losing key people as Mr. Musk is attempting to perfect the mass production of its Model 3. Unless those wundercars start rolling off the assembly line soon, the company could find itself unable to keep up with luxury car brands launching competing models.
With obligations mounting, Mr. Musk makes it a habit of sleeping at Tesla's factories so he can constantly monitor progress or put out fires. It's time for Mr. Musk to take an even bolder step.
America's great entrepreneurs have a tradition of hiring strong operating executives to help realize their vision. It's what Google Inc. did in hiring Eric Schmidt, or Facebook Inc. did with Sheryl Sandberg. Mr. Musk himself long ago handed day-to-day control of his SpaceX rocket venture to Gwynn Shotwell, an industry veteran who eventually became president and chief operating officer.
Tesla needs someone with experience managing a big industrial company through crisis and preparing it for dramatic change. He needs someone who knows cars. The best candidate is someone who recently told a group of Wharton M.B.A. students: "Sometimes the most urgent is not always the most important."
That was Mary Barra, chief executive of General Motors Co. Starting at the company in 1980 as a co-op student at the now-defunct Pontiac division, she spent nearly four decades climbing the ladder at GM by being as humble as she is focused. She's managed factories, overseen human resources and headed product development.
America got to know her during congressional hearings in 2014, when as a newly minted CEO she took intense heat for an ignition-switch safety crisis that dated back to decisions made several years before her administration. She's since taken tough steps to shrink GM's sprawling footprint.
One of her more recent ventures, the 2016 acquisition of Silicon Valley driverless car company Cruise Automation, now looks very smart. Recent valuations suggest the unit is now worth $11.5 billion, according to RBC Capital Markets.
Mary Barra's name showing up on a Tesla business card is a far-fetched idea. But shoring up Tesla would represent an opportunity for Ms. Barra to cement her legacy in a car business that she believes will change more in the next five years than it has in the past 50.
Tesla, meanwhile, has people jumping off the boat at an abnormally high rate. The recent departure of the company's well-regarded engineering chief, Doug Field, is part of a broader exodus that has claimed at least 50 vice presidents or higher-ranking executives over the past 24 months.
"Elon has created enormous value," investor John Anderson told me Wednesday. "But he does need more bench strength."
Mr. Anderson oversees sizable Tesla holdings at investment manager Baillie Gifford. An admirer of Mr. Musk with no plans to sell, he said "this is about execution and whether you've got enough people to get the execution right."
Mr. Musk has little love for veterans of GM. The company has been the leading adversary of Mr. Musk in the fight against Tesla's efforts to sell directly to customers without the use of the independent dealers that are legally mandated for auto makers.
Ms. Barra has shown no interest in leaving her post. A spokesman said she is committed to GM and "transforming the company." For one of America's marquee CEOs, going to work for Mr. Musk could be considered a step down. But it would also be a step forward. The disruption the car business needs is woven through Tesla's DNA. It just needs someone to help steer it in the right direction.
Credit: By John D. Stoll
Subject: Automobile industry
Location: Thailand Silicon Valley-California
People: Barra, Mary Sandberg, Sheryl Musk, Elon
Company / organization: Name: RBC Capital Markets; NAICS: 523110; Name: Space Exploration Technologies Corp; NAICS: 336414; Name: Facebook Inc; NAICS: 518210, 519130; Name: Google Inc; NAICS: 334310, 519130; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; Ne w York, N.Y.
Pages: B.5
Publication year: 2018
Publication date: Jul 14, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2069313155
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2069313155?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduc ed with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-14
Database: The Wall Street Journal
Business News: Tesla's Elon Musk Lashes Out At Rescuer in Twitter Rant
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 July 2018: B.3.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. Chief Executive Elon Musk for years has used Twitter to combat critics in ways that few other business leaders would dare. His latest outburst on the platform, though, was extreme even by his standards.
Mr. Musk took offense at comments from a British cave explorer who dismissed the billionaire entrepreneur's efforts to rescue the youth soccer team trapped in a Thailand cave as an ill-informed public-relations stunt. He suggested the critic, Vern Unsworth, was a pedophile in a tweet Sunday.
"Sorry pedo guy, you really did ask for it," read a post on Mr. Musk's official Twitter account early Sunday in response to the explorer's criticism. The post quickly drew condemnation, eliciting a follow-up from Mr. Musk to someone who challenged the statement, which read: "Bet ya a signed dollar it's true."
Those posts were deleted later Sunday. A spokesman for Tesla didn't respond to a request for comment. Mr. Unsworth couldn't be reached for comment Monday in Thailand, but he told Australian television that the dispute wasn't finished.
Tesla shares fell 2.8% Monday to $310.10.
It was the latest example of Mr. Musk's aggressive and sometimes controversial use of Twitter. In recent months, he has used the platform to criticize regulators, taunt short sellers and debate people who criticized his political donations.
Mr. Musk's seemingly unfiltered use of the platform is unusual among major CEOs, whose public remarks are generally carefully controlled. The messages are part of a pattern of defiance that has won Mr. Musk many fans and gained him more than 22 million followers on Twitter.
Mr. Musk's involvement with the Thai cave drama began on Twitter, when he responded on July 4 to a user asking him to assist in the rescue. He later posted videos of tests in California of a metal tube that his team fashioned into a mini-sub to carry the Thai boys out of the flooded cave.
Meanwhile, Thai authorities successfully rescued all 12 boys and their coach without Mr. Musk's device.
Mr. Musk stopped off to visit the cave on a trip to China and said he was leaving the sub in case it could be useful in the future.
Credit: By Tim Higgins
Subject: Social networks
Location: Thailand China California
People: Musk, Elon
Company / organization: Name: Twitter Inc; NAICS: 519130; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2018
Publication date: Jul 17, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2070694274
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2070694274?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-17
Database: The Wall Street Journal
Elon Musk Apologizes for Calling Thai Cave Rescuer a Pedophile; British explorer Vern Unsworth says the Tesla founder's effort to help in the cave rescue was a PR stunt
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 July 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. Chief Executive Elon Musk has apologized for lashing out at the British cave explorer
who dismissed his efforts to help rescue the youth soccer team trapped in a Thai cave.
"His actions against me do not justify my actions against him, and for that I apologize to Mr. Unsworth and to the companies I represent as leader," Mr. Musk said in a post on his official Twitter account at 11:41 p.m. Tuesday in California, referring to cave explorer Vern Unsworth. "The fault is mine and mine alone."
Mr. Musk had come under increasing pressure following his Sunday broadside, with calls for the CEO to apologize. "Your behavior is fueling an unhelpful perception of your leadership--thin-skinned and short-tempered," Gene Munster, managing partner at venture-capital firm Loup Ventures, wrote in an open letter Tuesday. Mr. Munster recommended an apology and Twitter sabbatical.
The tech billionaire had taken offense at comments from Mr. Unsworth, who in a video posted by CNN late last week called Mr. Musk's mini-submarine, built to help rescue the soccer team, an ill-informed public-relations stunt, saying it "had absolutely no chance of working" because it was too big for the cave. "He can stick his submarine where it hurts," Mr. Unsworth said.
"Sorry pedo guy, you really did ask for it," read a tweet on Mr. Musk's Twitter account Sunday in response to the explorer's criticism. The posting, which was later deleted, sent Tesla's stock falling Monday.
The outburst was the latest example of Mr. Musk's aggressive and sometimes controversial use of Twitter
. In recent months, he has used the platform to criticize regulators, taunt short sellers and debate people who criticized his political donations.
Mr. Musk's involvement with the Thai cave drama
began on Twitter, when he responded on July 4 to a user asking him to assist in the rescue. He later posted videos of swimming-pool tests in California of a metal tube that his team fashioned to carry the Thai boys out of the flooded cave.
Thai authorities successfully rescued all 12 boys and their coach
last week without Mr. Musk's device.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Social networks
Location: California
People: Musk, Elon
Company / organization: Name: CNN; NAICS: 515210; Name: Twitter Inc; NAICS: 519130; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jul 18, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2071102252
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2071102252?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-19
Database: The Wall Street Journal
Tesla CEO Apologizes
Author: a WSJ Staff Reporter
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]19 July 2018: B.4.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. Chief Executive Elon Musk apologized for lashing out at the British cave explorer who dismissed his efforts to help rescue the youth soccer team trapped in a Thai cave.
"His actions against me do not justify my actions against him, and for that I apologize to Mr. Unsworth and to the companies I represent as leader," Mr. Musk said in a post on his official Twitter account Tuesday, referring to cave explorer Vern Unsworth. "The fault is mine and mine alone."
Mr. Musk had come under increasing pressure following his Sunday broadside, with calls for the CEO to apologize. "Your behavior is fueling an unhelpful perception of your leadership -- thin-skinned and short-tempered," Gene Munster, managing partner at a venture-capital firm Loup Ventures, wrote in an open letter Tuesday. Mr. Munster recommended an apology and Twitter sabbatical.
The tech billionaire had taken offense at comments from Mr. Unsworth, who in a video posted by CNN late last week called Mr. Musk's mini-submarine, built to help rescue the soccer team, an ill-informed public-relations stunt, saying it "had absolutely no chance of working" because it was too big for the cave.
"Sorry pedo guy, you really did ask for it," read a tweet on Mr. Musk's Twitter account Sunday in response. The posting, which was deleted, sent Tesla's stock falling Monday.
Credit: By a WSJ Staff Reporter
Subject: Social networks
People: Musk, Elon
Company / organization: Name: CNN; NAICS: 515210; Name: Twitter Inc; NAICS: 519130; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2018
Publication date: Jul 19, 2018
Section: Technology
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2071449134
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2071449134?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-19
Database: The Wall Street Journal
First Test Drive of the Tesla Model 3 Performance: A Thrilling, Modern Marvel; The Tesla brand has its share of haters, but no one has yet driven the new Model 3 Performance--until now. Dan Neil takes a first turn behind the wheel of the dual-motor dynamo
Author: Neil, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 July 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: ENTER, STAGE LEFT, humming: I have borrowed a new 2018 Tesla Model 3 Performance ($78,000, as tested) from the factory in Fremont, Calif., and I'm now quietly tearing the hide off this switchback road in the grass-gold hills near Silicon Valley. This is the first test drive of the hotrod Tesla. In the Performance version, two motors north and south equal 335 kW (450 hp) and digitally mastered all-wheel drive, with corner-exiting acceleration that will leave average BMW M4s with a soft auf Wiedersehen.
And this is guilt-free hooning since I'll recover, going downhill, most energy expended going up. Give her the spurs, Moon Flower.
The Model 3's uncanny stability while cornering is mostly the product of its lithium-battery keel; but Tesla didn't skimp on the suspension bits: upper and lower A arms (aluminum and steel) with virtual steer axis geometry, twin-tube coilovers and anti-roll bar in front; in the rear, a multi-link geometry, also with twin-tube shocks and anti-roll bar. For now the hottest tires available are the Michelin Pilot Sport 4S, which are nice all-rounders but not particularly grippy. My message to the engineers: more tire.
I'm no financial analyst, but I do know cars. If you were hoping Tesla would fail on account of the Model 3 I've got bad news: This thing is magnificent, a little rainbow-farting space ship, so obviously representative of the next step in the history of autos. I know there are a lot of Tesla bears, haters and cynics out there. Tesla boss Elon Musk makes it easy. But in the spirit of charity I think we can all agree many brilliant people are putzes.
The Model 3 is more than futuristic. It's optimistic. This is what ordinary cars should be, which is to say, better than they are.
Sure, Tesla has issues. I say this as a veteran of many plant tours: The factory in Fremont is a dimly lit, vertically integrated madhouse. The place is the Kobe beef of lean production, with subassemblies and panels stacked to the rafters. About 30 percent of the Model 3's robotic assemblers are hanging from above, to increase what one engineer called "manufacturing density." Jeez. Keep your arms and legs inside the ride at all times.
But the car is a star. Doubters will have to bring it. Show me another car with an all-glass roof and five-star rollover crash rating. Point out another $80,000 sedan that out-clouds a Rolls-Royce, out-punches a Porsche Boxster and gets an electric equivalent of 116 mpg. You can't, unless you're building something in your garage we don't know about.
So now you are sitting in a tester with all the trimmings, including the ermine-white leather-like upholstery ($1,500) that is apparently in limited supply. The Model 3's dash incorporates a blade-like vent across its width, sandwiched between layers of stitched upholstery and laminated wood. Occupants can move focused airflow up, down and around, using the graphical compass available on the 15-inch high-resolution touch screen. When was the last time a car blew your mind with its climate vents?
Alas, the Model 3's minimalist interior is rudely interrupted by the aforementioned touch screen, a big tablet suspended on a pylon in the middle of the dash. This is the broken flower pot on Mona Lisa's head. Also, the Model 3's A pillars are too thick, blocking the very best views of my next overcooked hairpin.
The center tablet hosts the car's navigation, audio, connectivity and Autopilot avionics, including graphical readouts from complex sensor array. Autopilot functions like distance-keeping are accessed with the unmarked compass selectors in the steering wheel. But I am having way too much fun to use Autopilot.
Build quality: Beta-phase Model 3s had pretty awful panel-gap tolerances--even the show car at the 2017 Los Angeles Auto Show. Why? The stampings of the deep-draft aluminum body panels were "moving" after they were stamped, explained a production engineer. That's not unusual. Such tool-fettling occurs with almost any aluminum-paneled car project; the difference is, Tesla made all these adjustments under the blazing lights of investors and speculators.
But the cars I've driven are very straight, with uniform panel gaps. The wind noise around the windows that some early testers had noted was nowhere to be heard. Looks like the robots got the memo.
The Model 3 also debuts Tesla's more powerful battery packs, produced in its vast battery-making automaton outside of Reno, Nev., known as the Gigafactory. Inside these packs, the new 2170 cells are roughly 50% larger by volume than Tesla's earlier cells and more energy rich. Mr. Musk has called the new cell "the highest energy density cell in the world."
Tesla doesn't provide battery capacity figures but the Model 3 Performance pack is estimated to be worth about 75 kWh, good for an EPA-estimated 310 miles of range.
The battery pack sort of resembles a watch battery: wafer thin, with minimal intrusion into interior cabin space above. Lower floor, lower roof. The Model 3 also sports a minimal front overhang, low hood, cab-rearward proportions and a luxurious axle-to-dash ratio. Like the Model S, the Model 3 provides a trunk and a generous frunk.
Exit, stage right, still humming.
Write to Dan Neil at Dan.Neil@wsj.com
2018 MODEL 3 PERFORMANCE
* Base Price $64,000
* Price, as Tested $78,000
* Powertrain: three-phase, four-pole induction motor (front), permanent magnet motor (rear) and all-wheel drive; drive inverter with regenerative braking; 75 kWh (est.) lithium battery and onboard charger.
* EPA Range 310 miles
* Recharge Time 170 miles of range per 30 minutes (supercharger)
* 0-60 mph 3.5 seconds
* Top Speed 155 mph
* Curb Weight 4,072 pounds
* EPA Fuel Economy 116 MPG-e
* Cargo Capacity 15 cubic feet
Credit: By Dan Neil
Subject: Aluminum; Automobile industry; Upholstery; Product design; Interactive computer systems; Engineers
Location: Silicon Valley-California Los Angeles California
People: Musk, Elon
Company / organization: Name: Environmental Protection Agency--EPA; NAICS: 924110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jul 19, 2018
column: Rumble Seat
Section: Life
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2071697318
Document URL: https://login.ezproxy.uta.edu/login?url=https://sear ch.proquest.com/docview/2071697318?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-21
Database: The Wall Street Journal
OFF DUTY --- Gear & Gadgets -- Rumble Seat -- Tesla Model 3 Performance: Two Motors, Twice the Fun
Author: Neil, Dan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]21 July 2018: D.10.
ProQuest document link
Abstract: None available.
Full text: Enter, stage left, humming: I have borrowed a new 2018 Tesla Model 3 Performance ($78,000, as tested) from the factory in Fremont, Calif., and I'm now quietly tearing the hide off this switchback road in the grass-gold hills near Silicon Valley. This is the first test drive of the hotrod Tesla. In the Performance version, two motors north and south equal 335 kW (450 hp) and digitally mastered all-wheel drive, with corner-exiting acceleration that will leave average BMW M4s with a soft auf Wiedersehen.
And this is guilt-free hooning since I'll recover, going downhill, most energy expended going up. Give her the spurs, Moon Flower.
The Model 3's uncanny stability while cornering is mostly the product of its lithium-battery keel; but Tesla didn't skimp on the suspension bits: upper and lower A arms (aluminum and steel) with virtual steer axis geometry, twin-tube coilovers and anti-roll bar in front; in the rear, a multi-link geometry, also with twin-tube shocks and anti-roll bar. For now the hottest tires available are the Michelin Pilot Sport 4S, which are nice all-rounders but not very grippy. My message to the engineers: more tire.
I'm no financial analyst, but I do know cars. If you were hoping Tesla would fail on account of the Model 3 I've got bad news: This thing is magnificent, a little rainbow-farting space ship, so obviously representative of the next step in the history of autos. I know there are a lot of Tesla bears, haters and cynics out there. Tesla boss Elon Musk makes it easy. But in the spirit of charity I think we can all agree many brilliant people are putzes.
The Model 3 is more than futuristic. It's optimistic. This is what ordinary cars should be, which is to say, better than they are.
Sure, Tesla has issues. I say this as a veteran of many plant tours: The factory in Fremont is a dimly lit, vertically integrated madhouse. The place is the Kobe beef of lean production, with subassemblies and panels stacked to the rafters. About 30 percent of the Model 3's robotic assemblers are hanging from above, to increase what one engineer called "manufacturing density." Jeez. Keep your arms and legs inside the ride at all times.
But the car is a star. Doubters will have to bring it. Show me another car with an all-glass roof and five-star rollover crash rating. Point out another $80,000 sedan that out-clouds a Rolls-Royce, out-punches a Porsche Boxster and gets an electric equivalent of 116 mpg. You can't, unless you're building something in your garage we don't know about.
So now you are sitting in a tester with all the trimmings, including the ermine-white leather-like upholstery ($1,500) that is apparently in limited supply. The Model 3's dash incorporates a blade-like vent across its width, sandwiched between layers of stitched upholstery and laminated wood. Occupants can move focused airflow up, down and around, using the graphical compass available on the 15-inch high-resolution touch screen. When was the last time a car blew your mind with its climate vents?
Alas, the Model 3's minimalist interior is rudely interrupted by the aforementioned touch screen, a big tablet suspended on a pylon in the middle of the dash. This is the broken flower pot on Mona Lisa's head. Also, the Model 3's A pillars are too thick, blocking the very best views of my next overcooked hairpin.
The center tablet hosts the car's navigation, audio, connectivity and Autopilot avionics, including graphical readouts from complex sensor array. Autopilot functions like distance-keeping are accessed with the unmarked compass selectors in the steering wheel. But I am having way too much fun to use Autopilot.
Build quality: Beta-phase Model 3s had pretty awful panel-gap tolerances -- even the show car at the 2017 Los Angeles Auto Show. Why? The stampings of the deep-draft aluminum body panels were "moving" after they were stamped, explained a production engineer. That's not unusual. Such tool-fettling occurs with almost any aluminum-paneled car project; the difference is, Tesla made all these adjustments under the blazing lights of investors and speculators.
But the cars I've driven are very straight, with uniform panel gaps. The wind noise around the windows that some early testers had noted was nowhere to be heard. Looks like the robots got the memo.
The Model 3 also debuts Tesla's more powerful battery packs, produced in its vast battery-making automaton outside of Reno, Nev., known as the Gigafactory. Inside these packs, the new 2170 cells are roughly 50% larger by volume than Tesla's earlier cells and more energy rich. Mr. Musk has called the new cell "the highest energy density cell in the world."
Tesla doesn't provide battery capacity figures but the Model 3 Performance pack is estimated to be worth about 75 kWh, good for an EPA-estimated 310 miles of range.
The battery pack sort of resembles a watch battery: wafer thin, with minimal intrusion into interior cabin space above. Lower floor, lower roof. The Model 3 also sports a minimal front overhang, low hood, cab-rearward proportions and a luxurious axle-to-dash ratio. Like the Model S, the Model 3 provides a trunk and a generous frunk.
Exit, stage right, still humming.
---
2018 MODEL 3 PERFORMANCE
Base Price: $64,000
Price, as Tested: $78,000
Powertrain: three-phase, four-pole induction motor (front), permanent magnet motor (rear) and all-wheel drive; drive inverter with regenerative braking; 75 kWh (est.) lithium battery and onboard charger.
EPA Range: 310 miles
Recharge Time: 170 miles of range per 30 minutes (supercharger)
0-60 mph: 3.5 seconds
Top Speed: 155 mph
Curb Weight: 4,072 pounds
EPA Fuel Economy: 116 MPG-e
Cargo Capacity: 15 cubic feet
Credit: By Dan Neil
Subject: Aluminum; Automobile industry; Upholstery; Product design; Engineers; Interactive computer systems
Location: Silicon Valley-California Los Angeles California
People: Musk, Elon
Company / organization: Name: Environmental Protection Agency--EPA; NAICS: 924110
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: D.10
Publication year: 2018
Publication date: Jul 21, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2072631652
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2072631652?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-21
Database: The Wall Street Journal
Tesla Asks Suppliers for Cash Back to Help Turn a Profit; Electric-car company, in memo, asks supplier to return a meaningful portion of money spent since 2016
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 July 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. has asked some suppliers to refund a portion of what the electric-car company has spent previously, an appeal that reflects the auto maker's urgency to sustain operations during a critical production period.
The Silicon Valley electric-car company said it is asking its suppliers for cash back to help it become profitable, according to a memo reviewed by The Wall Street Journal that was sent to a supplier last week. Tesla requested the supplier return what it calls a meaningful amount of money of its payments since 2016, according to the memo.
The auto maker's memo, sent by a global supply manager, described the request as essential to Tesla's continued operation and characterized it as an investment in the car company to continue the long-term growth between both players.
While Tesla said in the memo that all suppliers were being asked to help it become profitable, it is unclear how many were asked for a discount on contracted spending amounts retroactively. Some suppliers contacted about the request said they were unaware of such a demand.
Tesla declined to comment on the specific memo. But it confirmed it is seeking price reductions from suppliers for projects, some of which date back to 2016, and some of which final acceptance many not yet have occurred. The company called such requests a standard part of procurement negotiations to improve its competitive advantage, especially as it ramps up Model 3 production.
The surprising requests raise further questions about Tesla's cash position, which has dwindled after it struggled to boost production of its first car designed for mainstream buyers, the Model 3. After months of delays, Tesla last quarter reached its longstanding goal of making 5,000 Model 3s in a single week
, which, if sustained, will help it generate cash.
Auto makers and suppliers have complicated relationships, each fighting for the best deal under immense pricing pressure. Supply-chain consultants say sometimes auto makers will demand a reduction in price for a current contract going forward or use leverage of awarding a new deal to get upfront savings on a contract. But they say it is unusual for an auto maker to ask for a refund for past work.
Dennis Virag, a manufacturing consultant who has worked in the automotive industry for 40 years, said a solicitation like Tesla's could put suppliers in financial peril and jeopardize its future supply of car parts.
"It's simply ludicrous and it just shows that Tesla is desperate right now," he said. "They're worried about their profitability but they don't care about their suppliers' profitability."
Tesla has sought to balance its desire for rapid growth with paying for the expensive launch of new vehicles and building out infrastructure to compete against much larger auto makers.
Chief Executive Elon Musk has said he wants to avoid raising additional cash, promising the company can become cash-flow positive with the continued Model 3 build rate and turn a profit in the second half of the year. Many analysts expect Tesla eventually will need to raise more money.
Tesla has been burning cash
at a rate of about $1 billion a quarter, and finished the first quarter with $2.7 billion in cash on hand. Tesla pledged to pare back planned capital expenditures this year to less than $3 billion from $3.4 billion last year. Its loss attributable to common shareholders in the first quarter was $710 million, the fifth consecutive quarter of record losses.
Tesla will need to pay down
a $230 million convertible bond this November if its stock doesn't reach a conversion price of $560.64, and a $920 million convertible note next March if the stock doesn't reach $359.87. Shares closed Friday at $313.58, and are down about 4.5% over the past 12 months.
As part of Tesla's bid to become profitable, Mr. Musk cut Tesla's workforce by 9% in June
and promised to slow other spending as well. He's become focused intently on becoming cash-flow positive, a person familiar with his thinking said.
Last month, he told employees in an email: "What drives us is our mission to accelerate the world's transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable. That is a valid and fair criticism of Tesla's history to date."
As a younger company, Tesla indicated it had trouble getting the attention of some of the most important suppliers. Mr. Musk has complained in the past that he wasn't getting parts makers' best teams, but he has said that changed with the Model 3.
Tesla has made changes with its suppliers in the past to help preserve its cash position.
In August, Mr. Musk told analysts Tesla was able to negotiate longer payment terms to about 60 days for Model 3 parts, in what he described as "the nirvana" that would allow the auto maker to make the car and get paid for it before the bill is due to suppliers.
"Obviously, that's like the promised land right there," he said.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Credit: By Tim Higgins
Subject: Automobile industry; Suppliers
Location: Silicon Valley-California
People: Musk, Elon
Company / organization: Name: Wall Street Journal; NAICS: 511110; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jul 22, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2073132928
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2073132928?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-22
Database: The Wall Street Journal
Tesla Asks Suppliers for Cash Back to Help Turn a Profit; Electric-car company, in memo, asks supplier to return a meaningful portion of money spent since 2016
Author: Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 July 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. has asked some suppliers to refund a portion of what the electric-car company has spent previously, an appeal that reflects the auto maker's urgency to sustain operations during a critical production period.
The Silicon Valley electric-car company said it is asking its suppliers for cash back to help it become profitable, according to a memo reviewed by The Wall Street Journal that was sent to a supplier last week. Tesla requested the supplier return what it calls a meaningful amount of money of its payments since 2016, according to the memo.
The auto maker's memo, sent by a global supply manager, described the request as essential to Tesla's continued operation and characterized it as an investment in the car company to continue the long-term growth between both players.
While Tesla said in the memo that all suppliers were being asked to help it become profitable, it is unclear how many were asked for a discount on contracted spending amounts retroactively. Some suppliers contacted about the request said they were unaware of such a demand.
Tesla declined to comment on the specific memo. But it confirmed it is seeking price reductions from suppliers for projects, some of which date back to 2016, and some of which haven't been completed. The company called such requests a standard part of procurement negotiations to improve its competitive advantage, especially as it ramps up Model 3 production.
The surprising requests raise further questions about Tesla's cash position, which has dwindled after it struggled to boost production of its first car designed for mainstream buyers, the Model 3. After months of delays, Tesla last quarter reached its longstanding goal of making 5,000 Model 3s in a single week
, which, if sustained, will help it generate cash.
Auto makers and suppliers have complicated relationships, each fighting for the best deal under immense pricing pressure. Supply-chain consultants say sometimes auto makers will demand a reduction in price for a current contract going forward or use leverage of awarding a new deal to get upfront savings on a contract. But they say it is unusual for an auto maker to ask for a refund for past work.
Dennis Virag, a manufacturing consultant who has worked in the automotive industry for 40 years, said a solicitation like Tesla's could put suppliers in financial peril and jeopardize its future supply of car parts.
"It's simply ludicrous and it just shows that Tesla is desperate right now," he said. "They're worried about their profitability but they don't care about their suppliers' profitability."
Tesla has sought to balance its desire for rapid growth with paying for the expensive launch of new vehicles and building out infrastructure to compete against much larger auto makers.
Chief Executive Elon Musk has said he wants to avoid raising additional cash, promising the company can become cash-flow positive with the continued Model 3 build rate and turn a profit in the second half of the year. Many analysts expect Tesla eventually will need to raise more money.
Tesla has been burning cash
at a rate of about $1 billion a quarter, and finished the first quarter with $2.7 billion in cash on hand. Tesla pledged to pare back planned capital expenditures this year to less than $3 billion from $3.4 billion last year. Its loss attributable to common shareholders in the first quarter was $710 million, the fifth consecutive quarter of record losses.
Tesla will need to pay down
a $230 million convertible bond this November if its stock doesn't reach a conversion price of $560.64, and a $920 million convertible note next March if the stock doesn't reach $359.87. Shares closed Friday at $313.58, and are down about 4.5% over the past 12 months.
As part of Tesla's bid to become profitable, Mr. Musk cut Tesla's workforce by 9% in June
and promised to slow other spending as well. He's become focused intently on becoming cash-flow positive, a person familiar with his thinking said.
Last month, he told employees in an email: "What drives us is our mission to accelerate the world's transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable. That is a valid and fair criticism of Tesla's history to date."
As a younger company, Tesla indicated it had trouble getting the attention of some of the most important suppliers. Mr. Musk has complained in the past that he wasn't getting parts makers' best teams, but he has said that changed with the Model 3.
Tesla has made changes with its suppliers in the past to help preserve its cash position.
In August, Mr. Musk told analysts Tesla was able to negotiate longer payment terms to about 60 days for Model 3 parts, in what he described as "the nirvana" that would allow the auto maker to make the car and get paid for it before the bill is due to suppliers.
"Obviously, that's like the promised land right there," he said.
Write to Tim Higgins at Tim.Higgins@WSJ.com
Related
* Heard on the Street: Tesla Wants Its Money Back
* Tesla Reaches Production Goal for Making 5,000 Model 3s
* Tesla Continues to Burn Through Cash
* Tesla's Fundraising Options Get Thornier
Credit: By Tim Higgins
Subject: Competitive advantage; Automobile industry; Corporate profits; Suppliers; Capital expenditures; Profitability
Location: Silicon Valley-California
People: Musk, Elon
Company / organization: Name: Wall Street Journal; NAICS: 511110; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jul 23, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2073154091
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2073154091?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-23
Database: The Wall Street Journal
Tesla Asks Suppliers for Cash Back --- Request suggests auto maker's urgency during a crucial production period
Author: Higgins, Tim
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]23 July 2018: B.1.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc. has asked some suppliers to refund a portion of what the electric-car company has spent previously, an appeal that reflects the auto maker's urgency to sustain operations during a critical production period.
The Silicon Valley electric-car company said it is asking its suppliers for cash back to help it become profitable, according to a memo reviewed by The Wall Street Journal that was sent to a supplier last week. Tesla requested the supplier return what it calls a meaningful amount of money of its payments since 2016, according to the memo.
The auto maker's memo, sent by a global supply manager, described the request as essential to Tesla's continued operation and characterized it as an investment in the car company to continue the long-term growth between both players.
While Tesla said in the memo that all suppliers were being asked to help it become profitable, it is unclear how many were asked for a discount on contracted spending amounts retroactively. Some suppliers contacted about the request said they were unaware of such a demand.
Tesla declined to comment on the specific memo. But it confirmed it is seeking price reductions from suppliers for projects, some of which date back to 2016, and some of which havent been completed. The company called such requests a standard part of procurement negotiations to improve its competitive advantage, especially as it ramps up Model 3 production.
The surprising requests raise further questions about Tesla's cash position, which has dwindled after it struggled to boost production of its first car designed for mainstream buyers, the Model 3. After months of delays, Tesla last quarter reached its longstanding goal of making 5,000 Model 3s in a single week, which, if sustained, will help it generate cash.
Auto makers and suppliers have complicated relationships, each fighting for the best deal under immense pricing pressure. Supply-chain consultants say sometimes auto makers will demand a reduction in price for a current contract going forward or use leverage of awarding a new deal to get upfront savings on a contract. But they say it is unusual for an auto maker to ask for a refund for past work.
Dennis Virag, a manufacturing consultant who has worked in the automotive industry for 40 years, said a solicitation like Tesla's could put suppliers in financial peril and jeopardize its future supply of car parts.
"It's simply ludicrous and it just shows that Tesla is desperate right now," he said. "They're worried about their profitability but they don't care about their suppliers' profitability."
Tesla has sought to balance its desire for rapid growth with paying for the expensive launch of new vehicles and building out infrastructure to compete against much larger auto makers.
Chief Executive Elon Musk has said he wants to avoid raising additional cash, promising the company can become cash-flow positive with the continued Model 3 build rate and turn a profit in the second half of the year. Many analysts expect Tesla eventually will need to raise more money.
Tesla has been burning cash at a rate of about $1 billion a quarter, and finished the first quarter with $2.7 billion in cash on hand. Tesla pledged to pare back planned capital expenditures this year to less than $3 billion from $3.4 billion last year. Its loss attributable to common shareholders in the first quarter was $710 million, the fifth consecutive quarter of record losses.
Tesla will need to pay down a $230 million convertible bond this November if its stock doesn't reach a conversion price of $560.64, and a $920 million convertible note next March if the stock doesn't reach $359.87. Shares closed Friday at $313.58, and are down about 4.5% over the past 12 months.
As part of Tesla's bid to become profitable, Mr. Musk cut Tesla's workforce by 9% in June and promised to slow other spending as well. He's become focused intently on becoming cash-flow positive, a person familiar with his thinking said.
Last month, he told employees in an email: "What drives us is our mission to accelerate the world's transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable. That is a valid and fair criticism of Tesla's history to date."
As a younger company, Tesla indicated it had trouble getting the attention of some of the most important suppliers. Mr. Musk has complained in the past that he wasn't getting parts makers' best teams, but he has said that changed with the Model 3.
Tesla has made changes with its suppliers in the past to help preserve its cash position.
In August, Mr. Musk told analysts Tesla was able to negotiate longer payment terms to about 60 days for Model 3 parts, in what he described as "the nirvana" that would allow the auto maker to make the car and get paid for it before the bill is due to suppliers.
"Obviously, that's like the promised land right there," he said.
Credit: By Tim Higgins
Subject: Competitive advantage; Automobile industry; Suppliers; Capital expenditures; Profitability
Location: Silicon Valley-California
People: Musk, Elon
Company / organization: Name: Wall Street Journal; NAICS: 511110; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2018
Publication date: Jul 23, 2018
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2073220534
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2073220534?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-23
Database: The Wall Street Journal
Tesla Wants Its Money Back; Shares fell after The Wall Street Journal reported the firm has asked some suppliers to refund some of what it has paid them
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 July 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Elon Musk is asking for donations to save Tesla Inc.
The Wall Street Journal reported Sunday
that Tesla has asked some suppliers to refund a portion of what Tesla has paid them. One supply manager quoted the auto maker as saying the refunds are "essential to Tesla's continued operation." The person said Tesla asked for a meaningful amount of the money it has received from Tesla since 2016, the year that Tesla first unveiled its Model 3 sedan.
Tesla shareholders, usually not the type to worry, sent the shares down 4% in early trading Monday.
That selloff understates the concern that investors should have. Even if suppliers agreed to pay back Tesla, a dubious assumption, most don't have any extra cash sitting around. The automotive supply chain is a ferociously competitive, low-margin industry. Suppliers have vendors of their own, and any cash they give back to Tesla would be modest and more of a goodwill gesture than something that would meaningfully help the car maker.
Suppliers, who once were eager to work for Tesla, may not be in a mood to help. Tesla has been slowing its payments to these companies over the past two years in an apparent effort to save cash. Accounts payable totaled
$2.6 billion at the end of the first quarter, compared with $2 billion a year earlier. Net working capital, a handy way to measure liquidity, fell to negative $2.27 billion in March; a year ago that figure was positive $780 million. Tesla could be asking for refunds of amounts it owes but hasn't paid yet.
Tesla's maneuver should raise further concern among investors that the company hasn't simply raised fresh capital to patch its funding gaps. While Mr. Musk has repeatedly said Tesla doesn't need to raise capital, Moody's Investors Service warned that the company
needed to raise $2 billion in the "near term" back in March when it downgraded Tesla's credit rating. Issuing fresh debt seems unlikely, since the bonds Tesla issued last August are quoted at about 90 cents on the dollar.
Meanwhile, the stock still trades near $300 a share, above where it last issued stock in the winter of 2017. That Tesla hasn't taken advantage of its high stock price, even with such glaring cash needs, looks more curious with each passing day.
And with the stock still trading at about 130 times FactSet's projection of 2019 earnings, there is not much breathing room if Tesla's suppliers don't grant Mr. Musk his wish.
Write to Charley Grant at charles.grant@wsj.com
Credit: By Charley Grant
Subject: Automobile industry; Stock prices; Investments; Suppliers
People: Musk, Elon
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Wall Street Journal; NAICS: 511110; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jul 23, 2018
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2073418429
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2073418429?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-24
Database: The Wall Street Journal
Tesla Asks for Its Money Back
Author: Grant, Charley
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 July 2018: B.12.
ProQuest document link
Abstract: None available.
Full text: [Financial Analysis and Commentary]
Elon Musk is asking for donations to save Tesla Inc.
The Wall Street Journal reported Sunday that Tesla asked some suppliers to refund a portion of what Tesla paid them. One supply manager quoted the auto maker as saying the refunds are "essential to Tesla's continued operation." The person said Tesla asked for a meaningful amount of the money it has received from Tesla since 2016, the year Tesla unveiled its Model 3 sedan.
Tesla shareholders, usually not the type to worry, sent the stock down more than 3% Monday.
That selloff understates the concern that investors should have. Even if suppliers agreed to pay back Tesla, a dubious assumption, most don't have any extra cash sitting around. The automotive supply chain is a ferociously competitive, low-margin industry. Suppliers have vendors of their own, and any cash they give back to Tesla would be modest and more of a goodwill gesture than something that would meaningfully help the car maker.
Suppliers, who once were eager to work for Tesla, may not be in a mood to help. Tesla has been slowing its payments to these companies over the past two years in an apparent effort to save cash. Accounts payable totaled $2.6 billion at the end of the first quarter, compared with $2 billion a year earlier. Net working capital, a handy way to measure liquidity, fell to minus-$2.27 billion in March; a year ago, that figure was $780 million. Tesla could be asking for refunds of sums it owes but hasn't paid yet.
Tesla's maneuver should raise further concern among investors that the company hasn't simply raised fresh capital to patch its funding gaps. While Mr. Musk has repeatedly said Tesla doesn't need to raise capital, Moody's Investors Service warned that it needed to raise $2 billion in the "near term" back in March when it downgraded Tesla's credit rating. Issuing fresh debt seems unlikely, since the bonds Tesla issued last August are quoted at about 90 cents on the dollar.
Meanwhile, the stock still trades near $300 a share, above where Tesla last issued stock in the winter of 2017. That Tesla hasn't taken advantage of its high stock price, even with such glaring cash needs, looks more curious with each passing day.
And with the stock trading at about 130 times FactSet's projection of 2019 earnings, there isn't much breathing room if Tesla's suppliers don't grant Mr. Musk his wish.
Credit: By Charley Grant
Subject: Automobile industry; Stock prices; Investments; Suppliers
People: Musk, Elon
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Wall Street Journal; NAICS: 511110; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.12
Publication year: 2018
Publication date: Jul 24, 2018
column: Heard on the Street
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2073956103
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2073956103?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-24
Database: The Wall Street Journal
Tesla Explores Building Major Factory in Europe; Germany and the Netherlands have initiated talks with the car maker as it pursues international expansion
Author: Boston, William; Higgins, Tim
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 July 2018: n/a.
ProQuest document link
Abstract: None available.
Full text: Tesla Inc.'s international expansion is gaining momentum, with authorities in Germany and the Netherlands initiating talks with the company to build its first major European factory.
The Silicon Valley car maker, which this month announced plans to build its first overseas plant in China
, has had preliminary discussions with two German states vying to host a so-called Gigafactory in Europe to build electric cars and their batteries under one roof, officials involved in the talks said.
The talks are still in their early stages, and might not yield an agreement, the officials said. Tesla has also discussed an option to build the plant in the Netherlands, said a Dutch government official, who declined to say if that option is still being pursued. Tesla's European headquarters is in the Netherlands, where it also has a facility that works on vehicles built in California to prepare them for local markets.
Tesla declined to comment.
Chief Executive Elon Musk last month suggested Tesla would likely announce a factory location in Europe by year's end, and later said in a Twitter post last month that Germany was a "leading choice." He said it would make sense to build the plant near Belgium and Luxembourg along the German-French border--which would position it near Tesla's most important markets in Europe.
Tesla does most of its vehicle assembly at its factory in Fremont, Calif., and makes batteries at its factory outside of Reno, Nev. Mr. Musk wants to accelerate global expansion by adding manufacturing capacity in China and Europe--the world's two biggest regions for electric-car sales.
The plant Tesla recently agreed to build in China will have the capacity to build 500,000 vehicles a year, a large factory by auto-industry standards. That has European officials hoping Tesla has similar plans for its factory there.
Discussions about a European Gigafactory come as Tesla boosts production in the face of a surge in output of new plug-in electric models from auto makers including General Motors Co., Ford Motor Co., Volkswagen AG, BMW AG, Renault-Nissan, and Jaguar.
Tesla is accelerating production of its Model 3 compact sedan and is preparing a compact sport-utility vehicle, to be called the Model Y. Those two vehicles could help transform Tesla from a niche luxury brand into a mass-market car company.
Officials in the states of Rhineland Palatinate and Saarland, close to France in southwestern Germany, had been lobbying Tesla for some time. After Mr. Musk's tweet last month, they stepped up their outreach with phone calls and written invitations to Mr. Musk.
"We have done everything possible to assure that Rhineland Palatinate is in the competition for the plant," said Ralph Schleimer, a state official in Rhineland Palatinate, who is involved in the effort. He said the state has presented its case to Tesla, but that detailed negotiations haven't begun.
Tesla acquired a local robotics company, now called Tesla Grohmann Automation, last year in Rhineland Palatinate. Grohmann builds equipment for Tesla's Nevada factory.
Saarland officials approached Tesla in March, then wrote to it again last month, said Anke Rehlinger, the state's economics minister. In early July, Tesla agreed to meet, she said.
"They are looking at us to see if we fit their needs," Ms. Rehlinger said, adding that formal negotiations haven't begun.
Dutch officials also have been lobbying Tesla for the plant.
"We've had contact with Tesla," said Michael Bakhuizen, a spokesman for the Dutch economics minister. "But we do not talk about confidential negotiations with potential investors."
Write to William Boston at william.boston@wsj.com and Tim Higgins at Tim.Higgins@WSJ.com
Credit: William Boston, Tim Higgins
Subject: Automobile industry; Vehicles
Location: Silicon Valley-California Luxembourg Netherlands Germany China California Nevada Belgium France Europe
People: Musk, Elon
Company / organization: Name: Renault SA; NAICS: 336111; Name: Twitter Inc; NAICS: 519130; Name: BMW AG; NAICS: 336111, 336991, 423110; Name: Ford Motor Co; NAICS: 333924, 336111, 336390; Name: Volkswagen AG; NAICS: 336111, 336390; Name: General Motors Corp; NAICS: 333415, 336111, 336390; Name: Tesla Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2018
Publication date: Jul 30, 2018
Section: Tech
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 2079841589
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/2079841589?accountid=7117
Copyright: (c) 2018 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2018-07-31
Database: The Wall Street Journal
